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Oman’s private sector on track to become primary driver of economic growth

22 Nov 2021 By OUR CORRESPONDENT

Muscat – A new report by the global research and consultancy firm Oxford Business Group (OBG) and Oman Chamber of Commerce and Industry (OCCI) has explored the sultanate’s privatisation drive and expanding role of private sector in Oman’s economy.

The Oman Economic Briefing report maps out the sultanate’s efforts to put privatisation and diversification at the heart of its strategy for sustainable economic growth.

Commenting before the report’s launch, Redha Juma al Saleh, chairman of OCCI, said the private sector had expanded its role in the Omani economy over the years, with investors today not only providing most of the funding for projects, but also assuming more of the risk, rather than being focused solely on the execution stage.

“Together with foreign direct investment (FDI) and privatisation, PPPs (public-private partnerships) will play a key part in enhancing the sultanate’s investment landscape,” he said. “These shifts will put the private sector on track to become the primary driver of economic growth, in line with the Vision 2040 development strategy.”

The report highlights the segments of the economy that have been identified as ripe for development, such as mining, tourism and logistics, and which, will be key in helping the sultanate achieve its Vision 2040 objectives.

In its coverage of Oman’s industrial sector, the report examines the country’s bid to boost economic growth outside of Muscat by investing in special economic zones and encouraging the expansion of industrial estates. The Oman Economic Briefing report puts the coastal city of Duqm, Salalah Free Zone, Sohar Port and Freezone, and Khazaen Economic City under the microscope, highlighting the incentives and advantages they offer and the government’s plans for developing them further.

Oman’s plan to accelerate development through PPPs is another focus. In this section, the report looks at the sultanate’s plans to privatise US$1.8bn of state assets under the Tanfeedh initiative.

The report contains in-depth interviews with high-profile representatives from both the public and private sectors, in which topical issues are explored, including the sultanate’s privatisation plans and the role of new legislation in enhancing its business environment.

Jana Treeck, OBG’s managing director for the Middle East, said that Oman’s natural assets and geographic location meant it was well placed to continue pursuing its diversification plans, which were already delivering results before the pandemic.

“While Oman’s economy contracted by 6.4 per cent in 2020, we anticipate a steady recovery, led by a return to positive growth of 2.5 per cent this year, according to the IMF,” she said. “Looking ahead, Oman has shown prudence in remaining focused on its long-term target of increasing the contribution of non-oil industries to 90 per cent of GDP by 2040.”

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