The merger of Oman Oil Company and Orpic is seen as the best example to try to consolidate debts of government run companies by ramping up efficiency and cut down financial wastes.
However, Oman really needs to explore new markets and foreign partnerships to pull in much needed investments.
Since the early 1990s, Oman has been considering a variety of ways of privatising its government organisations but its success has not been encouraging.
The main reason is that the Sultanate is not considered as the major oil producer or a solid base for manufacturing. It is not clear whether the merger of Oman Oil Co and Orpic would lead to privatisation or not but the petrochemical industry in the country needs special attention during the period of low oil prices.
But even if the petrochemical industry in Oman decides to sell off its business to the private sector, the country would still need to find investors who are willing to own a part of it in a period which oil and gas profitability is at odds against rising production costs. For the record, Oman ranks the world’s twenty-first in daily oil production at around 950,000 barrels per day.
Oman needs to promote itself on a different light to attract investments but away from its core business of petrochemical. The country is increasingly making new grounds establishing itself as the most politically stable country in the Arab world.
Oman has already defined its domestic governance and foreign policy, which has placed the country at the centre of regional and global security issues.
Over the last decade, Oman has tried to integrate into the international economy, seeking to take advantage of its strategic geographic position where it is aiming to launch itself as an increasingly important business centre.
However, top executives both in the public and private sector, have so far failed to capitalise on this success. They are falling behind the government’s efforts and targets to propel Oman as a major contender in the international businesses. They need to compete more aggressively in the foreign market.
Historically, Oman has been a major seafaring nation. The government has invested heavily in building world-class ports in Suhar, Duqm and Salalah to follow that tradition.
That geospatial effort highlights Oman’s past to link traders from Asia to Europe along the ancient Maritime Silk Road, which the seafarers of the past have championed and made Oman a flourishing trading nation.
To emulate the past trading successes, Oman needs to look deeper in its assets other than oil and ask itself questions what areas foreign investors would be interested in. One area that is growing very steadily is the power generation sector.
State-owned Oman Electricity Transmission and Muscat Electricity Distribution, are the two main contenders.
The two organisations have a combined worth of $3.2 billion. The sell-off of these companies, would not only raise billions of dollars for the government but would also save billions more in running costs.
The second area that might turn the heads of international investors is mining. The combined minerals, such as copper, diamonds, iron, platinum and zinc, is worth over $150 billion, according to a recent survey. This sector is currently in firm control of the government.
However, authorities need to restructure its business outlook to make it attractive to foreign investors.
The third and fourth, which have been mainly overlooked, are the agriculture and fishing industries. Before 1970, the two areas provided over 90 per cent of the livelihoods of ordinary Omanis. They are still the main sources of income to at least 30 per cent of Omanis, thanks to the efforts of the ministry of agriculture and fisheries.
However, agriculture and fisheries sectors can attract a lot of investors if Oman rewrite its investment portfolio by marketing the two sectors more aggressively abroad.
Overall, whether it is electricity, mining, fishing or agriculture, officials need to restructure the assets under their control in a more aggressive way in terms of international marketing.