Interview: Faisal bin Abdullah Al Rawas
How do you assess Oman’s efforts to enhance its competitiveness on a global scale?
FAISAL BIN ABDULLAH AL RAWAS: The government has adopted several policies to ease the intensity of economic fluctuations, such as the restructuring of public finances at the expenditure and revenue level through a value-added tax, and the reduction of subsidies. In addition to establishing new employment rules in the public sector and spending more on investment projects, a financial stimulus plan has been adopted. The sultanate’s credit rating has also improved, as the IMF expects the country’s fiscal deficit and debt to decline sharply following last year’s implementation of a medium-term plan to reform financial conditions.
In what ways can the government further assist local businesses to reach new export markets?
AL RAWAS: Greater access to new markets can be enabled by selecting commodities suitable for export, determining the quantities to be exported, and developing a marketing plan with clear objectives. Committing to solving initial problems and providing export-related financial support is key to this process.
There first needs to be an understanding of promising markets, followed by trade and economic agreements that serve the private sector in Oman, such as double taxation and transport agreements between the sultanate and target countries. These markets must also have an interest in locally produced goods. There are numerous potential markets in Asia and East Africa with a high population density and the ability to absorb products from several countries, including Oman.
What role will foreign direct investment (FDI) play in boosting long-term growth and what mechanisms can be put in place to increase FDI levels?
AL RAWAS: FDI helps create job opportunities and provides hard currency, which in turn is reflected in the ability to reduce the deficit and increase financing of internal and external investment in capital projects. This will eventually translate into long-term development.
There are many ways to increase FDI, including through incentives to investors such as lower taxes and guarantees in public-private partnership (PPP) projects. Oman must also implement legislation related to commercial courts and arbitration. Several recently implemented laws will have a major role in attracting investment, including the foreign capital investment law, the PPP law and the bankruptcy protection law.
Where do you identify the immediate priorities in plans to expand the non-oil economy?
AL RAWAS: One of the most urgent priorities for stimulating commercial activity is creating a regulatory environment characterised by renewal and flexibility that is aligned with development plans and guarantees equal opportunities. It is important to regulate the labour market according to professional standards and to create a working environment responsive to change. It is necessary to focus on the areas driving economic diversification, such as the sectors outlined in Oman Vision 2040.
To what extent are smaller businesses in Oman prepared to face economic challenges?
AL RAWAS: The ability of smaller organisations to overcome obstacles varies according to their financial solvency and the market conditions in the sector in which they operate. It also depends on the ability of their partners to bear the risks of continuing to supply funds. For example, the Covid-19 pandemic precipitated the exit of many firms from the market due to their inability to mitigate the repercussions of their activities.
The government should be more responsive to crises and be prepared to stimulate vulnerable sectors with credit facilities and by increasing its investment in capital projects, which in turn would be able to help companies continue their operations.
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