Geert Bekaert and Campbell R. Harvey's
Chronology of Economic, Political and Financial Events in Emerging Markets
Major Political and Economic Events
The introduction of the Insider Trading Laws.a4
Private sector projects with a majority Omani shareholding and aimed at industrial production for exportation, industrial production using indigenous resources, or tourism would be provided with government financial aid in the form of loans at subsidized interest rates.a3(first entry)
A stand-alone global index for Oman was added to the S&P Emerging Market Indices, which has a base date of Dec. 31, 1998. At launch, the index was comprised of 34 stocks and had a market capitalization of $3.1 billion. It joined the S&P/IFCG Composite, EMEA, and Middle East & Africa indices on Nov.1.
The first prosecution under the Insider Trading Laws.a4
Securities laws were modified to strengthen investor protection. The government also proposed measures which included a National Investment Fund Company and increased market transparency.
The government announced it would invest US$26 million in a single Omani Growth Fund.
An increase of oil OPEC oil price from US$15.38 in the second quarter of 1999 to US$26.37 in the same period of 2000 increased Oman's oil revenue by 50%. The Muscat bourse recorded its largest-ever transaction as the Sultan's Office and state-owned pension funds took large stakes in Commercial Bank of Oman. The Muscat bourse shifted the beginning of its weekend from Thursday to Friday. The Commercial Bank of Oman and BankMuscat finalized their merger to create the country's largest bank.
Elections for the consultative Shura council were held, a step towards democracy. The government decided to increase expenditures for the creation of jobs for nationals.
Oman joined the World Trade Organization after more than four years of preparatory negotiations.
The government-controlled Economic Coordination Council pumped 50 million rials in the market. The government also released its sixth five-year economic plan, targeting an average growth rate of 3% in GDP for the next 20 years.
Oman's oil revenues increased by 11.4% in the first two months. The government reduced taxes on foreign-owned businesses to 30% from 50%at the beginning of 2001. It also declared a five-year tax holiday for companies in certain industries.
Oman became a Liquefied National Gas (LNG) exporter. The export revenues contributed to about 10% of the current GDP. The government ran a budget surplus through the first five months.
During the third quarter, the government planed to private telecommunications and the airport in Salalah. International firms would be allowed to have a 100% stake in businesses in a number of sectors, including banking and financial services.
Foreign direct investment was encouraged and the six-month slide in the market finally halted.
The global slowdown due to the September 11 attacks weakened demand for oil. Oman cooperated with OPEC's pricing and production policies to assure the stability of oil markets.
011213 The cost of entry visas is to be reduced as of the start of next year, as part of efforts to promote tourism in Oman and make visitor entry easier and cheaper. As of 5 January 2002, business visas will cost 7 rials (US$18), tourist visas 5 rials (US$13) and visas for residents of Gulf states 3 rials (US$8), according to a joint statement issued yesterday by the Ministry of Commerce and the police. Border and customs facilities are also set to be expanded and improved to ease congestion, which is especially slow when crossing between the UAE and Oman. The Sultanate is keen to develop and expand its tourism industry as part of economic diversification policy aimed at easing dependence on oil revenue. Tourism projects are aimed also at job creation for Omani nationals. In September 2000, the government announced the launch of a US$150m Tourist Village project in the coastal town of Mirbat.
020108 Oman has announced that it will revive its plans to privatise its telecommunications operator after a two-year delay. Economy Minister Ahmed bin Abdul-Nabi Mekki told a news conference in Muscat that a global slowdown in 2001 had hindered plans to sell state-run Oman Telecommunications Company
020313 Sultan Qaboos bin Saeed has passed the telecommunications bill privatising Oman's telecoms sector and opening it up to foreign investment, the Oman News Agency reports. Communications and Telecommunications Minister Suleyman al-Muamari called on foreign telecoms operators to invest in the sector as strategic partners. The new legislation allows for the privatisation of state-owned operator the Oman Telecommunications Co. (Omantel), the sole provider of telecoms services in the sultanate. Omantel was formed in 1999 when the government capitalised the former General Telecommunications Organisation, in a move aimed at preparing the sector for privatisation. Since then, however, attempts to privatise Omantel have been thwarted due to lacklustre international interest. Under the new law, the Omani government will retain 51% of Omantel, while 40% is being reserved for a foreign partner. Omani pension funds and banks will hold the remaining 9%, some of which will eventually be offered to the public, the news agency said
020326 A double taxation agreement was signed yesterday with China, in a move aimed at boosting trade and investment opportunities between the two countries. The agreement stipulates equal taxation for Chinese and Omani companies, with special treatment also on profits and interests, whilst airlines and shipping companies will be taxed at home in a bid to increase air traffic. Omani trade representatives are also due to be appointed to offices in Beijing and Shanghai to help facilitate cooperation between the two countries. The tax agreement is one of three accords finalised yesterday, the others including sale and purchase (PSA) deals intended to increase cooperation in the oil sector. China is the third-largest importer of Omani crude after Japan and South Korea
020415 Trade Minister Maqboul bin Ali bin Sultan signed a free trade agreement with his Iraqi counterpart on 13 April, making Oman the ninth Arab state to have a free trade accord with Iraq. The accord is intended to stimulate Omani exports to Iraq within the boundaries of the UN supervised oil-for-food programme. Iraq is already a dominant trade partner with Oman, based on strong relations between the two countries which were maintained during the Gulf War in 1991. In March, Iraq and Sudan signed a free trade agreement, aimed at strengthening economic and commercial ties between the two countries. All free trade agreements are signed within the context of the sanctions regime in Iraq.
030220 Plans are reported to be underway to amend the foreign capital investment law of 1994 to allow for 100% foreign ownership in banking and insurance sectors this year, with a view to extending this to the telecommunications sector by 2005. Current laws limit foreign ownership to 70%, although 100% ownership has been permitted in projects that are considered to be critical for the development of the economy and which have a minimal capital of US$195m. Additional changes will be made to land and building ownership, which currently only permit freehold of land by Omani nationals as well as some Gulf nationals.
030422 The government is to resume talks with international banks in a bid to raise more than US$2bn to finance major chemical and industrial projects delayed by the US-led invasion of Iraq. The developments come as part of government attempts to diversify the economy from its dependence on oil through expansion of the industrial base. Among specific projects, state-run Oman Methanol Co. has confirmed that it is in negotiations with German bank KSW over a US$350m loan, while parent company Oman Oil Company is seeking US$140m of financing to build a polypropylene plant. Talks are proceeding with the ANZ Investment Bank, Gulf International Bank and the Arab Banking Corp. The deals highlight international investors' reviving confidence in the Gulf region as the war in Iraq concludes and the prospect of multibillion dollar US investment comes into view
030708 The government has formally offered tenders to foreign companies for the design and construction of a free trade zone in the port area of Salahah. In its first phase, the project will see construction of a road linking the free trade zone with the Salahah coastal road, construction of water-flood ditches and the installation of telecommunications facilities, according to details of the plan published in the Khaleej Times. The following phase will see construction of residential, commercial and industrial buildings, which are expected to be leased to foreign investors. The government is offering a range of incentives for companies setting up in the zone, including a 30-year tax break and full foreign ownership.
030917 The IMF's 2003 Article IV Consultation with Oman recommends the strengthening of the fiscal position via the introduction of a number of new taxes, including a personal income tax.
031103 The IMF's 2003 Article IV Consultation with Oman recommends the strengthening of the fiscal position via the introduction of a number of new taxes, including a personal income tax.
031107 Ratings agency Standard and Poor's (S&P) was recorded yesterday (6 November) as affirming its rating for the Omani sovereign. The agency's rating on the sovereign remains at BBB. S&P praised the sovereign for fiscal prudence and a relatively conservative estimate of the oil price into 2004. However, it noted that the economy remains heavily reliant on oil production and that the non-oil sector retains a number of structural weaknesses. Omani politics are stable at present, but the lack of a clear successor means there is no guarantee of a smooth transition of power from Sultan Qaboos
040116 An official from the Finance Ministry has told the Omani daily the Khaleej Times that there will be no increase in tax and duty rates in 2004. According to the official, 'the government is not considering to introduce the controversial income tax or even increase the prices of basic utility bills.' The government's refusal to up the tax burden is said to be a result of its desire to attract foreign investment. At present, no tax is levied on personal income - which is deemed to include wages, dividends, estates and gifts - while income derived from partnerships and businesses with foreign equity participation is subject to corporate income tax, to a maximum rate of 30%. In its 2003 Article IV report on Oman, the International Monetary Fund (IMF) recommended the introduction of personal income tax, among other new taxes
040129 The US Embassy in the Omani capital, Muscat, has issued a warning that Western military interests in the south of the country could be at risk of an imminent terrorist attack. The US and other Western countries maintain a military presence in the sultanate and some even have permission to use Omani military facilities. Oman is used as a point of transit for US military personnel bound for the Gulf area, Iraq and Afghanistan. A number of foreigners have been attacked in Oman recently, but the incidents have not been associated with terrorist threats
040227 According to officials at the Tourism Ministry, foreigners are shortly to gain property rights in the sultanate, the Times of Oman has reported. A formal decree on the matter is expected to be issued next month, in a move that aims to boost foreign investment in the Gulf country. The decision follows the announcement earlier this month that citizens of the Gulf Cooperation Council (GCC) are to be allowed to own property for the purpose of investment or residence in Oman
040510 A royal decree issued by Sultan Qaboos bin Said has set a minor cabinet reshuffle in motion. The decree appoints Khamis bin Mubarak bin Issa al-Alawi as minister of housing, electricity and water and names Sheikh Abdullah bin Samil bin Amer al-Rowas as the new minister of regional municipalities, environment and water resources. Sheikh Suhail bin Mustahail bin Shimas has been appointed to the position of state adviser
Regulations on Foreign Investors

Restrictions: Non-Omanis are limited to holding up to 49% of some companies.

Taxation: Overseas investors are taxed under the same rules as Omani national.a6


No change.a7


New investments are given attractive incentives, subject to government approval, in addition to the tax advantages outlined above, including:
  • grants and interest-free loans;

  • priority in the allocation of government land;

  • priority in government purchases; and

  • government assistance with feasibility studies.

In August 2002, Sultan Qaboos issued a decree to improve the Oman Centre for Investment Promotion and Export Development (Ociped) in order to ensure a more effective investment policy. The body consists of a board of directors, chaired by the Commerce Ministry and includes five representatives of the private sector. Ociped has been asked to focus in particular on agriculture, fisheries, industry, tourism, services and technology investments, with priority to be given to those that make use of natural resources and promote technology transfer

Last updated on 7/18/04 by Jerome Mo, Duke University

nistry and includes five representatives of the private sector. Ociped has been asked to focus in particular on agriculture, fisheries, industry, tourism, services and technology investments, with priority to be given to those that make use of natural resources and promote technology transfer

Last updated on 7/18/04 by Jerome Mo, Duke University