Interview: Dominic Myers
How does Oman’s regulatory environment compare with the rest of the region? What measures might be considered to enhance the framework?
DOMINIC MYERS: As the fourth-largest employer of Omani nationals, the sales and distribution sector plays an important role in developing employment opportunities for the youth of Oman. For this to continue, there needs to be not only a healthy regulatory environment, but also leading companies that invest in recruitment, training and in-depth career development.
It is indeed a challenge to match the regulatory framework with the need to support growth in the sector. Oman has been trending towards more stringent regulatory controls. Many GCC markets have regulated prices since 2008, while Oman began doing so in 2011 through the creation of the Public Authority for Consumer Protection. Other GCC markets have also begun to recognise the effects of real inflation – salaries, housing, transport, education, etc – and have adopted a more tolerant approach to legitimate price changes, but this has yet to be adopted in Oman.
As a result of the challenges inherent in the development of the local labour market, the Ministry of Manpower (MoM) has needed to play a more prominent role in limiting the expatriate workforce than in most other GCC countries. Many Omanis seeking employment in the public sector perceive that they should not seek employment in the private sector. Closer coordination between the civil service and the MoM would significantly help to improve communication, planning and management of future salary increases in both the public and private sectors.
To foster an environment of positive engagement between the government and the private sector, many challenges must be overcome. While the ministries have the capacity to address many of the country’s demographic, income and employment challenges, there is also a push for a more entrepreneurial approach. However, young organisations struggle to navigate the challenges of creating and growing a new company.
What role will small and medium-sized enterprises (SMEs) play in the fast-moving consumer goods (FMCG) segment of the Omani retail sector?
MYERS: The government is working hard to encourage and facilitate SMEs as significant contributors to the economy. To aid the incubation of these companies, the regulatory environment, particularly with respect to pricing, management and employment, must be supportive. Many large business conglomerates are also providing active support by creating funds and incubating new ventures. There is also government assistance for the development of Omani brands. With the growing trend of mall shopping there is potential for SMEs to profit from the favourable retail environment. Outsourcing opportunities exist in the FMCG segment, further facilitating the development of SMEs. The segment could also build on the concept of in-country value. Ultimately, many of the challenges facing Oman can be solved by developing human capital and ensuring that young people are properly prepared, trained and qualified to seize opportunities.
In what ways are new technologies enhancing supply chain management in the FMCG segment?
MYERS: The traditionally unsophisticated, low-cost and expatriate-labour-reliant supply chain and distribution sector in Oman is changing rapidly with the emergence of larger specialist logistics management firms. Rising employment costs and productivity issues are fostering appreciation for cost saving technologies and more efficient processes, as seen through the increased use of training and monitoring to facilitate improvement controls, visibility and productivity. Retail sales are increasingly being invoiced and recorded, with more sophisticated analysis being carried out along the entire supply chain by suppliers, distributors and retailers alike. Although the current retail mix of international hypermarkets and local community grocers continues to limit process mechanisation, the industry trend is clearly moving in that direction.
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