MUSCAT, MARCH 26
The Sultanate of Oman is ranked sixth in MENA region in the 2023 Economic Freedom Index published by the Heritage Foundation, Washington’s No.1 think-tank.
“Economic freedom is the fundamental right of every human to control his or her own labour and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please.
In economically free societies, governments allow labour, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself,” the Index noted.
The Index measures economic freedom based on 12 quantitative and qualitative factors, grouped into four broad categories, or pillars, of economic freedom: (1) Rule of law (property rights, government integrity, judicial effectiveness); (2) Government size (government spending, tax burden, fiscal health); (3) Regulatory efficiency (business freedom, labour freedom, monetary freedom); and (4) Open markets (trade freedom, investment freedom, financial freedom).
According to the report, the degree of economic freedom in Oman reached 58.5 points out of 100. Oman’s 2023 score improved by 1.9 points compared to last year. Oman is ranked sixth out of the 14 countries in the Middle East and North Africa region.
The top 5 in the MENA region include UAE, Israel, Qatar, Bahrain and Jordan. Oman’s overall score results are above the global and regional average.
The report explained that Oman’s economy is being modernised and the rule of law is relatively well maintained. Recognising the importance of a dynamic entrepreneurial environment, the government of Oman is trying to diversify the economy.
The Index says that the overall rule of law in Oman is relatively well respected. The country’s property rights score is above the world average; its judicial effectiveness score is below the world average; and its government integrity score is above the world average.
The top individual and corporate tax rates are, respectively, 0% and 15%. The tax burden is equal to 3.4% of GDP. Three-year government spending and budget balance averages are, respectively, 40.5% and –8.1% of GDP. Public debt equals 62.9% of GDP.
Oman’s regulatory environment is still evolving. The labour laws enforce the ‘Omanisation’ policy that requires private-sector firms to meet quotas for hiring native Omani workers. The state influences prices through an extensive subsidy system. The most recent available inflation rate is 1.93% as of February 2023, according to the National Centre for Statistics and Information.
Oman’s open trade-weighted average tariff rate is 4.4%. Efforts to increase transparency and streamline the investment framework are ongoing. Most credit is offered at market rates, but the government uses subsidised loans to promote investment. The Muscat Securities Market is open to foreign investors, the Index noted.
Globally, Singapore, Switzerland and Ireland topped the 2023 Index of Economic Freedom, followed by Taiwan, New Zealand and Estonia in the fourth, fifth and sixth positions respectively. They are followed by Luxembourg, the Netherlands and Denmark in the seventh, eighth and ninth positions respectively, and then Sweden, Finland and Norway in the 10th, 11th and 12th positions respectively.
As for the least economically free countries for the year 2023, North Korea bottomed the list at 176, preceded by Cuba (175), Venezuela (174), Sudan (173), Zimbabwe (172), Eritrea (171), Burundi (170), Iran (169), and Algeria (168).