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Iranian President Hassan Rouhani, left, is welcomed by Omani Sultan Qaboos at the start of his visit, Muscat, Oman, Feb. 15, 2017 (Iranian Presidency Office photo via AP).

In an Era of Low Oil Prices, Oman Faces a Post-2011 Political Reckoning

Monday, June 5, 2017

Since the collapse of world oil prices in 2014, the wealthy Arab monarchies in the Persian Gulf have all faced difficult times, but especially Oman. Last month, things got even worse when Standard & Poor’s downgraded Oman’s credit rating to junk status over concerns with the country’s budget and revenue prospects as oil prices stay low.

After recording average budgetary surpluses of 9.7 percent of GDP in the 2000s, Oman has seen fiscal deficits of 1.1 percent of GDP in 2014, 15.1 percent in 2015 and 20.6 percent in 2016. Unless oil prices increase significantly, the country will face the unpleasant prospect of limited borrowing ability, slowing rates of economic growth, rising levels of unemployment and increased domestic unrest not seen since 2011, when the uprisings across the Arab world led to the first sustained protests in Oman in decades. ...

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