Buy local, for the sake of Omani economy

Oman needs to successfully implement its In-Country Value (ICV) policies to revitalise its economic programme by re-positioning and better re-utilising its assets and natural resources.
The government had envisioned a budget of $64 billion from the oil windfall to cover the period between 2013 and 2020 to keep the wheel of the economy rolling. However, with the international oil prices starting to collapse in late 2014, many of its development programmes have been put on hold.
ICV is practiced around the globe in different formats and it has been a catalyst for the redistribution of revenues in many countries.
In Oman, the state-owned oil and gas companies have already put ICV in motion but the practice has not caught up with all industries. The reason the energy sector has been a pacemaker of ICV program is the simple fact that the industry generates over 80 per cent of national income. But even in the energy sector, ICV has not yet embraced the entire process. It is mainly concentrated in training and the Omanisation drive. But the stakeholders of the ICV programme are not just the workers and their development.
ICV must be measured in terms of monetary value as well. How much money is spent in the country and how much money is repatriated out of the country by foreign companies is one way to provide a yardstick for ICV. The government is awarding a few billion rials worth of contracts every year and how much is retained in the country is an important part of it. In other words, monitoring the performance of the chain value generated by these contracts is essential.
For example, there should be conditions set up by the government to ensure recipients of contracts buy locally manufactured materials instead of leaving it open. This scheme will create commercial benefits, as well as social harmony, to boost economic growth and sustain development. It will also relieve the burden of foreign contractors of recruiting a large pool of Omanis because the subcontractors would share the responsibility. Locally based manufacturers of concrete materials, steel, aluminium or petroleum product would not struggle under ICV programme. The other advantage of creating a percentage of contracts to be spent at home will encourage local business people to establish more manufacturing units in the Sultanate.
This practice will also reduce Oman’s balance of payments by cutting down on import bills and keep its foreign currency reserves at a sustainable level. At the moment, Oman’s exports have reduced in value but the value of imports has increased due to lower oil prices. When the government established industrial estates and Free Trade Zones (FTZs) in the early 1980s, Sohar and Salalah were envisioned as the leaders of Oman’s industrial revolution. The two cities did not really live up to their expectations, mainly because the ICV was not included in the blueprint.
These cities did not provide broader opportunities for local business to set up manufacturing units. Had ICV been a prerequisite three decades ago, Sohar and Salalah would have now been serious contributors to the economy. Instead, most of the raw material for the industries there and other developments are imported. The government is either wholly owning industries in Sohar and Salalah or have a stake in them. Moreover, because of the slackness of the ICV programme, Omanis living in those areas still flock to Muscat looking for jobs.
If ICV is seriously implanted across the board, the Oman Tender Board must come on board. Contractors, whether foreign or local, must have a quota of the awarding sum to be spent in the country. If they fail to adhere to the contractual conditions, they should be banned from tendering for the next project. A successful national campaign is needed to spread awareness that local outsourcing can be cost effective and build community ties. It makes a difference not only to the economy and employment but to the business environment. It is also ethical to demand goods that are supplied closer at home.