Saturday, March 15, 2008

Ministry of National Economy likely to weigh in soon

Yes, the Ministry of Commerce and Industry, through its puppet the Oman Chamber of Commerce and Industry, continue to fiddle while Oman's economy runs hotter and hotter. Khalil bin Abdullah al Khonji, Chairman of the Oman Chamber of Commerce and Industry (OCCI), met more 'representatives of private companies' and construction companies on how to deal with the inflation problem, this time in construction. See the hard-hitting journalistic excellence of the Times of Oman article .

Meanwhile, Oman has (again) run out of cement. Pretty ridiculous for a country blessed with large quantities of all the required ingredients: i.e. limestone, clay, and natural gas. Its not rocket science. And you'd think a Ministry with the word 'Industry' in it would be quick to claim responsibility for a country in the midst of a construction boom running out of the no. 1 thing you need to build industry with, wouldn't you? Hmm. Don't hold your breath.
Last week at a meeting with the OCCI, businessmen dealing with building materials had called for a collective import of steel and cement and urged the government to simplify the procedures for imports as construction in a number of projects had come to a standstill mainly due to non-availability of cement.

Notice how its made out to be the poor Custom's fault, and not MCI? Clever huh.

So, instead of fixing real problems, The Ministry of C & I continues with its King Canute-like approach to dealing with inflation, urging people to basically just buy cheap things, arm-twisting retailers to provide staples like flour and oil at below market prices, and importing fish from India. I guess it’s all they can do. IE Try as hard as they can to be seen to be 'doing something', with the press helping as much as they can.

Meanwhile, the real power is biding his time. Mr Mackie, Minister in charge of the Ministry of National Economy, is the only one with the authority and intellectual horsepower to actually do something about the problem. My friends say options are still being studied and finalised for presentation to MONE for decisions. So, expect something soon. The ineffectiveness of the MCI & OCCI must be a source of worry, however. Instead of keeping the public content by seeing something being done, and thus buy some time for preparation of some actual policies, it seems it is just emphasizing the perceived helplessness of the Government.

Time is short, Gentlemen. Get moving on those powerpoint slides.

As the clock ticks away, the dollar continues to fall, the demand within the economy raises almost exponentially, and inflation must be well above 15% right now. Although his Majesty’s recent instruction to raise salaries in the public sector, by up to 43% at the lowest grades, bought some time, the actual base salaries are so low that even such a dramatic looking raise doesn’t mean much more rials in the pocket. Most of their income comes from allowances, which aren’t counted in the pay raise.

Mackie infamously declined to increase Public Sector pay a couple of months ago, noting that it would just make the problem worse, and was then over-ruled by HM (or so it seemed, but maybe this overrule was by design to underline the principal role of guardian to the people HM still plays in Oman).

The Dragon looks forward to seeing what the response of MONE will be to what is rapidly becoming a very significant problem. And demonstrably too improtant to leave in the hands of the Chamber of Commerce.

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