Decision affects privileges not within basic rights

“I don’t think the ministry aims to do away with the basic privileges like house rent, medical facilities given to employees,” the economist added.

Official statistics show that Oman has lost $14 billion worth of revenues in 2015 compared to a year earlier due to low oil prices.

Oman had a fiscal deficit of 15 per cent last year and in 2016 the deficit is expected to be 17 per cent as the low oil price eats into export earnings and blows a hole in the country’s budget.

With breaking-even crude oil prices of $75 per barrel for the 2016 budget, Oman will need to dig deep into the reserves to come up with financial discrepancy to wipe out the OMR 3.5b deficit.

The decision mainly aims to halt privileges, which do not come within basic rights associated with the job, which are usually out of framework of normal expenditure, like allowances for entertainment and others which hit the budgets of the institutions.

Recently, the International Monetary Fund (IMF) has already cautioned Oman to make urgent steps to secure the future of its fiscal budget.

It had urged the government to embark on the long-term economic sustainability plans. The IMF had also urged Oman to cut its wages bills on the public sector.

This year, Oman has already shown its commitment to cut costs by reforming the subsidies with hikes in taxation and fuel prices.

IMF has advised working on long-term economical sustainability plan