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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

GDP from SMEs SET to double by 2020

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MUSCAT, Oct 18 - The contribution from small and medium enterprises (SMEs) to Oman’s GDP is expected to be more than 30 per cent within three years. “On the back of increasing investments and generation of more jobs, the GDP, which was only 15 per cent in 2014, will more than double,” said Khalid Safi al Haraibi, Acting CEO of the Public Authority for the Development of SMEs (Riyada).


He said the GDP from the sector has been witnessing a steady growth.


“By the beginning of 2017, it has reached 23 per cent thanks to the significant changes taking place in the economy,” Al Haraibi told the Observer in an interview.


The launch of investment funds has changed the economic scenario in the country.


From the beginning of this year, more funds are going to SMEs than in the previous years from traditional players like venture capital, he said.


“Now there are more than 500 well dedicated startups registered as SMEs. With the backing from the funds, these firms are expected to perform well and have an extremely strong impact on the GDP,” he said.


Referring to a drop in the number of SMEs in the first and second quarter of this year, Al Haraibi said this resulted from a healthy correction thanks to the macro-economic condition prevailing in the market.


“Normally economic activity in the first and second quarters of every year remains low and less contracting work goes to the SMEs, mainly the startups. But the activity picks up in the later quarters as it corresponds to the budget,” he said. Overall, the present economic activity augurs well for the SME sector, he stressed.


Data indicated there was a 35.2 per cent fall in the number of SMEs by June this year compared with the same period in 2016, while the total number of SMEs registered with Riyada until June-end stood at 27,923.


Compared with May, there was a 46 per cent decrease in the total number of SMEs by June.


While the total number of SMEs by June 2016 was 7,257, it declined to 4,702 this year. The total number of SMEs last year-end was 23,221.


One of the major supports that the authorities have identified as key to assisting SME growth is giving them a greater role in the large-scale infrastructure and industrial development programme currently being embarked upon.


“For this purpose, the Tender Board has called for at least 10 per cent of all work on major projects to be carried out by SMEs,” Al Haraibi said.


While the state can create a sustainable environment for small businesses, the firms themselves must make the most of the opportunities presented to them, he advised.


SAMUEL KUTTY


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