Towards Sustainable Engagement

Oman Saturday 07/August/2021 19:27 PM
By: Ann Alkindi / Twitter : @AnnAlkindi
Towards Sustainable Engagement
Ann Alkindi

Each development stage has its own needs and requirements according to the surrounding circumstances. Today, Oman is facing the consequences of a pandemic, the repercussions of low oil prices, and the implementation of a fiscal balance programme to handle public debt. These challenges coincide with the commencement of Oman’s Vision 2040 programme and its associated changes. This unprecedented global and national context requires high-quality communication, engagement, and dialogue among economic stakeholders in order to build effective policies. Is there currently an effective dialogue between the public and private sectors?

The circumstances at the end of the 1990s can offer us some clues. At that time, in a similar manner to today, oil prices plunged following the Asian financial crisis, dropping to just above ten dollars a barrel. How did we deal with these circumstances at the time? The Sultanate established the Economic Coordination Council and the Businessmen Council. The Sultanate is not the only country to adopt these coordination strategies. In Malaysia, for example, the National Economic Council was established during the collapse of the Malaysian currency following the 1997-1998 Asian financial crisis.

If commercial enterprises were left to go bankrupt, this would not help anyone. That was the stance taken by Malaysian Prime Minister Mahathir when he established the advisory body following the Malaysian currency collapse. His biography documents his recognition of the importance of imposing taxes to support the state’s budget. The economic situation resulting from the collapse of the Malaysian currency required collective actions and joint efforts by participants from both the public and private sectors.

The world is currently dealing with circumstances as difficult as the Great Depression of the 1930s. Countries will need many years to return to the normal levels of growth they had in 2019. Official statistics indicate that the GDP decreased by approximately 15% of current prices, a figure which may not reflect the real decline in the economy as figures should depend on constant prices. What are the tools required today to achieve fruitful cooperation between the public and private sectors? Oman’s Vision 2040 aims to create the appropriate environment for an ‘enabled private sector that leads a competitive and integrated economy’.

This article considers the demands of the private sector for constructive dialogue, communication, and engagement, calling for an inclusive decision-making process. For an effective economic dialogue to take place, state-owned companies need to have effective representation in the Oman Chamber of Commerce and Industry (OCCI). The representation of some large family-owned companies in the OCCI is currently almost zero. How can we ensure a constructive dialogue between the public and private sectors if these important commercial institutions in the Omani economy are excluded from the interaction? The well-established SMEs sector also lacks representation in the OCCI, and it is crucial to engage these young people in the policy and decision-making process. Likewise, banks, which are major players in development and economic growth, are not engaged in dialogue with other economic stakeholders. Omani startups that will lead the digital economy are also excluded from the policy-making process.

The Dutch experience is instructive here. After World War II, the Dutch government was concerned that the country would return to the economic depression of the 1930s. There were impassioned debates about the future of the Dutch economy. These debates resulted in the establishment of the Economic and Social Council (SER). Over time, the SER has become one of the most important sources of consultation for the government and parliament alike in constructing socio-economic policies. The Dutch experience has meant that there are independent experts in the Economic and Social Council, in addition to private sector institutions and the trade union. This independent council is funded by the private sector and receives 16 million euros annually.

The role of the Dutch Social and Economic Council has evolved since the 1950s. It now provides consultations on various topics such as macroeconomic structure, pension systems, and transportation and industry strategies. Mahathir is also proud of Malaysia’s experience in providing an unprecedented model of cooperation between the public and private sectors. He claims that no country in the world has surpassed Malaysia in this type of cooperation. However, various Western journalists have accused him of favouring the private sector over the public.

This is not a call to establish councils, bodies, and committees, but rather a call for more discussion and reflection that can generate mechanisms to deal with current circumstances and create effective private sector engagement. We have already established councils, but we are not fully satisfied with these and are seeking new ideas in light of the current changes. What is the appropriate mechanism? How mature are our civil institutions? Is it preferable to select members by self-nomination or by appointment? There are three main components in ensuring an integrated vision for the formulation of socio-economic policies. The first is the public sector, which should be responsible for setting policies. The second is the private sector, which should drive economic growth, and the third is made up of independent experts who can ensure impartiality and provide objective opinions. Such experts are called Crown Members in the Netherlands.

Countries can adopt these mechanisms to engage all stakeholders in the process of formulating the economic and social policies, despite having other specialised chambers of commerce and parliament. Building public policy requires rich experiences and a deep understanding of details. These can only be obtained by going to the field or by drawing upon the advice of experts and specialists. Both methods require management and strategic capabilities. Advisory institutions provide room for engagement, dialogue, and diversity of experiences, as well as fostering an ability to overcome challenges in the field.
We can also learn from our previous experience with the National Programme for Enhancing Economic Diversification, launched in 2016. This programme took an unprecedented step towards enhancing partnership between the public and private sectors. The discussion sessions between the two sectors, hosted by the Thinking Unit at the Diwan of Royal Court, were also helpful but unfortunately stopped. A first step to partnership would be reinstating similar opportunities for productive dialogue.