The 10th Five-Year Plan covering the 2021-2025 timeframe was unveiled by the Ministry of Economy on Friday, envisioning a strategy to sustain economic growth in line with the principles set out in the government’s plan for achieving fiscal balance.
The 10th Five-Year Plan aims to achieve a real growth rate of the GDP of not less than 3.5 per cent on average during the years of the plan, and to achieve a growth rate of GDP at current prices by an average of 5.5 per cent during the years of the plan, and to increase the rate of investment to reach 27 per cent of GDP.
Statement of the Ministry of Economy on the occasion of the promulgation of a Royal Decree ratifying the 10th Five-Year Plan 2021-2025:
With the issuance of Royal Decree 1/2021, the 10th Five-Year Plan, which is the first operational plan for the future Oman Vision 2040, is launched, guided by the generous care and wise guidance of His Majesty Sultan Haitham bin Tarik, to begin a new phase, making a qualitative shift in the development process in the Sultanate.
This plan reflects the sublime trends of His Majesty the Sultan which were mentioned in the historic speech of His Majesty on February 23, 2020, during which he emphasised the most important pillars of national work during the coming period, starting with the restructuring of the state’s administrative apparatus and strengthening the trend towards integrating youth, expanding opportunities for their contribution to development efforts and empowering women in various fields, stressing the importance of achieving Oman Vision 2040, and the need to develop legislation and laws in line with the requirements of the current and future stage, which will contribute to moving the wheel of sustainable and comprehensive development.
Oman Vision 2040 and five-year plans
Like any long-term strategy, it should be accompanied by medium-term plans that define priority goals and the programmes needed to achieve them, accompanied by indicators to measure performance within an integrated system of monitoring and evaluation.
The 10th Five-Year Plan marks the beginning of the launch of Oman Vision 2040, which is based on four main pillars incorporating 14 national priorities, 88 strategic goals and 68 indicators to measure performance. The first pillar deals with “a creative human being community”, education, learning, scientific research, national capabilities, health, citizenship, identity, national heritage and culture, welfare and social protection, and youth development. The second pillar includes “a competitive economy,” economic leadership and management, economic diversification, financial sustainability, the labour market and employment, the private sector and investment, international cooperation, governorate development, sustainable cities and information technology.
The third pillar is themed on “Environment: Its Resources Is Sustainable”, encompassing all aspects of the environment and natural resources, while the fourth pillar is focused on the theme, ‘A State with Responsible Bodies’, which deals with issues of legislation, the judiciary, oversight, governance of the state’s administrative apparatus, resources and projects.
Exceptional circumstances and challenges
The preparation of the 10th Five-Year Plan came in exceptional and unfavourable circumstances, represented by the drop in oil prices, and the negative impact that resulted from it on human development, the entry of the global economy into a state of recession, the high ratio of public debt to GDP, the consequent decline in credit rating and the increase in borrowing costs, in addition to the modest contribution of the private sector to economic activity, and ending with the COVID-19 pandemic.
Nevertheless, the plan seeks to formulate ambitious, clear and specific national goals linked to time-based implementation programmes, seeking to restore the momentum of economic growth, accelerate the pace of economic activities, and achieve balanced economic and social development, through the implementation of the proposed programmes, initiatives and projects, within an integrated time and organisational framework.
Methodology of preparation
In the early stages of preparing this plan, what was previously accomplished was evaluated, and the strategies, plans and research developed by state institutions in various sectors were used. The base of participation was expanded, and specialised committees and work teams were formed, which included experts and specialists in the various fields covered by the plan. The current economic conditions and the actual financial performance of the previous five-year plan were taken into account when preparing the plan estimates.
From December 2019 to date, 195 workshops and technical meetings were held, with more than 1,900 participants, during which the current situation and existing challenges were reviewed. Based on the strategic directions of Oman Vision 2040, the 10th Five-Year Plan has identified priority national goals, which will shape the features of development during the next five years, and set strategic goals, practical programmes to achieve them, and tools through which to follow up and evaluate the results being achieved in terms of various projects.
Objectives of the
10th five-year plan
The plan seeks to achieve many priority economic and social goals, which are primarily concerned with stimulating economic activity, developing the macroeconomic environment, raising the efficiency of public financial management, achieving balance between measures to control and rationalise public spending, especially current ones, and adopting disciplined expansionary financial policies. Achieving sustainable growth rates, the plan seeks to develop the necessary infrastructure to stimulate private investment, accelerate the pace of implementation of major strategic projects and partnership projects between the public and private sectors, and attract more foreign direct investment, while building on expectations for oil prices at an average of $48 per barrel during the years of the plan.
Sectors
The plan focuses on economic diversification mechanisms and programmes and increasing the contribution of non-oil sectors and activities. The plan sets a target for an average annual growth rate of approximately 3.2 per cent in the gross domestic product of non-oil activities, by focusing on promising economic sectors represented in the manufacturing industries with high technological content, agriculture and fisheries, fish farming, agricultural and food processing, transport, storage and logistics. It also aims at increasing the private sector’s contribution to economic sectors with high local added value, completing value chains, production and supply, and stimulating the contribution of small and medium enterprises, by strengthening their link with large enterprises and by encouraging their contribution to innovation activities, knowledge economy, applications of the 4th Industrial Revolution, and artificial intelligence. Niche markets, venture capital, and a focus on providing decent and productive job opportunities for Omani youth, especially in the field of entrepreneurship.
The plan greatly supports preserving human capital, reducing the repercussions of the COVID-19 pandemic, continuing efforts to develop the health system and the pharmaceutical sector, encouraging the private sector’s contribution to the field of advanced, high-quality health services, and paving the way for the development of a comprehensive health insurance system. The plan also aims to develop the pre-university and university education system to raise the competitiveness of education graduates in the local and global market. The plan also lays the foundations for a shift towards administrative, economic and financial decentralisation, and support for the local economy.
The plan includes a set of programmes aimed at preserving the environment and achieving environmental sustainability. The plan also includes sectors and programmes concerned with the circular economy, green and blue economy that seek to raise the efficiency of the use of depleted resources, increase the contribution of clean and renewable energy to economic activity, and optimal utilisation of resources.
OBJECTIVES
The 10th Five-Year Plan aims to achieve a real growth rate of the GDP of not less than 3.5 per cent on average during the years of the plan, and to achieve a growth rate of GDP at current prices by an average of 5.5 per cent during the years of the plan, and to increase the rate of investment to reach 27 per cent of GDP at an average level, and work to raise the efficiency of investment, and to attract more foreign direct investment in the oil and non-oil sectors to reach 10 per cent of the GDP by the end of the plan, and to increase the contribution of the private sector in investment to reach 60 per cent on average, in addition to achieving a real growth rate of non-oil activities estimated at 3.2 per cent on average.
Operating challenge
The employment of the national workforce is one of the most important economic and social challenges, and although the rates of performance in the national economy ensure the provision of sufficient job opportunities, the labour market has not been able to absorb and employ the increasing numbers. To address this challenge and correct labour market imbalances, the 10th Five-Year Plan adopted policies that contribute to changing the composition of work from its current situation, which is based on a broad base of unskilled workers to a new structure based on a broad base of qualified workers, in accordance with policies to attract skilled workers and grant them incentives, encouraging new investments based on the knowledge economy, while developing the education system, providing a skilled local workforce, and raising women’s participation in the labour market. Therefore, the 10th Five-Year Plan comes as the first plan to achieve Oman Vision 2040, and is consistent with its strategic objectives.
Monitoring performance
The realisation of the goals, programmes and plans contained in the plan depends on the cooperation and solidarity of everyone, including governmental and private institutions, civil society institutions, media institutions and individuals. The Ministry of Economy aims to follow up the implementation of the 10th Five-Year Plan, evaluate its results periodically, prepare periodic monitoring and evaluation reports, publish and submit them to the relevant stakeholders based on a set of smart performance measurement indicators so that the implementation of programmes and their effects are monitored over the next five years within an institutional and organisational framework qualified for follow-up and evaluation, represented by the Vision Implementation Follow-up Unit, and a unified electronic platform for performance measurement indicators in cooperation with the relevant stakeholders.
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