The smooth political transition in Oman sent a powerful message to both local and international business communities. As a country, we are at the forefront of a new and important path of development. This path demands a paradigm shift in all aspects of development.
One of the strategies encouraged to achieve Oman’s vision 2040 is to attract foreign direct investment and build strategic partnerships with global investors, countries and multinational companies.
The government has been actively encouraging investment in the tourism, fisheries, mining, logistics and manufacturing sectors. Oman has world class transport, logistics and technology infrastructures and an abundance of natural assets, a great relationship with the rest of the world and a unique location that should all be utilized. Seeing as we have the necessary elements to nurture a sustainable and fruitful investment environment, I believe that proposing the right framework to attract FDI will be an effective place to start.
This may include the need for high profile marketing campaigns, preparing feasibility studies for certain projects, new policies for Omani embassies abroad and/or international embassies in Oman and any actions or policies needed to be taken into consideration by the new economic team to fulfil reform the economy.
The Sultanate is fully aware that attracting foreign investments requires a competitive business environment and business-friendly procedures. The Sultanate is currently revising the Foreign Direct Investment (FDI) law to regulate and encourage investments as well as ensure investor protection.
Developing the legislative environment will also include the introduction of property laws, the Public-Private Partnership Act (PPP), which will make the business climate more conducive to the private sector to lead long-term, structured investment in accordance with best practices. On-going opportunities for education development will result in a highly skilled workforce to attract foreign direct investment.
To overcome the challenges the country faces, Oman must work closely with its friends to build an Economic Strategic Partnership (ESP). This is achieved by building a partnership between the government (public sector), domestic business (private sector) and FDI (external sector such as investors).
The ESP approach can assist Oman with current complexities that hinder the smooth transition of the economy. The main objective of the suggested general framework is to enable Oman to transform to a new path of development. This involves unlocking the potential of various engines of growth and enabling the best utilization of infrastructure and comparative advantages of the country.
The ESP can help attract FDIs associated with capital and technology, as well as various markets to fill the gaps in the economy. The approach aims to strengthen and expand the different existing economic sectors, create new sectors, localize knowledge, and diversify sources of income.
To implement the ESP approach, we start identifying the three-key area. First, the priority sectors for goods, services, and business activities where Oman has comparative advantages (eg mining, tourism, fisheries, logistics, manufacturing, etc). Second, the goods and services currently being imported which can be produced locally with the help of multinational companies (MNC). Third, the right promotion and marketing plan, including incentive packages needed to facilitate and enhance the attraction of FDI.
Good examples for the ESP might include the petrochemical industry, the enhancement of oil recovery, water treatment, solar energy, mining, tourism, logistics, fisheries etc. Once these areas are identified, the necessary investment map can be made to show potential business opportunities, the goods and services that can be produced locally.
For the ESP approach to be successful, it must ensure a win-win for all parties involved. This approach must be driven by the government because of its dominant role and availability of resources. A high-level general framework is required to foster the creation of Omani joint venture with potential investors in all fields.
Dr Yousuf Hamed al Balushi
Economist at Smart Investment Gateway