Muscat: The impact of COVID-19 has been felt differently across seven of Oman’s key economic sectors, according to a new research paper.
The paper is jointly written by Dr Hesham Magd and Dr Venkat Ram Raj Thumiki of the Modern College of Business and Science (MCBS), Faculty of Business and Economics, and looks at the impact of COVID-19 across the real estate, tourism and hospitality, manufacturing, education, logistics and transport, aviation, and agriculture and fisheries.
Titled ‘A snapshot of socio-economic impact of COVID-19 on the Sultanate of Oman: Measures and coping strategies’, the paper also identifies how private and public organisations involved in these activities took steps to mitigate the worst of the pandemic.
However, they add, some sectors, much like they have been impacted all over the world, such as tourism and aviation have, been far more affected by the pandemic than others.
“The logistics sector has contributed OMR1.091 billion in 2019 which is 3.73 per cent of the GDP,” said Magd, who is the faculty’s head and Associate Dean of Quality and Accreditation.
“Such an attractive sector has been affected by COVID-19 due to restrictions on the movement of people and goods. Despite the negative effects of COVID-19, the performance of Omani ports has been positive with around 2,500 vessels visiting Omani ports in the first quarter of 2020. It is only local trade and not international trade as Omani maritime trade is moderately impacted by COVID-19.”
“Oman’s higher education sector is mildly affected by COVID-19 as all higher educational institutions have transitioned to function online,” added Thumiki, an assistant professor at MCBS.
“The Government Communication Centre has decided to suspend the National Programme for Postgraduate Studies for a year considering the ongoing global COVID-19 pandemic. Schools in Oman have reduced fees as a show of support to the parents, which has totalled approximately OMR1.1 million, which could affect their future operations.”
The authors noted that two more sectors had been only somewhat affected by the pandemic, and had shown a resilience to its impact to continue functioning to the best of their capabilities during these uncertain and unpredictable times.
Magd explained, “Proactive measures of the Ministry of Agriculture and Fisheries in the form of adopting new projects increased fish farming from 33 tonnes in 2016 to 192 tonnes at the end of 2019. Thus, Oman stood as one of the largest fish producers in the Gulf region with a capture of 580,000 fish in 2019. Despite its strength, COVID-19 is expected to disrupt this market in the form of lack of buyers due to closure of the retail market.”
“COVID-19 has less impact on cement manufacturing in Oman as the Omani cement manufacturers braced to encounter this difficult situation,” revealed Thumiki. “Omani cement manufacturers are self-sufficient in raw materials. As global supply chains are affected, the movement of raw materials within the country has not been disrupted due to COVID-19.”
The authors added that Omani cement manufacturers had used innovative low-cost and eco-friendly strategies to fight this difficult situation, providing the example of manufacturers converting used tires into fuel used in cement production, which also went a long way towards sustainable waste management. Medical manufacturing companies in the country have benefited from manufacturing much-needed equipment during times like these, with some resorting to 3D printing technology.”
However, three sectors in the country – real estate, tourism and aviation – have faced a far greater brunt of the pandemic.
“Even before COVID-19, the oil crisis had impacted the real estate sector due to which property deals sharply fell by over 10 percent by the end of September 2019,” recalled Magd. “Despite this, the situation took a turn for the better from the beginning of 2020. Wherein, the first two months of total value of property transactions increased by 24 percent compared to the same period in 2019.
“Then, the introduction of COVID-19 worsened the situation as property deals and real estate transactions have been affected due to the restriction on the movement of people,” he added. “The real estate sector also suffered in terms of rent collection, as the tenants were unable to pay due to jobs being affected by COVID-19.”
Shedding light on how the aviation sector in the country had suffered because of the novel coronavirus, Thumiki revealed, “COVID-19 has severely affected the aviation sector. According to an estimate, in Oman, the flight disruptions could result in a two million loss in passenger volume. It has become imperative to pursue the recovery plan to resume flights in the Sultanate.”
The authors pointed out that the country’s aviation sector had grown threefold between 2010 and 2019, with airports being a major contributor to national revenue. More than 100,000 flights operated last year, serving upward of 16 million passengers.
With flights suspended and people told to stay at home to avoid spreading infection, revenue from tourism sharply declined because of the virus. The authors explained in some detail the impact on the various tourism offerings. Some 284 cruise ships were expected to visit the country during the 2019-2020 season, but many of them have now been anchored, while there have been few visitors to tourists hotspots such as the Khareef Festival, as well as the mountainous areas of Jabal Akhdar and Jabal Shams.
Explaining how Oman’s MICE (meetings, incentives, conferences and events) sector had suffered, Thumiki said, “Like many other nations across the world, the tourism sector in Oman has been suffering severely as movement is restricted due to COVID-19. Yet, this sector has also suffered the negative effects of COVID-19. The Oman Convention and Exhibition Centre, which was expected to host an average of 30 events per year, has cancelled all activities and events planned between March and July 2020 until further notice.”
This sector was impacted significantly in terms of rent collection, property deals and real estate transactions
It has become imperative to pursue the recovery plan to resume flights in the Sultanate, owing to its contribution to the country
The transition from traditional to online modes of education meant this sector was not strongly impacted by the pandemic
Local manufacturers used the challenges thrown up by the pandemic to successfully create alternative strategies to function at this time
Agriculture and fisheries
Oman had the highest fish catch among the Gulf countries last year, but the impact of COVID-19 on the retail market has affected food sales
Tourism and hospitality
Key to tourism growth and income contribution in the country are domestic and international travellers. Their absence means tourism has been greatly affected by the disease
Logistics and transportation
Oman continues to aim to become a logistics and transportation hub in the region, with the performance of the Sultanate’s ports remaining positive.