Measures to counter effects of oil price decline

In the past few decades, the Sultanate has been sparing no effort to develop economic sectors in the country in line with its economic diversification policy and the ‘post-oil era’. Accordingly, it has developed several industrial estates and free zones across the country housing hundreds of industrial units that produce several commodities and products that can replace the imported products.

Oman is taking many initiatives to develop the tourism sector and increase its GDP contribution to 6 per cent by 2020. Interestingly, several other non-oil economic sectors such as agriculture, fisheries, mining and logistics have witnessed a boom in the last few years.

This boom can help transform Sultanate into a re-export hub of different commodities and products in the region in the coming period.

Meanwhile, the Sultanate is taking a host of measures to counter the effects of global decline in oil prices.

These measures have been lauded by the International Monetary Fund (IMF) which expects Oman to record a moderate increase in its GDP. It also feels the measures adopted by the country will help Oman reduce expenditure by $4.5 billion in 2016.

The IMF statement indicates the need to implement gradual financial amendments starting 2017, stressing that despite the bold measures taken by the Sultanate so far, the decline in oil prices has had a negative impact on the country’s economy.

This confirms that falling oil prices make the government and the public sector to speed up economic diversification by increasing the role of the private sector through facilitation of services and enhancement of business environment. This will help attract foreign investments into the country.

Further, a comprehensive development of the country can be ensured by encouraging the growth of small and medium enterprises (SMEs) as it has the potential to not only create innumerable employment opportunities, but also successfully contribute to increasing the share of non-hydrocarbon exports in the coming years.

In this regard, private sector companies have already started supporting Oman’s attempts at economic diversification by taking a host of initiatives. For instance, the board of directors of Oman Chamber of Commerce and Industry (OCCI) recently decided to establish the Omani Investment Council (OIC) to increase participation and role of private sector companies in attracting foreign investment to Oman.

These initiatives, taken up by OCCI and private sector, are aimed at strengthening government efforts to ensure economic diversification, particularly in light of the unstable oil prices.

In the tourism sector, for example, the Sultanate is all set to implement its new National Tourism Strategy 2040.

This strategy will provide over 500,000 jobs in the tourism sector by 2040, 70 per cent of which will be earmarked for Omanis. The strategy is expected to transform the Sultanate into a modern tourist destination in the future.

The fisheries sector, another promising economic sector, is expected to bring lots of local and foreign investments in the future.

The Sultanate needs greater infrastructure facilities, including more factories and fish processing and production-related units, landing docks, fishing ports, and marketing and branding facilities before it can export products on a large scale.

Oman has developed several industrial estates and free zones across the country housing hundreds of industrial units that produce several commodities and products that can replace the imported products. It is taking many initiatives to develop the tourism sector and increase its GDP contribution to 6 per cent by 2020