Thursday 30 / January / 2025
Muscat: Oman’s Ministry of Finance has come up with six strategies to encourage investment in the country from both domestic and foreign sources.
The efforts come under its Medium Term Fiscal Plan, which aims to diversify the economy and provide good standards of living for Omanis, while maintaining the country’s fiscal deficit at a sustainable level.
“Oman is working on initiatives in local and foreign investment in order to achieve the following: provide more job opportunities, diversify sources of income, attract capital and expertise, facilitate the transfer of knowledge, bridge the gap between the rates of savings and domestic investment, and help local companies integrate into global value chains,” said the ministry in its report.
Oman continues to work on a number of measures to encourage investors to commit their resources to the country. In 2019, an integrated framework was created for the investment system in the Sultanate, through a set of laws that were issued in June 2019.
These include foreign capital investment laws, privatisation, public-private sector partnerships, and a bankruptcy law. After the regulations of these laws had been implemented, an effective legal framework was formed to ensure the private sector is able to play a vital role in the country’s economy, and stimulate various investment initiatives, whether local or foreign.
The country is also working on reviewing its labour market policies to make the country more investor and employer-friendly. As part of this, policies are being drafted so that companies will employ more Omanis, thereby giving citizens good living standards and work conditions.
“The Ministry of Labour is undergoing a comprehensive review, by focusing on the laws and regulations governing the labour market, and tracking significant changes in labour market conditions,” said the report. “As part of the country’s development, it is important to take stock of changes in the labour market and structure.
“Oman has to increase flexibility in the labour market and adapt to supply and demand,” the Ministry of Finance went on to say in its MTFP. “As part of this process, the Ministry of Labour is reviewing the policies and rates of Omanisation imposed on various sectors by making Omanisation targets more flexible.
“These policies will help increase employment opportunities for Omanis and help attract business by reducing structural labour rigidity,” the report said, adding that the government “seeks to improve the pace of economy growth through improving the business environment, restructuring of the labour market, and stimulating the economy through both domestic and foreign investment.”
Speaking to Times of Oman, Ahmed Kashoob, an economic analyst, said, “The primary role of foreign investment is to affect several factors, such as improving the balance of payments and the balance of trade. Foreign investment is one of the sources of hard currency or so-called cash reserves.”
“As for the role of local investment, it involves private sector investment by government companies, citizen-run companies, or joint stock companies, which will provide job opportunities and provide more business for small and medium enterprises, as well as create economic entities capable of facing any monopoly or competition.”
Explaining how the COVID-19 pandemic had affected investment in the country, he said, “Domestic and foreign investment are in decline in the Sultanate because supply chains for import, export and shipping have seen lower demand globally. Consumer purchasing capacity is also declining due to the circumstances of the pandemic, and this has been affected by the decisions issued at international and local levels such as suspending scheduled flights, temporarily closing airports, halting pleasure cruises, restricted land movement, and the closure of commercial and industrial establishments.”
