Study highlights Oman's transition to post-oil economy

Business Monday 17/September/2018 16:27 PM
By: Times News Service
Study highlights Oman's transition to post-oil economy

Washington: The development of Duqm Port and Special Economic Zone in Duqm (SEZD) is at the forefront of Oman’s efforts to transition to a post-oil economy, a recent economic study published by the Middle East Institute in Washington said.
Themed "Oman's Transition to a Post-Oil Economy: Arching Toward Asia," the study praised the model of economic transition management being pursued by the Sultanate's government in a bid to achieve economic welfare via combining free trade and attracting foreign investments.
The study pointed out that the Sultanate continued to tackle regional and international economic challenges particularly in relation to oil price slump. The Sultanate raised the minimum wage for private sector's employees, which is described by the study as "economic and social achievement". The study added that the Omani economy has returned to growth that drives Oman to harder and faster toward a post-oil economy.
The study further said that in 1995, following a decade of fiscal deficits and weak oil revenues, Oman became the first Gulf Cooperation Council (GCC) country to draft a long-term development strategy in the form of a “Vision” document. The Omani authorities launched Vision for Oman’s Economy 2020, a roadmap for transitioning from a hydrocarbon economy, unleashing the private sector, and creating a broad industrial base. The current 9th Five-Year Development Plan (2016–2020) emphasises the need to accelerate diversification. The Plan targets five sectors for development: manufacturing, tourism, transport and logistics, mining, and fisheries.
In an effort to address the challenges associated with achieving the objectives of the 9thFive-Year Plan, the Sultanate, represented by the Supreme Council for Planning (SCP) created the National Programme for Enhancing Economic Diversification (Tanfeedh), whose chief aims are to identify the responsibilities, resources, and timeframes needed for implementation of initiatives that drive economic diversification; set clear standards and Key Performance Indicators (KPIs) for said initiatives; and provide periodic reports on the progress achieved in the implementation of the initiatives to ensure that the public is routinely informed of the programme’s progress.
With the adoption of the Tanfeedh programme, Oman embraced the opportunities presented by developing itself as a key logistics hub in the Middle East. This focus on utilizing the Sultanate’s strategic location and improving the logistics sector impelled Oman to draw on best practices.
The study pointed out that within the Tanfeedh framework, the logistics sector is considered as being a key to inward investment and a critical enabler for various businesses operating across the Sultanate, with the country’s seaports constituting its backbone. The overarching aim is to leverage Oman’s strategic location at the crossroads of the Arabian Sea and the Indian Ocean and in close proximity to some of the world’s busiest maritime trade routes.
The economic study added that underpinning the transport and logistics infrastructure that Oman has sought to put in place are the ports of Duqm, Salalah, and Sohar. In all three cases, Oman has succeeded in attracting international partners, especially from Asia. Salalah Port offers one of the fastest transit times from the region to connect businesses to the Asia-Europe trade lane. Capacity expansion work at Sohar Port has facilitated direct calls from larger vessels and an increasing number of Asian shipping lines, thereby contributing to the port’s emergence as the largest dry bulk cargo facility in the Middle East and South Asia.
The study furthered that the Special Economic Zone in Duqm (SEZD) has emerged as the flagship of Oman’s port expansion, is regarded as the “prime mover” of the SEZD and is envisaged as a major contributor to the country’s economic diversification efforts.
Sezad has cast a wide net in seeking to attract foreign investors and firms, and thereby gradually transform Duqm into a gateway port and trans-shipment hub. Just as Tanfeedh has been informed by the “Malaysian model,” so too Oman’s efforts to develop Duqm have drawn upon the Singaporean “experience” — and on Singaporean talent.
The specialised economic study said that Oman’s aim of transforming the Port of Duqm and surrounding SEZD has converged with China’s Belt and Road Initiative (BRI), that is, with Beijing’s search for an operating base from which Chinese enterprises can develop export markets in the Gulf, the Indian subcontinent, and East Africa. These convergent interests have already yielded concrete results represented in the Omani-Chinese cooperation in developing Port of Duqm.
The study issued by the Middle East Institute in Washington concluded that Oman’s plan to transform Duqm Port and SEZD is a key pillar of the country’s broader development strategy, which aims at diversifying the economy.