Nearly half of busi­ness ex­ec­u­tives in Oman pos­i­tive for next 12 months

Muscat Daily - - FRONT PAGE - Our Cor­re­spon­dent

Al­most half (47 per cent) of busi­ness ex­ec­u­tives in Oman have said that lo­cal busi­ness con­di­tions are pos­i­tive or very pos­i­tive in the com­ing 12 months, ac­cord­ing to a survey.

It was con­ducted by the global re­search and ad­vi­sory firm Ox­ford Busi­ness Group (OBG).

It asked around 100 C-suite ex­ec­u­tives from across the sul­tanate’s in­dus­tries a se­ries of wide-rang­ing questions on a face-to-face ba­sis aimed at gaug­ing busi­ness sen­ti­ment.

Low growth fore­casts for the current year weighed some­what on sen­ti­ment among ex­ec­u­tives in­ter­viewed for the 2019 edi­tion of the ‘Busi­ness Barom­e­ter: Oman CEO’ survey car­ried out by OBG. A larger sec­tion of busi­nesses re­mained up­beat about the sul­tanate’s prospects, re­flect­ing the much more promis­ing out­look than both the World Bank and IMF have in­di­cated for 2020.

OBG, how­ever, said that pos­i­tiv­ity is down from 80 per cent found in its De­cem­ber 2018 survey.

Con­sid­er­ably more busi­ness lead­ers re­sponded favourably to Oman’s current tax en­vi­ron­ment (busi­ness and per­sonal), how­ever, with 74 per cent de­scrib­ing it as com­pet­i­tive or very com­pet­i­tive on a global scale.

On a sep­a­rate is­sue, more than one third (35 per cent) of those in­ter­viewed de­scribed Oman’s efforts to im­prove the ease of do­ing busi­ness as good, sug­gest­ing that the Royal De­crees is­sued in July ap­prov­ing new laws on for­eign cap­i­tal in­vest­ment, pri­vati­sa­tion, bank­ruptcy and pub­lic-pri­vate part­ner­ships will be wel­comed by the broader busi­ness com­mu­nity.

In a sign that busi­ness lead­ers in Oman are strug­gling with the ex­ten­sion of a ban on re­cruit­ing for­eign­ers for key roles, 59 per cent of those sur­veyed cited re­forms to labour laws, as they felt that the leg­isla­tive changes would be most ef­fec­tive in pro­mot­ing eco­nomic growth.

Leadership (35 per cent) and en­gi­neer­ing (22 per cent) ranked first and sec­ond re­spec­tively as the skills ex­ec­u­tives thought were most needed to sup­port growth, in an­other indi­ca­tion of the chal­lenges re­cruiters face stem­ming from the coun­try’s Oman­i­sa­tion quota and a long­stand­ing pref­er­ence among locals for work­ing in the pub­lic sec­tor.

Re­gional po­lit­i­cal volatil­ity re­mains the top ex­ter­nal event that in­ter­vie­wees be­lieve could im­pact the lo­cal econ­omy in the short to medium term be­yond the move­ments in com­mod­ity prices, cho­sen by 64 per cent of in­ter­vie­wees, although there were also signs of the grow­ing im­pact that China is hav­ing on the lo­cal econ­omy.

De­mand in growth from the Asian gi­ant was the re­sponse given by 12 per cent of ex­ec­u­tives to this ques­tion, ahead of pro­tec­tion­ism in trade (ten per cent).

Com­ment­ing in his blog, Billy Fitz Her­bert, OBG’s re­gional ed­i­tor for the Mid­dle East, said that while Oman, and the re­gion as a whole, are still re­cov­er­ing from the crash in oil prices five years ago, there are sev­eral bright spots to draw on.

“The im­po­si­tion of fis­cal re­forms in the shape of the so-called sin tax that came into ef­fect in June and the value-added tax, which is now likely to be im­ple­mented in 2020, bode well for govern­ment efforts to broaden rev­enue streams, and feed into the govern­ment’s wider goals of eco­nomic sus­tain­abil­ity and a re­duced re­liance on hy­dro­car­bons rev­enues.”

Fitz Her­bert said ex­ec­u­tives’ recog­ni­tion of China’s grow­ing role in Oman’s de­vel­op­ment re­flected broader eco­nomic ac­tiv­ity, most notably the in­vest­ments be­ing made by the Asian pow­er­house un­der its Belt and Road Ini­tia­tive.

Turn­ing to busi­ness lead­ers’ ev­i­dent frus­tra­tion at some of the coun­try’s labour laws, he ac­knowl­edged that the chal­lenge presented both eco­nomic and so­cial con­sid­er­a­tions. “The au­thor­i­ties are well aware of the need to bet­ter align pub­lic sec­tor com­pen­sa­tion with that of the pri­vate sec­tor if this ten­dency is to be suc­cess­fully curbed,” he said.

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