The Sultanate of Oman — like most countries of the world — has adopted economic stimulus packages with the aim of overcoming the economic repercussions resulting from the Covid-19 pandemic, which negatively affected the supply and demand sides of the economy.
This was stated by Qais bin Mohammad al Yousef, Minister of Commerce, Industry and Investment Promotion, at the thirteenth regular session of the third annual session of the ninth term of the Majlis Ash'shura on Sunday.
He said that the ministry is working in cooperation and integration with various units of the state's administrative apparatus to develop packages of facilities, incentives, and procedures to raise the contribution of sectors related to the ministry.
The ministry is working to continue the efforts with its partners in the government and the private sector to achieve greater successes during the next stage in the field of developing national industries, raising the level of internal and external trade, and improving business environment to attract local and foreign investments to achieve sustainable development in the Sultanate of Oman.
Al Yousef stated that the incentives include attracting foreign investments, improving operating levels, such as incentives to improve the business and investment environment, in terms of stimulating the overall supply, most notably — allowing business, commercial and investment activities to by obtaining initial licence without waiting for the final permit, treatment of foreign investment companies is the same as that of national companies with regard to the commercial registration fee, granting residency to foreign investors according to certain controls, in addition to the incentives of the labour and employment market, the most important of which are reduction in licence fee for recruitment of expatriate workers, and renewing the work permit.
ECONOMIC GROWTH
“It is expected that the application of such measures will lead to an increase in production, thus an increase in supply, which will have a positive impact on economic growth and employment'', he added.
With regard to the contribution of the trade sector, the minister said that the contribution of domestic trade to the GDP of most commercial economic activities including wholesale and retail trade activity (at current prices) increased by 8.60 per cent and stood at about RO 2.847 billion by the end of December 2021, while it amounted to about RO 2.464 billion during the same period in 2020.
The contribution of service activities to the GDP also increased by 50.20 per cent, reaching about RO 16.571 billion until the end of December 2021, compared to about RO 15.563 billion during the same period of 2020.
The contribution of wholesale and retail trade also amounted to about 8.60 per cent because of the gradual opening of the service activities sectors after vaccinating a large segment of citizens and residents and the receding of the repercussions of the pandemic.
TRADE EXCHANGE
With regard to the trade exchange, the minister said that total trade exchange of the Sultanate of Oman with the countries of the world increased to about RO 28.986 billion until the end of 2021, registering an increase of 47.1 per cent.
The number of commercial records registered with the ministry increased by 7.54 per cent, as they reached 349,894 records until the end of December 2021, while the number in the same period of the year 2020 reached 325,369 records.
The total transactions completed through the “Invest Easy” platform reached about 789,493 in 2021, with an increase in transactions of 39.03 per cent compared to 2020.
With regard to e-commerce, Al Yousef stressed that the ministry has observed that global commerce is moving towards electronic trade, which explains the reasons for the high percentage of its contribution in general and the shortage of shops.
“For that, the ministry has allocated, within its administrative division, a special department concerned with implementing and regulating the e-commerce plan in a manner that preserves the rights of the merchant and consumer. The indicators show a clear recovery in the commercial records; this is an indication of the return to normal life, and these statistics confirm that we have begun the stage of recovery and economic growth and we look to the future with optimism'', he added.
INDUSTRIAL SECTOR
On performance of the industrial sector during the beginning of the Tenth Five-Year Plan, the contribution of the manufacturing sector to the GDP until December 2021 was 9.70 per cent, with a total of RO 3.195 billion, while the growth rate of industrial activities was about 13.6 per cent by the end of December of 2021. The manufacturing sector — which is one of the sectors of non-oil economic diversification — recorded a high growth rate during this period, amounting to about 9.70 per cent.
According to the statement of the minister, the reasons for the rise in the industrial sector’s contribution can be attributed to the increase in domestic demand for petroleum derivatives from refineries (gasoline, diesel and others) as a result of lifting the ban and recovering from the pandemic, and the rise in the prices of petrochemicals, fertilisers, iron and aluminium in international prices due to the recovery from the pandemic (Covid-19).
The General Directorate of Industry periodically implements industrial surveys which are an essential part of an integrated system of national industrial statistics, as they provide information about establishments and their activities, and collects data on all operating and licensed industrial establishments in the Sultanate of Oman.
“In 2020 (January-December), the manufacturing sector contributed an added value of RO 2.27 billion to the economy, representing about 8 per cent of the gross domestic product of RO 28.44 billion in the same year according to NCSI. In 2021 (January-December), the manufacturing sector contributed an added value of RO 3.2 billion to the economy, representing about 9.7 per cent of the GDP of RO 33 billion in the same year. Comparing the full-year statistics for 2020 and 2021, it can be seen that the contribution of the manufacturing sector to the GDP has grown from 8 per cent to 9.7 per cent. Yet, by comparing the years 2020 and 2021, it can be seen that non-oil goods grew from RO 3.03 billion to RO 5.79 billion, while total merchandise exports grew from RO 11.73 billion to RO 17.06 billion'', the minister added.
As for the investment sector, the volume of foreign direct investments in the Sultanate of Oman amounted to about RO 8.079 billion in 2019, while it amounted to RO 15.861 billion in 2020, with a growth rate of 18.4 per cent during the Ninth Five-Year Plan.
The volume of foreign direct investments in the Sultanate of Oman amounted to RO 16.43 billion in the third quarter of 2021, an increase of RO 876 million over the same period last year.
The oil and gas sector contributed 67.8 per cent of the total foreign direct investment, followed by the manufacturing sector with 9.2 per cent, then the financial intermediation sector with 8.8 per cent. The real estate, rental and commercial project activities sector contributed with 7.1 per cent, while other sectors 7.1 per cent.
In order to promote investments in the industrial sector and create ready-made investment opportunities, the Ministry of Commerce, Industry and Investment Promotion launched the initiative of 100 industrial investment opportunities, which included the first batch of 50 opportunities in 2021. The second batch, however, included (22) industrial opportunities in 2022. This batch was characterised by the existence of prior purchase contracts in coordination with partners in the private sector — the Petroleum Development Oman, Nama Holding Group and Mazoon Dairy Company.
“Work is in progress to launch 28 investment opportunities for different activities with the aim of finding investment opportunities in the industrial sector and presenting them to investors'', the minister said.
He also added that the most prominent efforts of the ministry during the last period were laying out a solid structure of legislation stimulating the business environment in harmony with the various authorities, the success of digital transformation facilitation of services, where of 88 per cent of licenses were converted to automatic licenses, reviewing and reducing the price of government services, in which the reduction rate has reached more than 90 per cent, providing incentives that limited the effects of the pandemic and preparing an integrated system for investment based on international best practices.
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