The Sultanate of Oman's decision this week allowing foreign investors with a First-Class Residency Card to buy property in the country will spur local real estate and ancillary businesses connected to it and, thereby, boost the national Gross Domestic Product in fiscal 2022.
The Minister of Housing and Urban Planning Dr Khalfan bin Said al Shueili announced the decision this week. This decision will encourage long-time residents from Asia, Europe and the Americas, living and working in Oman, to buy property.
The wise leadership of His Majesty Sultan Haitham bin Tarik has decreed many such decisions, pre and post pandemic, that will add further impetus to the Sultanate’s economy this year onwards.
Opening the real estate in specific zones to residents is a pioneering step. It will boost the country’s economy. This decision also bodes well for revenue growth, projected in the Omani 2022 budget at RO 10.6 billion, per Royal Decree 1/2022 issued on January 1.
The expected spurt of transactions in real estate will catalyse growth in ancillary fields such as steel, cement, glazed titles, copper, aluminium, glass, electrical fixtures and gadgets.
The decision is praiseworthy. It gives a person, who is not Omani and has a valid First-Class Residence Card, the right to own or transfer to others one property for residential, commercial or industrial use. The decision sets a new benchmark in the GCC.
This decision will increase inward bound tourists because growth in real estate catalyses growth in other fields as well. The Sultanate of Oman will see more inward bound tourism. Aviation data supports this view. The International Air Transport Association (IATA) expects overall passenger movement to reach 4.0 billion in 2024. This figure counts multi-sector connecting trips as one passenger. This exceeds pre-Covid-19 levels (103 per cent of the 2019 total).
The aviation body expects passenger movement to/from/within the Middle East to reach 81 per cent of 2019 levels in 2022, 98 per cent in 2024 and 105 per cent in 2025.
Expectations for the shape of the near-term recovery have shifted slightly, reflecting the evolution of government-imposed travel restrictions in some markets. The overall picture presented in the latest update to IATA’s long-term forecast, however, is unchanged from what was expected in November, prior to the spread of the Omicron variant.
IATA Director General Willie Walsh says, “The trajectory for the recovery in passenger numbers from Covid-19 was not changed by the Omicron variant. People want to travel. And when travel restrictions are lifted, they return to the skies. There is still a long way to go to reach a normal state of affairs, but the forecast for the evolution in passenger numbers gives good reason to be optimistic.”
Most regional and Asian governments’ post pandemic decisions echo Walsh’s optimism. The Omicron variant wasn’t as lethal as the first wave of Covid-19. The world has taken safety measures as advised by the World Health Organization [WHO] and has adapted to revive their respective economies from the stranglehold of shutdowns.
According to IATA cargo movement data, the global demand this January, measured in cargo tonne-kilometres (CTKs), was up 2.7 per cent compared to January 2021 (3.2 per cent for international operations). This was significantly lower than the 9.3 per cent growth seen in December 2021 (1 per cent for international operations).
Capacity was 11.4 per cent above January 2021 (10.8 per cent for international operations). While this is in positive territory, compared to pre-Covid-19 levels, capacity remains constrained, 8.9 per cent below January 2019 levels. This indicates cargo shipments figures are likely go up in the short-term.
As per the 2019 Tourism Statistics Bulletin from the National Centre for Statistics and Information (NCSI), the Sultanate of Oman attracted around 4.1 million visitors, an increase from 3.1 million in 2017. This figure too will rise in the coming months as travel and cargo movement pick up pace.
The IATA data and Oman’s slew of recent decisions to propel the economy to pre-pandemic era state augur well for regional business and trade.
[Sudeep Sonawane, an India-based journalist, has worked in five countries in the Middle East and Asia. Email: sudeep.sonawane@gmail.com]
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