Forbes Middle East
Trade and logistics
Oman’s Vision 2040, on the economic front, focuses on creating a favorable environment to attract talent in the labor market, build a competitive business climate, and achieve comprehensive regional development through decentralization.
These broad economic goals will be achieved through the optimal and balanced use of land and natural resources and the protection of the environment to bring about food, water and energy security, as well as providing good infrastructure to smart and sustainable cities with advanced IT infrastructure.
In order to achieve these goals, the sultanate will need stable economic leadership and management. The main role the country’s leadership will play is to set and align the fiscal, monetary, trade, investment, industrial and labor market policies in such a manner so as to contribute to the development and implementation of economic plans, programs and projects in line with the strategic directions.
The national priorities will constitute a framework for leadership, building on the sultanate’s comparative advantages, and its aspiration to build a competitive knowledge-based economy and keep abreast of economic and technical developments.
The vision aims to reinforce upstream and downstream integration among economic sectors to expand the production and export base, diversify trading partners, deepen investment in high value-added sectors, and enhance the contribution of non-oil sectors to GDP.
Achieving this diversity and integration highly depends on developing local capabilities in innovation and creativity, promoting entrepreneurship, along with preparing fertile ground for legislation and incentives. The competitiveness of the Omani economy will, therefore, increase both regionally and globally, and growth rates will improve and stabilize in a sustainable manner.
In order to achieve their economic goals, a few sectors will be of greater importance where the country has an immense opportunity to grow.
Logistics and trade is one of the most important strategic industries for the future of Oman, and the government has invested a lot on infrastructure to fulfil Oman’s ambition to reclaim its 2,000-year-old regional trade leadership.
Oman is strategically located in the Arabian Gulf and is centrally located between Asia and the Middle East. Recently the sultanate has been developing its logistics infrastructure and is slowly becoming a bigger player in regional and global trade. Political neutrality and good relations with regional as well as global powers is another advantage when it comes to trade and logistics. Oman is the only GCC country to have diplomatic relations with all countries in the Middle East.
When it comes to trade, Oman had total exports worth $41.8 billion and total imports worth $25.8 billion in 2019, leading to a positive trade balance of $16 billion. Oman’s exports of goods and services account for 58.2% of GDP. The top export items are petroleum and natural gas, contributing a combined $28.9 billion to the country’s exports. Petroleum products were also the biggest import, with automobiles, communication infrastructure, iron ore and Semi-fin products making up the top five.
The U.A.E. is Oman’s biggest trading partner for both exports and imports. Traditionally, the U.A.E.’s ports have served as the main trading points for Oman given the proximity of the two countries and a developed road network between the two countries.
Currently logistics and transportation contribute just $2.8 billion or 3.7% to the economy. That number is low considering the country’s geographical and diplomatic advantages. One of the reasons for the low share of logistics to the industry could be a lack of port infrastructure.