Oman’s economy heads into 2014 on a positive note, brought on by steady budgetary spending, new gas exploration efforts and renewed efforts to stamp out corruption. The authorities recently brought to trial nine officials from the private sector on charges of trying to bribe for lucrative oil and infrastructure projects.

The move signals a new-found drive to do away with corrupt practices in both public and private entities. More than anything, the initiative burnished the country’s image on transparency parameters.

Currently, Oman lags behind three other Gulf Cooperation Council (GCC) member countries on perceived corrupt practices in the public sector. The Corruption Perceptions Index (CPI), brought out by Transparency International, ranks the Sultanate at No. 61 worldwide, being the UAE (ranked 26), Qatar (28) and Bahrain 57). The Index looks into malpractices such as bribing public officials, kickbacks in public procurement deals and embezzlement of public funds.

The other notable development relates to the projected budget for fiscal year 2014, amounting to $35 billion and up from the originally planned expenditures of $33.5 billion and $26 billion in 2012 and 2011 respectively.

Still, the real spending figure could be higher by as much as $2.3 billion following a Royal Decree emphasising standardisation of public sector salaries and grades from January. Yet, the move paves the way for possible future budget deficits and authorities may not have enough of a cushion to avoid fiscal shortage. If that happens, this would confirm a warning issued by the International Monetary Fund (IMF) in its latest review of Oman’s economy.

The Sultanate is expected to generate substantial revenues on a sustained basis starting from 2017 on the back of a $16 billion investment venture by BP. The UK firm has signed a 30-year gas production and revenue sharing deal to develop tight gas at Khazzan’s field. The scheme is designed to extract about one billion cubic feet a day. The Omani side would reportedly earn 55 per cent of net revenues.

In addition, Oman enjoys attractive credit ratings from both S&P’s and Moody’s. In June, S&P affirmed a long-term rating of A with stable outlook. Understandably, S&P is pleased with the growth in gross domestic product (GDP), the rise in oil production and stable prices. The rating agency estimates real, adjusted for inflation, GDP growth of 5 per cent in 2013, certainly significant in the midst of current global economic challenges.

Oil production in 2013 was estimated at 940,000 barrels per day, up by an average of 20,000 bpd in a single year. In retrospect, oil output stood at 920,000 bpd in 2012 and 878,000 bpd in 2011.

Other positives relate to the government’s asset position and investment policies. S&P projects a fiscal surplus of 4.2 per cent of GDP in 2013, up from an estimated 3.3 per cent of GDP in 2012. Also, the current accounts balance stands at above 8 per cent of GDP.

The development partly reflects firmer treasury income thanks to steady oil production and price. The finance ministry had in the 2013 budget set the oil price at an average of $85 per barrel, well below prevailing market rates.

In a review of Oman’s economy under Article IV, the IMF estimates an average export oil price of $105 per barrel in 2013 and thus paves the way for higher revenues. Moody’s grants Oman an A1 sovereign rating on the back of absence of government debt and sustained fiscal surpluses.

Clearly, Oman’s economy is experiencing positives on numerous fronts, something that can be the envy of others.

The writer is a Member of Parliament in Bahrain.