The wide-ranging reforms implemented by the government in recent years have paved the way for Oman to diversify its economy and embark on a sustained post-pandemic recovery, according to a new research report produced by Oxford Business Group (OBG).
‘While the pandemic was a severe test for Oman’s macroeconomic stability, the crisis spurred policymakers into enacting or accelerating much-needed reforms that should help the country on the path to long-term sustainable development,’ the report titled ‘Oman Covid-19 Recovery Roadmap’ said.
With Oman’s economy affected by weak demand and prices of hydrocarbons in 2020, an uptick in oil prices and the easing of restrictions on mobility and business operations should help the sultanate’s economy stabilise in 2021, OBG said.
The report noted that Oman’s recovery is supported by reforms and strategies intended to improve the business environment and address longstanding fiscal challenges.
It said the government’s Medium-Term Fiscal Plan (2020-2024) should help to stabilise public finances and generate diversified sources of revenue through new taxation policies and the stimulation of private sector activity.
‘Reforms to the legal framework should help to attract higher levels of foreign direct investment into strategic industries and generate more private employment opportunities for the country’s young workforce,’ the report said.
In tandem with the new revenue-raising measures, OBG noted, Oman is working to stimulate more local and foreign investment as part of its private sector development agenda.
‘Towards this end, the country’s investment framework has been enhanced by a series of laws passed in 2019 related to foreign investment, privatisation, public-private partnerships and bankruptcy – all of which now have their implementation regulations approved,’ the report added.
According to the OBG report, the COVID-19 disruption forced businesses to adopt or expedite digital transformation strategies to strengthen their competitiveness, which could see some firms emerge from the pandemic in a better position to capitalise on new opportunities.
The report said that the adoption of digital solutions during the pandemic has helped to accelerate the growth of Oman’s digital economy, which was previously lagging behind regional counterparts.
The sultanate, OBG said, is prioritising digital transformation and innovation to create sustainable and equitable economic growth.
‘Digitalisation was identified as key to economic diversification in Oman’s Vision 2040. Vision 2040 includes a focus on building vital ICT infrastructure, introducing e-government services and strengthening national technical capabilities.’
Jana Treeck, OBG’s managing director for the Gulf, said, “Oman had already begun diversifying its economy before the pandemic took hold and is now stepping up the pace of its efforts. While longstanding fiscal challenges remain, we expect further reforms to help boost inflows into targeted sectors of the economy and nurture new growth engines, paving the way for a sustained recovery.”