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