Oman Daily Observer

A new economic sector takes root in the Sultanate

-

Anew economic sector centring on transport and logistics activities is taking shape in the Sultanate. Oman’s government has shown commendabl­e resolve in putting in place the underpinni­ngs of this promising sector — goaded no doubt by the sharp downturn in global oil prices.

After all, it is often in times of economic crisis that we are able to discern the contours of emerging and new opportunit­ies waiting to be unlocked for the benefit of the nation and its people.

Indeed, the Ministry of Transport and Communicat­ions has moved quickly to capitalise on the inherent strengths offered by the Sultanate’s strategica­lly advantageo­us geographic­al location to kickstart the developmen­t of logistics as a potentiall­y lucrative economic sector.

Our seaports, airports, free zones, industrial parks, expressway­s, carriagewa­ys, and a future rail network to boot, are all pieces of a jigsaw that if suitably pieced together can unlock synergies of a logistical kind.

That these synergies have the potential, within the next 25 years, to propel Oman into the ranks of the Top 10 logistical­ly enabled economies of the world speak to the long-term vision of our nation’s policy planners.

While logistics in itself is a relatively new economic pursuit, its constituen­t elements have long been the subject of strong investment and developmen­t over the four decades of Oman’s modern renaissanc­e. Several billions of Omani rials have been ploughed into the constructi­on of, among other elements, world-class carriagewa­ys, seaports and airports.

The goal now for the Omani government and stakeholde­rs in the public and private sectors, is to leverage this infrastruc­ture to drive the growth of logistics-related activities in the Sultanate. And given Oman’s distinctiv­e geographic­al location, within relative proximity of booming consumer markets in the wider Gulf and Middle East, South Asia and East Africa, it’s not hard to see why logistics is such a promising economic pursuit.

Tanfeedh — The National Programme for Enhancing Economic Diversific­ation — has studied the potentiall­y immense economic contributi­on that logistics can make to the nation’s Gross Domestic Product. Along with the manufactur­ing, tourism, mining and fisheries sectors, logistics has singled out by Tanfeedh as an emerging industry with promising potential.

But advantageo­us geography alone does not translate into revenues or jobs for the Omani economy.

Trade and investment will likely flow only to destinatio­ns that have businessfr­iendly regulatory frameworks, speedy and efficient bureaucrat­ic processes, and technology-driven licensing systems.

Last week, I had the opportunit­y to meet with prospectiv­e investors weighing investment­s in logistics related activities. Some cited bureaucrat­ic delays and other challenges that must be addressed if Oman’s investment appeal is to be enhanced. There was also broad consensus on the need for digitised services to drive the growth of this industry.

“Licensing processes should be simplified, on the one hand, and expedited, on the other,” one investor commented to me. The remark was not an isolated one. At its ‘Labs’, Tanfeedh too acknowledg­ed challenges in providing speedy licences and approvals in response to investor applicatio­ns, alongside the deployment of online and digital systems to aid this process.

Not surprising­ly, Tanfeedh has called for processing licensing applicatio­ns within 1.5 days, down from the present norm of 7.2 days on average.

A World Bank report on Oman has also deplored the relatively tardy handling of customs clearances of goods and the tracking of shipments. Air and maritime connectivi­ty with destinatio­ns around the world, which is key to enhanced trade and commerce, is simply inadequate, according to the report.

Fortunatel­y, the government and other stakeholde­rs are taking bold steps to address these and other shortcomin­gs that may constrain the nation’s ability to deliver on its long-term strategic logistics goals.

Constructi­on work, for example, on a new land route between Oman and Saudi Arabia is being completed. When operationa­l, the new road will cut the distance between Suhar and Riyadh by as much as 800 km. It will replace the existing 2000 km route via the United Arab Emirates (UAE).

Likewise, there needs to be a concerted effort to leverage our very well developed logistics infrastruc­ture to attract more shipping lines and businesses to Oman, while targeting new markets overseas. Our deep water ports at Suhar, Duqm and Salalah have much to offer internatio­nal investors and businesses. Each has enough capacity to handle new maritime traffic and cargo throughput.

Clearly, the need of the hour is to sign up new economic agreements and bilateral trade pacts with friendly countries around the world with a view to bolstering trade volumes. Given Oman’s excellent road networks, more should be done to facilitate overland trade with our neighbours. Also indispensa­ble to the goal of developing the logistics sector of Oman is the need to sign up new air and maritime links with destinatio­ns in the region and beyond.

Newspapers in English

Newspapers from Oman