Big opportunities for Oman to move forward

Dr Mathai B Fenn -

Dr Sebastian Thomas -

The Forbes magazine wrote about the challenges facing Oman’s economy in August 2016. It said if the country’s economy has to move forward, it should face challenges of raising large investment for infrastructure projects.

Therefore, if the petroleum era is over, on the positive side, Oman is positioned well along the shipping lines of East Africa that have been frequented by traders for centuries. This presents an opportunity.

Oman, with a focus on developing its ports, can bring together three significant forces shaping the world today: The focus of markets is shifting towards rising standards of living in Asia, specially India and China; African continent is a treasure trove of mineral wealth and has scope for agriculture; and China is today the manufacturing hub of the world and has proven its expertise in the field.

In this approach, neither the relatively small domestic market nor the stalled railway project is a major problem since the aim is to import, process and re-export.

Oman launched the Tanfeedh programme in 2016 with the aim of weaning the country off oil and developing others sectors. In the programme, the government acts as a facilitator and hopes to stimulate investment in the private sector.

Tanfeedh aims at accelerating the pace of economic diversification plans by assisting the government in utilising the best economic and social planning practices, and spending on projects with good economic returns and added value, besides providing “sustainable job opportunities” to Omanis.

Its target, apart from increasing Oman’s GDP, includes achieving goals, programmes and policies for economic diversification as identified in the Ninth Five-Year Development Plan and providing a clear and sound plan for increasing foreign and domestic investment in the Sultanate.

Tanfeedh has already attracted investments in over 120 projects, including investment in infrastructure from China and Japan. But for the sustainable success of the programme, we need a healthy ecosystem of ancillaries and feeders for larger projects, and should offer jobs to the Omani youth.

While the Tanfeedh programme does seem to provide a first step in building the economy, it will benefit Oman when the change it brings trickles down to other aspects of life, when youth have new jobs and when entrepreneurs step forward to set up a whole set of allied products and services.

A Renewables Readiness Assessment report prepared by the International Renewable Energy Agency in collaboration with the Government of Oman shows huge potential for solar energy in the country.

The United Nations Industrial Development Organization report mentions that waste management is an area of concern even though the waste production is 1.2 kg per capita, which is close to the global average. Still, as countries are measured in terms of their commitment to the environment, staying close to the global average cannot be good.

Interestingly, new technologies are constantly emerging providing Oman with a chance to invest in this sunrise industry. In fact, waste processing itself can be a business that follows the import-process-re-export model, converting waste into energy.

As economic competition with China gets more intense, India’s prime minister announced a big push to stimulate its industry called the ‘Make in India’ programme in 2014.

Its objectives are similar to those of the Tanfeedh programme. India recognised that in order to succeed, industrialisation requires (a) ancillary products and services required to support manufacturing sector, and (b) trained people who understand the work and the standards they have to meet. With this in mind, the government launched the ZED (Zero Defect, Zero Effect on Environment) programme aimed at promoting quality in manufacturing and lowering impact on environment.

Tanfeedh is a good and timely move by the Oman government to prepare for a world that has reduced oil dependence. But if it is to benefit from the initiative, it is important to generate entrepreneurship and a trained work force.