Event

On Sunday 25 October the seventh Shura Council elections were held in Oman. As political parties are banned in Oman, voters chose between 590 candidates for 85 seats in the Shura Council. The Shura Council is elected every 4 years and is the lower house of the bicameral Council of Oman. It has no legislative or veto powers but can provide the government with advice on domestic and economic issues.

Impact on country risk

Though Sultan Qaboos bin Said al Said granted additional powers to the Shura council following Arab Spring-inspired protests in 2011, ultimate authority rests overwhelmingly with the ruler. The unclear succession of the childless 74-year-old Sultan is therefore of much more importance for the political stability of the country. Furthermore, protracted low oil prices constitute a possible risk. The low oil prices are straining the government finances that depend on oil revenues for 88%. In 2015 and 2016 a fiscal deficit of respectively 17.7% and 20% of GDP is expected, while Oman has less than 5 years before its fiscal buffers run out. Hence, government initiatives to halt the 2011 protests, such as subsidies and the expansion of public sector employment, will be difficult to maintain in the medium term. Moreover, prolonged depressed oil prices also have an impact on the Omani economy as government spending is critical for economic growth.

Analyst: Jolyn Debuysscher, j.debuysscher@credendogroup.com