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India, Oman plan to beat global credit squeeze

Sandeep Dikshit

— Photo: AFP

Omani Deputy Prime Minister Sayyid Fahd bin Mahmoud Al Said (right) welcomes Prime Minister Manmohan Singh at the Muscat airport on Saturday.

MUSCAT: India and Oman on Friday set the stage for stimulating bilateral investments at a time of global credit squeeze by agreeing to set up a joint investment fund whose seed money could go up to $1.5 billion, highly placed government sources said after a meeting between Prime Minister Manmohan Singh and Oman’s Deputy Prime Minister Sayyid Fahd bin Mahmoud Al Said.

Both countries also took important steps to ensure the welfare of the large Indian population working in Oman and ensure that Indians would be given priority in recruitment at a time when the Gulf country is cutting down on expatriates in order to bring down the unemployment rate among its citizens.

Two memorandum of understanding were signed to cover both the aspects. With trade between India and Oman going up by double digits, the fund, with the initial seed money of $100 million, will become an “important gateway” for the inflow of funds in both countries, said the sources. The “unique arrangement” could set the stage for similar agreements with other countries which are flush with oil money funds at a time when the world is facing a credit squeeze.

As the Prime Minister noted, “the current international economic and financial situation provides a unique opportunity for India to leverage the vast surplus funds in the Gulf for our development needs, and to accelerate trade and investment flows into each other’s countries.”

The MoU for the joint investment fund was signed between the State Bank of India and the State General Reserve Fund of the Sultanate of Oman . It would focus on infrastructure, tourism, health, telecom and urban infrastructure. The fund is for an initial period of two years and is “extendable,” said the sources.

The countries also signed an MoU aimed at improving the working conditions of the Indians in Oman, especially in case of a dispute between the employee and employers. More important, the MoU stated that the two sides shall take measures to facilitate recruitment of Indian manpower and exchange of visits between officials for consultations in job creation and generation of employment opportunities.

The two sides discussed measures to intensify cooperation in the defence field by undertaking more high level exchanges of personnel and ships. The issue was discussed in depth by National Security Advisor M. K. Narayanan and Defence Secretary Vijay Singh with senior members of the Omani security establishment.

Dr. Singh also broached the issue of expanding the capacity of the Oman-India Fertilizer Company which is one of India’s largest joint ventures abroad. Earlier, the Prime Minister was accorded a reception normally reserved for the heads of state. Dr. Singh was received at the airport by the Omani Deputy Prime Minister (the country has no Prime Minister) and other senior Cabinet Ministers as a gesture of the special affinity between the two nations. Dr. Singh’s visit to Oman is the first by an Indian Prime Minister in a decade.

About 5 lakh Indians work in Oman and the presence of Minister for Overseas Indian Affairs Vyalar Ravi and Minister of State for External Affairs E. Ahmed is indicative of New Delhi’s desire to improve their working conditions. In fact, Mr. Ahmed had recently taken the initiative to secure amnesty for 2,000 Indians whose visas had expired and who were facing heavy penalty for overstaying in the country.

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