Economic situation in Oman

FCO 8/2463 1975 Jan 01 - 1975 Dec 31

This file is part A of a series concerning the economic situation in Oman. It contains correspondence and accounts relating to:

  • A financial crisis and rising deficit in Oman, resulting from overcommitment in capital expenditure
  • The deficit projected by the Sultan's economic advisor J S Townsend to reach 457-milllion Omani Riyals
  • The efforts of Townsend to discourage more lending to the Sultan from the British Bank of the Middle East (BBME) and Morgan Grenfell and Company Limited by warning them of the deficit
  • The question of whether two other British banks, the Chartered Bank, and Grindlays Bank should be warned about the Oman deficit crisis
  • Unsigned draft regulations, prepared by Townsend, barring new contracts
  • A new contract for construction work on the airport for Salalah
  • Pauling (Middle East) Limited construction projects, including at Midway airfield
  • A proposed French ship-repair facility
  • The corruption among the Sultan’s advisors, known as the Oman ‘Mafia’
  • A new contract due with Shell granting guaranteed revenues for Oman
  • The possibility of Oman assigning its oil revenues over to the BBME to cover new loans
  • The conflict arising in the BBME between its commercial interests and its role as central banker to Oman
  • Possible bridging loans from the BBME, Iran, and Chase Manhattan
  • The discussions of David Douglas-Home about BBME with the Sultan
  • The possibility of Yahya Omar raising a £300-million bridging loan
  • A bankers' meeting in London on 1 February 1975, and a "Bankers' Mission" to avert the crisis
  • The possible role of an International Monetary Fund lending facility, ‘Witteveen II’
  • Articles on the crisis in the Financial Times, the International Herald Tribune and the Guardian dated 18 Feb 1975