Low oil prices halt Oman projects and job promotions
Oman said on Sunday that low oil prices have had a deep impact on the country's economy, with a number of infrastructure projects halted and promotions in public sector jobs frozen, since the oil crisis in 2014.
Minister of Civil Service Sheikh Khalid bin Omar al-Marhoon said the government has stopped granting promotions to public sector staff due to a lower budget projections, which also impacted on other operations.
"Promotions are a government decision and not a ministry decision. The employment crisis is a global issue and there is a good level of recruitment in the military and private sectors," Marhoon said in a statement, according to Omani media.
The minister reiterated that the government sector will continue to hire job seekers, while insinuating that the issue of replacing foreigner employees by Omani nationals in the public sector will be studied urgently.
Oman's lower house, Majlis Al Shura (Consultative Assembly), will host Marhoon on Monday, to elaborate further on his statement.
The sultanate's economy has been struggling since oil prices slumped in 2014, compelling the government to join other neighbouring Gulf countries in tapping international debt markets to plug budget deficits.
Despite dwindling reserves, Oman has been slow to implement financial reforms, amid concerns that the sultanate could follow Bahrain in needing a bailout from wealthier Gulf countries.
Once A-Rated by S&P Global, Oman now risks descending into the abyss of economic uncertainty, if it fails to steady its public finances and stop loading up on external debt.
The Manhattan-based company, which specialise in financial information and analytics, put the country on notice on Friday by cutting the outlook to negative while confirming its debt score at BB, two levels below investment grade. This puts the oil-rich sultanate on the same level with Paraguay and Serbia.
"The negative outlook reflects our expectation that we could lower our ratings on Oman over the next 12 months if we view the government as unable to moderate external debt accumulation related to still-sizable fiscal deficits, which we expect will continue to increase through 2022," S&P said in a report.
Both Fitch Ratings and Moody’s Investors Service, however, have Oman one notch higher than S&P.