Oman embarks on rare anticorruption drive

By Saleh al-Shaibany

MUSCAT (Reuters): Oman is clamping down on corruption with unprecedented vigor, hoping a clean image will boost confidence at home and lure foreign funds needed to broaden the crude oil- led economy.

Since October, courts in the tiny Gulf Arab state have sentenced more than 20 top government officials and bankers on charges of embezzlement and illegal trade practices in trials held under public scrutiny for the first time.

"Enough is enough, we want to eradicate high-level corruption and our net is big enough to cover even top officials, whoever they might be," a government official on an anti-corruption panel told Reuters.

Oman's first public graft trial ended with Juma bin Hamad al Nasri, chairman of state-run Oman Housing Bank and a former ministry under-secretary, sentenced to four years in jail.

The court also handed down a six-year prison term to the bank's general manager Mahmoud bin Mohammed bin Burham and ordered him to be fined "three times the amount he robbed".

The verdicts marked the beginning of what has now become an intensive investigation that has so far focused on the government's management of the economy.

A senior police officer said that the government of Sultan Qaboos bin Saeed was determined to flush out all "criminals" from public office.

"We are now ever so vigilant to protect the public interest," he said. "Let our efforts be a warning to others in positions of trust who think they can get away with it."

Analysts said Oman's anti-corruption drive was aimed mainly at attracting the foreign investment it is seeking to diversify its economy.

Its output of 900,000 barrels a day accounted for 80 percent of income last year.

The Gulf state joined the World Trade Organization (WTO) last year. Officials say the government is banking on eight big projects designed to lure private investment of 2.93 billion rials (US$7.6 billion) into the economy.

"The recent imprisonment of central bank officials is a clear message to foreign investors that Oman is fighting corrupt practices from the top financial institution," said a veteran Western diplomat.

In May, a court found Mohammed bin Abdelaziz Kalmoor guilty of fraud in his capacity as chairman of the state-run Institute of Banking and Financial Studies.

Kalmoor was also an executive vice president of the Central Bank of Oman. Four more officials and 11 foreign workers were convicted in the same case.

Oman's clean sweep has also extended to the Muscat Stock Exchange, once the most thriving market in the region but which has languished at five-year lows for months.

Investors deserted the bourse after widespread malpractice by exchange and company officials, analysts say.

"The main problem has always been that some individuals with the right connections thought they were above the law and they could manipulate the shares to their favor," a financial analyst said.

"Not any more. The government has just demonstrated that it will provide no exemption to anybody," he added.

In May, Mohammed bin Musa al-Yousef, Oman's minister of state for development affairs between 1995 and 1998 and a prominent businessman, was sentenced to six years in prison for allegedly breaching trust and tampering with share prices.

Al-Yousef was the former chairman of Commercial Bank of Oman and ONIC Holding, both blue-chip firms on the bourse, where the all-share index is currently trading down 243 points from a record high of 408.58 points in December 1997.

The stock exchange has lost about 17 percent this year amid fresh liquidity fears. Officials have recently changed the index to include more frequently traded shares and reviewed transparency laws in a bid to restore investor confidence.

They also appointed a new bourse chief.

The authorities "name-and-shame" approach to corruption has astounded ordinary Omanis, and at the same time inflated their civic pride.

"I did not think I would live to see the day when top civil servants would be thrown into prison for corruption," Said bin Ali, a retired civil servant, told Reuters.

"I now look at the national flag with pride and pray to God to give our leader more courage to eradicate corruption in our blessed country," he said after attending a graft trial.

Hamed bin Saif, a technician in a privately owned firm, said the anti-corruption trials had boosted his confidence in the government and left him feeling vindicated.

"It is about time these corrupt officials were taught a lesson. They loot from the government to fatten their bellies at the expense of ordinary nationals like us," he declared.

"There are more like them out there and we know that the government is not going to stop now."