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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Oman outperforms global counterparts in infrastructure, economic stability: Study

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Oman is in the second quartile globally when it comes to well-being, according to a recently released report by The Boston Consulting Group (BCG), Striking a Balance Between Well-Being and Growth: The 2018 Sustainable Economic Development Assessment. Oman outperforms other GCC countries in the dimensions of economic stability, civil society, governance and environment, but is losing ground across other dimensions, particularly employment and income.


The report found that wealthier countries show higher well-being levels; overall, Oman’s well-being performance is good and improving. The country is on par with the global average when it comes to converting wealth into well-being, and of countries with a similar starting level of well-being, Oman is in the 3rd quartile of change.


The finding runs counter to conventional wisdom that countries must make trade-offs between policies that support economic growth and those that elevate the well-being of their citizens.


The research, based on BCG’s proprietary Sustainable Economic Development Assessment (SEDA), a comprehensive diagnostic tool that assesses the relative well-being of countries, reveals that there is actually a virtuous cycle between well-being and growth in which gains in one power progress in the other.


“BCG has been a strong advocate of the need for countries to focus policies and development strategies on improving well-being,” notes Joao Hrotko, a BCG partner and coauthor of the report. “But there remains a belief that policies aimed at improving well-being may lead to weaker GDP growth. Our analysis finds this tradeoff can be avoided. In fact, an approach that balances both well-being and growth is not just advisable under normal circumstances — it is equally important during times of crisis. In such periods, countries must resist the temptation of pursuing policies that come at the expense of promoting well-being.”


Oman is improving in infrastructure, education, economic stability, governance, and employment. Conversely, the country is good but losing ground in income — it continues to outperform global counterparts in this dimension.


“Oman is a top performer among its GCC peers when it comes to converting wealth into well-being,” said Alexander Tuerpitz, Partner and Managing Director at BCG Middle East. “For countries that already enjoy a relatively high level of well-being, our analysis points to the importance of prioritising education and employment. Progress in these mutually reinforcing areas can better prepare citizens — and therefore society as a whole — for the challenges presented by globalisation and relentless technological change.”


“Oman’s rank is below other GCC countries in the SEDA rankings between 2009 and 2018. However, over the last ten years, the country’s ability to convert wealth into well-being continues to surpass GCC peers, and remains in line with the global average,” said Tuerpitz.


Oman is making stronger progress in economic stability and employment dimensions but lesser progress in income and health. In the last decade, Oman has improved most in the dimensions of employment, infrastructure, and economic stability at 21 points, 18 points and 14 points respectively. To a lesser extent, Oman has also improved in the dimensions of environment at 6 points and civil society at 3 points. However, the country has shown negative growth in income (-9 points), health (-4 points), and equality (-1 point) and governance (-1 point).


The report also examined which areas, or “dimensions”, seemed to be critical to making progress relative to peers — and how the importance of a dimension might differ depending on a country’s level of development.


n Among countries starting with a low level of well-being, the dimensions that differentiated those that made significant improvements in well-being from those that did not were education, infrastructure and governance.


n Among countries with high levels of well-being, the dimensions that differentiated those that made weak improvements in well-being from those that posted good progress were employment and education.


Certainly, there is no blueprint for development and each country’s circumstances require different policy responses. However, these results yield an important insight for policymakers: the dimensions that distinguish countries that performed better are areas that, if overlooked, can become bottlenecks and constrain progress.


The 2018 analysis also assessed the overall direction of absolute well-being around the globe by looking into data for the 40 metrics that make up the SEDA composite measure —finding reason for optimism.


“Looking at the most recent ten-year period it is clear well-being has generally improved around the world,” says Enrique Rueda-Sabater, a senior BCG adviser and co-author of the report. “This is encouraging — particularly given the fact that this period included a major financial crisis that triggered recessions in many countries.”


In particular, there were significant gains in key health outcomes, education and infrastructure from 2007 through 2016. Although trends were less encouraging in governance and environment, overall most countries showed improvement in a majority of SEDA’s 40 composite metrics.


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