As with many countries, the industrial sector of Oman has important benefits as well as plays a key role in the growth and development of the economy. To the end, the government has made significant progress in building the strong industrial base of the Sultanate of Oman. Internally, industries create new jobs, earn foreign exchange, stimulate investment and innovation, and contributes to the nationality of the country. This article discusses the development of the Omani industry economy and the local economy including its role in economic diversification, employment creation, foreign investment, and development sustainability.
ECONOMIC DIVERSIFICATION AND INDUSTRIAL GROWTH
Expanding the economy is one of the critical areas of focus on the strategic plan of Oman Vision 2040. Rotary diversification comes hand in hand with the expansion of oil revenues, therefore, the government is also targeting sectoral industrialization for expansion of manufacturing, petrochemical, mining and logistics. Additionally, the industrial growth results economic contributions in output in the form of increase in GDP. It also strengthens the national economy competitive resilience to oil price volatility.
There is a wide range of consumables which the Omani industry is engaged in and one of such major sub sectors is manufacturing. It includes production of steel, cement, food items, chemicals, etc. The manufacturing sector has grown as a result of the establishment of export processing zones such as Sohar Industrial City, Rusayl Industrial City, and Salalah Free Zone, which have increased exports and reduced imports.
Oman has managed to develop a dynamic petrochemical industry by utilizing the natural resources of the country. The main players in developing this particular industrial sector are the Sohar Refinery and Duqm Refinery, which refine crude oil into usable products, like plastics, fertilizers, and synthetic materials. These industries allow for increased exports while also assisting in the growth of other related industries, which strengthens the trade balance.
EMPLOYMENT CREATION AND WORKFORCE DEVELOPMENT
The industrial sector is a great contributor to job growth and provides numerous direct and even more indirect employment opportunities. While encouraging the growth of industries, the government’s Omanisation strategy is putting measures to increase employment of locals while reducing strain of expat labour.
Oman has put more effort in creating training centers and technical institutes both for the support of the growing industrial workforce and for the Omani people to acquire these skills. The collaboration between industries and educational institutions assists in ameliorating the skill set for the employment opportunities that await in the field of manufacturing, engineering and logistics.
ENCOURAGEMENT OF FOREIGN INVESTMENT
Investment from foreign countries presents numerous opportunities for Oman. Hence, Oman is also focusing on attracting foreign direct investment (FDI) in the industrial sector. Similarly, Oman has added economic zones and free trade agreements which serve as an attraction for foreign investment businesses to open operations in Oman for the benefit of the economy and transfer of technology.
Duqm Special Economic Zone (SEZAD) and Salalah Free Zone are some of the important economic areas that offer tax breaks along with help in infrastructure and basic rules regarding doing business in Oman. These areas are meant to be industrial centers to encourage trade and manufacturing for better exports and job opportunities.
With the right import and export policies in place, Oman can improve its trade balance. In view of the need to strengthen the economy, Oman will focus on their industrial exports which include petrochemicals, aluminum, steel and food products. With the increase in available manufactured goods for sale in international markets, Oman can competitively become involved in trade and gain a strong position globally.
As industries grow, sustainability is prioritized. Oman’s policies seek to promote industries that are environmentally friendly, strive to lessen carbon footprints, and make resources more efficient. Renewable energy projects, as well as green manufacturing, are vital for ensuring that industrial development is not at the expense of the natural environment.
OTHER GREEN INDUSTRIAL INITIATIVES
- Solar and Wind Energy: An increasing number of industrial projects use renewable energy to lessen the dependence on fossil fuel.
- Waste Management: The government supports initiatives that reduce wastes in manufacturing industries.
- Water Conservation: Industries employ water saving devices to make better use of the available resources.
PROBLEMS CONFRONTING OMANI INDUSTRY
There has been notable development made, however, there are problems facing the industrial sector such as:
- Global competition: Omani goods contend with foreign companies in selling them abroad.
- High production costs: The cost of energy and raw materials are major determinants of competitiveness.
- Regulatory complexities: Further reduction of industrial regulations will make it easier to do business.
- Shortage of skilled labor: It is necessary for the sector to continuously invest in vocational training.
The future of Omani industry is encouraging backed by investment in industrial zones, new technologies and policy reforms. Industry transformation in Oman is to be enhanced by emphasis on digital technology, automations, and sustainable development.
The Omani industry plays a critical role in the composition of the national economy, boosting diversification, employment opportunities and foreign investment. The industrial expansion and new creation innovations put Oman in a good position for long-term economic growth and world competitiveness. Further efforts in supporting industrial development will help position this sector as a major contributor to the economic growth in the future.
A specialist in local content/In-country value, the writer is the Acting Director-General of Local Content, previously assigned to the General Secretariat of the Tender Board.
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