Tuesday 23 / April / 2024
Muscat: Oman is one of the safest and most financially sound countries in the world, according to a global report. And the country’s “substantial fiscal reforms” have helped weather the tough global downturn, according to the new report by the World Economic Forum (WEF).
The Sultanate was ranked first out of 137 countries in terms of its rate of inflation, clocked at just 1.1 per cent.
Oman was also placed third globally for having the least amount of organised crime and fifth because of its low rate of illegal financial activity, in the WEF’s Global Competitiveness Report for 2017-18.
Low taxes meant Oman came sixth worldwide as a destination people wanted to work in, and ninth as one where organisations were happy to invest.
Its police force was also ranked one of the most efficient in the world, with the country also being ranked 10th in the world for effective government spending. Residents and experts welcomed the findings, and couldn’t agree more.
Oman also has the world’s lowest prevalence of malaria and HIV, according to indicators in the globally recognised report.
The Sultanate jumped four places to be ranked 62nd across 137 economies in the world.
“Oman improves in terms of its macro-economic environment and higher education and training,” said the report. “The government is passing substantial fiscal reforms to help the economy adjust to the new situation of low oil prices and preserve the sustainability of public finances.
“These reforms include a cut in fuel subsidies and other distortive fiscal measures, an increase in corporate tax and the introduction of a GCC-wide VAT system in 2018.”
But the report did carry a warning for Oman. “Overall, the country can rely on strong institutions and infrastructure, however, it needs to continue efforts to upgrade education and training systems and fundamentally reform the labour markets,” it added.
The mainly positive report has been welcomed by economic analysts and experts in the country.
“Oman is also considered to be among the top 10 fastest growing destinations between 2016 and 2026 for leisure travel spending,” said Dr. Anchan CK, an investment advisor based in Oman.
“This is because it has been ranked one of the safest countries in the world.”
“International reserves remain relatively comfortable, and private sector credit growth is healthy, aiding consumption and investment,” he added.
“While hydrocarbon production will be increased by the Khazzan-Makarem gas field, which could come online, there will be expansion of 1.1 per cent for 2017 and 2.5 per cent for 2018.
“The score improves across the pillars of institutions, infrastructure, microeconomic environment, health and primary education, reflecting recent public investments in these areas,” said Anchan.
Oman’s Chamber of Commerce and Industry (OCCI) was also eager to shed light on the country’s global ranking.
“It is very good to see the World Economic Forum ranking us high in things like investment, though we have to still improve a lot in this,” said Ahmed Al Hooti, a member of OCCI. “Our regulations for labour laws, such as increased fees for expat employees need to improve. We hope to have this done so we can be a more attractive destination for investments.”
“We have to be aware of running and doing business and have more regulations so it does not hurt or discourage investment in the country,” he explained.
“There are countries in this region competing to open their economies to investment and if we are to increase our taxation or fee for things like expat workers, they will be more attractive than us. We can’t afford to have that.”
Mohammed Nayaz, partner at EY Oman added, “The direction in which the economy is going is great and shows the strong institutions, but the pace and decision making is the thing that needs to improve. I think overall the economy is in a good place and with little more improvements it will be perfect.”
Richard Samans is one of the co-authors of this report. As Head of Global Agenda, he is well placed to speak on what lies ahead for Oman.
“As we approach the 10th anniversary of the global financial crisis, the world economy is showing encouraging signs of recovery, with GDP growth accelerating to 3.5 percent in 2017,” said Samans, also a member of WEF’s managing board.
“Despite this positive development, leaders are facing major predicaments when it comes to economic policy.
“The goal of human-centric economic progress is the increase in sustainable and equitable welfare for a country’s population,” he added.
“And while economic growth, as measured by GDP, is not an end in itself, it remains a pre-condition for enhancing human welfare.”
One resident in Oman was optimistic about the future.
“I have lived in many other Arab nations, and have found Oman to be one of the safest and most affordable places to live,” he said. “Costs are increasing, yes, but they are still nowhere as high as they are elsewhere. Oman’s government also takes good care of its people and is actively addressing problems that they are facing, so I think we must be grateful for living in such a nice country.”
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