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Good progress made in economic diversification despite challenges

16 Aug 2021

Oman Vision 2040 Implementation Follow-up Unit has published the Economic Diversification Report 2020.

The key performance indicators in the report were followed up by the former Implementation Support and Follow-up Unit (ISFU), including projects and initiatives of the National Programme for Enhancing Economic Diversification ‘Tanfeedh’, as part of 2016-2020 Ninth Five-year Development Plan. 

‘This comes to contribute to developing and preparing the targeted economic sectors to cope with the requirements of Oman Vision 2040, and accelerate economic diversification through identifying methodologies that include implementing projects and initiatives, and finding solutions to the challenges they are facing,’ the report stated. 

The report focuses on nine sectors – manufacturing, tourism, mining, energy, fisheries, business environment, labour market and employment, logistics and information and communication technology. 

Most of the sectors faced challenges in 2020 due to the spread of COVID-19 pandemic. In manufacturing, despite these challenges, projects made good progress in 2020 due to huge efforts made by the projects’ owners. 

As a result, the manufacturing dashboard, which contains 23 projects and initiatives, achieved 61 per cent completion rate in 2020. In addition, its contribution to the GDP reached 10.8 per cent last year.

The logistics sector was able to utilise the sultanate’s developed infrastructure. 

‘Omani ports showed excellent performance, efficiency and reliability, as general cargo handled from January to the end of December 2020 reached around 54mn tonnes, and the number of containers that were handled reached around 5.2mn, with an increase of 5 per cent compared to 2019.’

The tourism sector, like many others, was affected severely by the pandemic. ‘Despite challenges faced by the sector, the former Ministry of Tourism, with the assistance of the former Implementation Support and Follow-up Unit, worked hard towards achieving the milestones set for 2020,’ stated the report. 

Under the labour market and employment sector, ISFU followed up a range of initiatives that serve to enhance the national workforce in compliance with the constantly changing labour market. 

This was done by adapting policies and procedures, like recruitment in real estate, facilitation of part-time and temporary work and movement of labour in the private sector, in addition to enhancing recruitment policies in the ministries overseeing the economic sectors.

The labour reconciliation committees were able to increase the percentage of labour disputes resolved at the ministry to above 60 per cent in 2020. Moreover, Royal Decree No 125/2020 was issued: Simplifying Litigation Procedure law, which sets the condition for case escalation. 

Business Environment Sector is one of the most enabling sectors for the national economy. The overall goal of the Business Environment Team under ISFU was to enhance the investment environment, as well as facilitate the services within the sector. 

Like most economic sectors in Oman, fisheries sector was affected as well in 2020. 

‘However, there were some success stories in 2020 where a number of projects have operated effectively despite the crises. For instance, the first Commercial Abalone Aquaculture Project in Oman was launched in December 2020. Moreover, commercial fishing continued to grow as the fishing fleet of Al Wusta Company maintained its fishing trips rate in 2020.’

In the energy sector, the sultanate seeks to diversify resources, through implementing several alternative energy projects and improving their efficiency. This is for the objective of meeting the increasing need for electricity, in order for the contribution of renewable energy resources to reach a range of about 20 per cent and 35-39 per cent of total power generation in the years 2030 and 2040, respectively.

The mining and information and communication technology sectors have great potential in diversifying the national economy. The wide range of minerals in the country create significant opportunities for investors. Consequently, bringing more investments will help increase the national income, exports, and job opportunities for Omanis.

 

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