Muscat: Heavy investment in innovation and digitalisation and an even more effective distribution of fiscal stimulus packages to COVID-hit firms are among the recommendations of a study into the impact of the pandemic on the economy of Oman.
The study, led by Dr. Ashraf Mishrif, OCCI Chair in Economic Studies at Sultan Qaboos University, and funded by the COVID-19 Research Programme of the Ministry of Higher Education, Research and Innovation is titled ‘The Impact of COVID-19 on the Omani Economy’.
For this study, principal investigator Dr. Ashraf Mishrif and his team aimed to provide an in-depth analysis of the actual impact of the COVID-19 pandemic on the Omani economy and the amount of the damage that has been done to key vital sectors such as transportation, logistics, SMEs, manufacturing, labor, insurance and finance. The findings of this study were based on primary and secondary data gathered through the design and distribution of survey questionnaires as well as semi-structured interviews with government officials, corporate executives, and business owners and managers from Oman.
According to Dr. Ashraf Mishrif, the impact of the pandemic has been severe as the economy heavily depends on the hydrocarbon sector, which accounts for 30 per cent of GDP. The lockdown and immobility have resulted in the significant reduction in the performance and activities of factories and commercial centers due to decrease in demand of products and services. Initial investigations have shown that most manufacturing and non-manufacturing sectors have suffered significant revenue and workforce losses as a result of frequent border closures, service interruptions, demand drops and supply shortages.
In order for the economy to flourish in Oman, Dr. Ashraf Mishrif has recommended a series of actions to be taken into consideration by the government and the business sector based on the findings of his study. He recommended that the government and private sector enterprises must heavily invest in innovation and digitalisation in order to upgrade the economic and civil institutions in a way that accelerates the engagement with the technological advancement of the fourth industrial revolution, and that the government has to find more effective mechanisms to distribute fiscal stimulus packages to companies affected by the COVID-19 pandemic, as many of the small and medium sized enterprises interviewed by the researchers complained that they did not benefit from these schemes.
He also recommended that the Ministry of Higher Education, Research and Innovation has to initiate and support various innovation schemes at the universities and research centers to serve as backbone of knowledge generation and technological development that will put the Sultanate of Oman at a competitive edge in the ensuing years. The study also encourages high level of coordination between the Ministry of Labour and Ministry of Higher Education, Research and Innovation to address the mismatch between the required skills and education outputs and prepare the national workforce with the right skills to work in areas as artificial intelligence, big data mining, and the internet of things since the study has found that many job vacancies were not filled after the departure of expat workers due to lack of technical skills among nationals.
Dr. Ashraf Mishrif lastly recommended that government officials and company executives must put in place alternative strategies to deal with unexpected circumstances and be accustomed to deal rapidly and effectively with frequent natural disasters, biological wars and global financial crises in order to minimize the impact of similar crises in the future.