MUSCAT – Oman is banking on oil prices staying high this year to fund heavy spending on job creation and social welfare, according to plans released on Wednesday. Finance Minister Darwish Al-Balushi told a news conference that Oman, whose revenues come mostly from oil and gas exports, would need an oil price of $104 per barrel in 2013 to balance its state budget. Brent crude oil was trading at $112 in global markets Wednesday. “Last year we created 36,000 jobs for Omanis by spending 300 million rials ($780 million),” Balushi said. “This year we will create 56,000 jobs, of which 20,000 will be in the government sector.” Oman's 2013 budget envisages spending of OMR12.9 billion ($33.5 billion). The International Monetary Fund estimates that unemployment among Omani citizens may have exceeded 20 percent in 2010. Government officials say that estimate is far too high and that the number of registered unemployed was reduced by three-quarters to about 17,000 last year, in a population of roughly 2 million Omani citizens. Strong economic growth is key to keeping down unemployment, and the 2013 budget plans indicate the government will keep spending high in many areas despite the growing risk of running a deficit if oil prices fall. Oman envisages total state spending of 12.9 billion rials in 2013, up nearly 30 percent from its 2012 plan. Spending on investment, including ports, roads and facilities to produce oil and gas, is earmarked to climb 14 percent to 3.1 billion rials. Actual state expenditure last year was about 13 billion rials. The government was able to overspend its budget by a large margin and still post a budget surplus of about 1 billion rials in 2012 because oil prices were high, averaging $109 per barrel instead of the $75 for which the country planned. This year's budget is based on an average oil price of $85 and envisages a deficit of 1.7 billion rials. — Reuters
