Economy
From The Report: Oman 2020
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Given its natural assets, strategic location and appealing geography, Oman has the resources for significant economic expansion. Although the sultanate remains dependent on oil and gas, efforts to diversify the economy are already bearing fruit. While the private sector has benefitted from the many investments committed in the days of higher oil prices, since the global drop in energy prices in 2014 the government has had to contend with a series of budget deficits and rising debt. However, debt levels remain manageable, and the government has implemented a series of fiscal reforms to get the budget back on a sustainable path.
This chapter contains interviews with Qais Mohammed Al Yousef, Chairman, Oman Chamber of Commerce and Industry; Yahya Said Al Jabri, Chairman, Duqm Special Economic Zone Authority; Azzan Al Busaidi, CEO, Public Authority for Investment Promotion and Export Development; and Abdullah Al Salmi, Executive President, Capital Market Authority.
Articles from this Chapter
New buoyancy: Omanisation quotas, privatisation and diversification efforts target local growth in a lower-oil-price environment
Positive integration: Qais Mohammed Al Yousef, Chairman, Oman Chamber of Commerce and Industry (OCCI), on private sector development and the Tanfeedh initiativeOBGplus
Interview:Qais Mohammed Al Yousef How does the Vision 2040 development strategy encourage private sector growth? QAIS MOHAMMED AL YOUSEF: Vision 2040 seeks to develop a competitive economy with the private sector as the true driver of growth. Since 1970 the private sector has expanded primarily due to contracts with the government. Initially the government was responsible for managing the risk, operations and follow-up for major projects, while the private sector was only focused on execution.…
Targeted development: National development blueprints outline priority sectors under broader efforts to diversify the economy away from oilOBGplus
In its bid to drive diversification and economic growth outside the Muscat area, Oman has invested heavily in special economic zones (SEZs). A particular focus is on increasing the level of private sector activity, feeding into the Vision 2040 target of having 90% of GDP come from non-oil sectors and boosting the proportion of Omani employees in the private sector to 40%. Oman’s five-year plan for 2016-20 identifies five priority sectors for this diversification: manufacturing, tourism,…
In the pipeline: Yahya Said Al Jabri, Chairman, Duqm Special Economic Zone Authority (SEZAD), on the zone’s infrastructure projects and the areas most ripe for investmentOBGplus
Interview:Yahya Said Al Jabri Which Omani sectors have been generating greater interest from investors? YAHYA AL JABRI: SEZAD received around 425 investment applications in 2018. The projects currently in the pipeline span all sectors targeted for investment, namely manufacturing, tourism, warehousing and logistics, and professional services. The zone offers a range of investment opportunities, and more will come on-line after the establishment of the oil refinery, the crude storage depot…
Returning to surplus: A number of fiscal reforms look to reduce the deficitOBGplus
Following the drop in oil prices in 2014, the government budget has fallen into deficit. As a result, the authorities have implemented a bold series of fiscal reforms since 2015 to shift the budget on to a more sustainable trajectory. For instance, 2019 saw the introduction of a series of new excise taxes, referred to as sin taxes, on alcohol, pork and meat. In addition, fuel subsidies have been reduced, there has been a freeze on hiring and promotions in the public sector, and a variety…
Tailored growth: Azzan Al Busaidi, CEO, Public Authority for Investment Promotion and Export Development (Ithraa), on non-oil exports, strategic partnerships and the expansion of the local workforceOBGplus
Interview:Azzan Al Busaidi How would you assess the growth of non-oil exports in the country, and to what extent will special economic zones play a role? AZZAN AL BUSAIDI: As of 2019 Oman exported OR3.7bn ($9.6bn) of non-oil exports annually, compared to OR175m ($454.5m) in 1997. Omani products that are exported find their way easily to markets in the US, UK, GCC and even Australia. Oman exports to more than 130 countries around the world. Many of these goods are manufactured in industrial…
High impact: Abdullah Al Salmi, Executive President, Capital Market Authority, on the implementation of new laws and platformsOBGplus
Interview:Abdullah Al Salmi How does the Foreign Capital Investment Law ensure the rights of newly formed firms, and what impact has the Invest Easy platform made? ABDULLAH AL SALMI: Ensuring the rights of international investors remains of utmost importance under the new law. Under Article 13 investor information will be kept confidential, and if breached, government entities will be held liable for any damage incurred by foreign investors. In addition, any investors involved in court cases…
Facilitative framework: A range of new laws seek to establish an environment for growthOBGplus
In 2019 Oman introduced legal reforms that have the potential to provide a considerable boost to the economy and development of the country. However, the final impact of the reforms will be decided by the executive regulations, the detailed rules around implementation and the day-to-day operation of the laws. The reforms aim to improve the regulatory environment for investment and encourage greater private sector participation in the development of the economy. These objectives are in line…
Shifting trade winds: Regional integration among emerging economies and a raft of new multilateral agreements bolster international tradeOBGplus
Global trade faces protectionist headwinds that are dampening the outlook for growth in the coming years. According to the World Trade Organisation (WTO), trade volumes grew by 3% in 2018 and are anticipated to decline slightly to 2.6% in 2019 before rebounding to 3% in 2020. This may be the first time since the 2007-08 global financial crisis that growth will fall below a 3% average, as significant uncertainty driven by an escalating US-China tariff war, acrimonious Brexit negotiations, and wariness surrounding US involvement in several multilateral trade agreements affect business confidence and investment decisions. Nevertheless, although…
Shifting trade winds: Regional integration among emerging economies and a raft of new multilateral agreements bolster international tradeOBGplus
Global trade faces protectionist headwinds that are dampening the outlook for growth in the coming years. According to the World Trade Organisation (WTO), trade volumes grew by 3% in 2018 and are anticipated to decline slightly to 2.6% in 2019 before rebounding to 3% in 2020. This may be the first time since the 2007-08 global financial crisis that growth will fall below a 3% average, as significant uncertainty driven by an escalating US-China tariff war, acrimonious Brexit negotiations, and wariness surrounding US involvement in several multilateral trade agreements affect business confidence and investment decisions. Nevertheless, although…
