Oman, A competitive environment and promising perspectives

A competitive environment and investment opportunities

Oman abounds with promising investment components in light of the favorable investment and legislative environment, the facilities and incentives made available to investors with the Sultanate launching the program for economic diversification within the “Vision of Oman 2020” which succeeded in achieving a concrete diversification in the national economy. Moreover, a strategy for development until 2040 was set up, targeting quality areas in the sectors of industry, transport, logistics, food security, fisheries, mining, tourism and other sectors.

Oman has made major strides in creating a favorable investment climate and providing facilities to investors in terms of infrastructure and new important projects in Duqm, Sohar and various areas in the sectors of industry, IT, tourism and other. These initiatives were backed up by the launching of programs for training the workforce, and particularly for encouraging entrepreneurship among youth.

According to the World Bank, Oman ranks third in the Arab region after UAE and Bahrain in terms of the ease for doing business. The chart below shows the ranking of Oman among 190 countries with regards to a number of main indicators for the ease of doing business.

 

Oman’s ranking in the World Bank indicators for ease of doing business for 2017 among 190 countries

 

Source: World Bank Doing Business 2017

 

Here below are the main objectives to be achieved:

-     Doubling tourism-related activities 8 to 10 folds in order to create more than 500 thousand direct and indirect job opportunities, and increasing the share of tourism to 6 to 10% from the GDP, while looking forward to establish 1200 small and medium enterprises in the tourism sector during the implementation of the tourism strategy.

-     Pursuing the establishment and development of industrial and free zones in the different governorates of the Sultanate, as well as allowing them to provide incentives, tax exemptions and facilities, especially in Duqm, Sohar, Salala and the major projects under completion in these areas at the level of main infrastructures, logistics and other productive and industrial projects. There is a focus on ensuring expansion and integration of existing areas and setting up new ones, and promoting small and medium industries.

-     Carrying on the development of agriculture and fisheries, and taking stock from world experiences for purposes of innovation and modernization; introducing integrated packages and systems  for harvesting techniques and a high quality of products as well as marketing and manufacturing processes with an optimal and sustainable use of natural resources, and early warning systems. This policy has led to an increase of the cultivated area by 25% in 2015, and thus achieved an increase in agricultural production alongside a record in fish production the same year.

-      Strengthening the investments areas in the sectors of health, education and logistics the potentials of which are still largely unexploited; taking stock from international experiences in developing the service sector, particularly the IT&Communication, the banking sector and the therapeutic tourism.

-      Promoting investments in the mining sector which accounts now for 33% of the Omani non-oil exports, and which is considered among the major promising sectors for investments given the highly viable components and estimations of minerals.

-      The importance of benefiting from the promising investment opportunities in the processing industries sector which represents now 11% of the GDP in Oman, especially after the launch of the “One Stop Station” where documents and permits related to investment activities are processed electronically, very easily, at high quality and in a clear and transparent way, so as to save time and efforts.

 

Evolution of investment projects according to the top 10 sectors between 2012- 2016 (US$m)

 

Source: Fdi markets

 

Major countries investing in Oman, 2012-2016

Ibid.

 

Development needs

The Sultanate of Oman has gone a long way in preparing the investment climate, while gaps still existing in the private sector are being dealt with, most important of which:

• The obstacle of access to finance for SMEs.
• The difficulty of access to land for economic investment
• Long procedures to obtain investment permits, and the importance of establishing one single authority to avoid delays instead of dealing with various bodies in charge of investments.

It is also very important to focus on the following:

• Coordination between the different free zones within the same country, each enjoying a competitive specificity so as to maximize their marketability and to benefit from their full potential.
• Identifying investment opportunities and specific projects to promote them with the local, Arab and foreign private sector.
• Promoting opportunities available near the free zones, and in which investment would reflect on the overall surrounding environment as well as on the free zones themselves.
• Increasing the operation efficiency of the free zones that should be a priority, especially underpinned by the government policy, and enhancing the ease of doing business.
• Expanding quality investments in the areas of agricultural development and fisheries.
• Working on training the managerial staff and other professional staff.
• Enhancing spending on scientific research in the agricultural sector.
• Supporting the launching of new generations of investors in the agricultural sector and providing them with assistance.
• Developing the efficiency of governmental services.
• Revising the labor policies and laws so they could become more flexible and meet investment and development requirements in the sectors of industry and mining; facilitating access to funding for private sector’s projects.
• Ensuring an appropriate promotion of the promising opportunities available for the private sector for added value projects in the oil and gas sectors.