Sound financial position enabling Oman to overcome crisis: Macki

Mrudu Naik
Wednesday, April 29, 2009 1:46:39 AM Oman Time

MUSCAT — “The Sultanate is safely overcoming the repercussion of the global financial and economical crisis because of its sound financial position,” said Ahmed bin Abdulnabi Macki, minister of national economy and deputy chairman of the Financial Affairs and Energy Resources Council.

He was delivering the inaugural address at the 32nd annual meetings of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) that opened at Shangri-La’s Barr Al Jissah Resort & Spa yesterday.

The theme of the event is: Financing Development amidst the Global Crisis: DFI Responses, Challenges and Opportunities.

Good fiscal policy

The meetings will examine the role of DFIs in achieving sustainable economic development.

Oman Development Bank (ODB) is hosting this conference on behalf of the Sultanate.

DFIs from more than 36 countries are participating in the ADFIAP annual meetings.

“This was possible due to the fiscal policy followed during the period of prosperity by diverting part of the oil surplus to strengthen the oil reserves and reduce the size of public debt,” the minister added.

Macki also pointed out the report of the Economic Intelligence Unit, which classified the Sultanate as the first country in the Arab region to meet the challenges of the global financial crisis.

He said that to address the financial repercussions of the global economic crisis and to take the edge off the economical financial crisis, the Sultanate has adopted a package of policies and mechanisms.

“The most important of which was to continue with the expansionary fiscal policy to stimulate growth and increase public spending in this year’s budget at a rate of 11 per cent compared to the 2008 budget,” he said.

“The government continues to implement the major infrastructure and other projects as planned and by doing so it is expected to increase spending on the development programme of this year’s budgets by 10 per cent compared to last year’s budget.

“In addition, this package of policies and mechanisms was included to support the financial sector to provide lending facilities to the banks announcing $2 billion in case such financial facilities are required by the banks, and provide similar funding by Central Bank of Oman (CBO) as well as through the exchange of reserve facilities and market stabilisation funds with the capital of $391 million to support the Muscat Securities Market,” Macki said.

He pointed out that Omani banks had remained sound because they were continually being supervised by CBO and also because they had limited exposure to the troubled financial institutions in the world.

The minister also said the decision to host this conference in the Sultanate exemplified the government’s keenness to support and encourage development funding.

Greater strides

“Indeed, the Sultanate has taken greater strides in development funding since 1976, and the establishment of ODB is the best example for the government’s commitments to sustainable development,” Macki said.

Sheikh Al Fadhil bin Mohammed bin Ahmed Al Harthy, undersecretary in the Ministry of National Economy for Planning and Development Affairs and chairman of ODB, said:

“ODB hosting this meeting is in line with His Majesty’s belief in the comprehensive approach to sustainable development and on the recognition of the importance of the role played and the effectiveness of funding in support of development, including those carried out by the ADFIAP’s efforts to promote and activate the role of development finance institutions and the development of method of work in the region in specific and the world in general.” In his address, Fuimaona Falefa Lima, chairman, ADFIAP, said: “DFIs will seek answers to the question of how best we can effectively respond to the global economic crisis, meet the challenges it poses, and exploit the opportunities it may present. There is a need to establish national economic forums to discuss the impact of economic crisis.

“These forums can recommend stimulus packages for the economy to boost development and public confidence,” he said. Lima pointed out that while the global crisis has yet to play out in full, it is encouraging to see that economies are endeavouring to meet the challenges in a concerted effort.

Presentations

“While our economic structures may differ, we certainly enjoy more similarities as development financing institutions or DFIs.

“As most DFIs are state-owned enterprises, we are policy instruments of our respective governments of our respective governments with mandates to seed the development of vital economic and social sectors. Our role in facilitating development, or more precisely reseeding and restarting development has never been more urgent and critical than during the current economic crisis,” Lima said.

Comprehensive presentations on various topics followed inaugural session.

Speaking on ‘Communicating in the Now Media’, Sheila Samonte Pesayoc, president and COO of Writers Edge Inc, emphasised: “Dedication to implementing effective and professional Public Relations play a key role in building confidence among public on sustainable social and economic development.”

In a presentation on the ‘Value of CSR’, Maria Fatima Reyes, Pogramme Director of ADFIAP said:

“DFIs must strive to develop and implement sustainable development programmes amidst turbulent times.”

Carlo Federico Cattani, senior adviser on development and trade finance from Geneva speaking on SME Banking said: “Today’s world offers enormous scope for banks and financial institutions to explore the scope of further promoting and expanding SME banking. Promoting effective SME Banking will continue to help financial institutions and economies to achieve sustainable development.”

In a presentation on the role of Exim banks in sustainable development, Diana Smallridge, president of IFCL pointed out: “Exim (export and import) banks can efficiently take the lead role in promoting trade finance and face the challenges of economic crisis, if any.”