Oman vision 2040 unit publishes report on progress of economic diversification in 2020

Muscat: Oman Vision 2040 Implementation Follow-up Unit published the Economic Diversification Report 2020, the KPIs of which were followed up by the former Implementation Support and Follow-up Unit (ISFU), including projects and initiatives of the National Program for Enhancing Economic Diversification “Tanfeedh”, as part of 2016-2020 9th 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 the economic diversification through identifying methodologies that include implementing projects and initiatives, and finding solutions to the challenges they are facing.

First: Manufacturing

Manufacturing sector is one of the main contributors to the Omani economy. However, it faced stiff challenges in 2020 due to the spread of Covid-19 pandemic. Despite these challenges, the projects made good progress in 2020 due to huge efforts made by the projects’ owners and teams. As a result, the manufacturing dashboard, which contains 23 projects and initiatives, achieved 61% in 2020. In addition, its contribution to the GDP reached 10.8% in 2020.

One of the projects that have seen significant progress is Al Bashayer Meat, which is one of the major projects under the umbrella of Oman Food Investment Holding Company (OFIC). The company aims to operate a fully integrated red meat project. This will be achieved by importing live animals from trusted sources; fattening them by providing the necessary feed for their natural and healthy growth; and slaughtering them in the company’s state-of-the-art abattoir.

Moreover, located in Salalah Free Zone, OQ LPG project is a mega project intended to extract over 300,000 tons annually of propane, butane and condensate from the Rabab Harweel field and central processing plant. It has been initiated to optimise the gas value chain, as the plant will process approximately 8.8 million Standard Cubic Meters per Day (Sm3/d) of gas and will produce around 304 Kilo Tons per Annum (KTA) of LPG products.

Moreover, another mega project in Manufacturing is Liwa Plastics Industries Complex (LPIC), which is a first-of-its-kind project in Oman, with a total investment of USD 6.7 billion. It is located in Sohar Industrial Port and will enable the country to support plastics downstream industry.

Second: Logistics

Logistics sector was able to utilise the Sultanate’s developed infrastructure. Omani ports showed excellent performance, efficiency and reliability, as the general cargo handled from January to the end of December 2020 reached around 54 million tonnes, and the number of containers that were handled reached around 5.2 million, with an increase of 5% compared to 2019. Khazaen Project is one of the most significant integrated economic cities in the Sultanate. It is strategically located in the Wilayat of Barka between Sohar Port, Muscat Airport and Muscat City, and being developed over 51.6 million sqm.

Moreover, after being a department under Oman Shipping Company, Oman Container Lines (OCL) Expansion project was introduced in 2018, in order to become a specialized company in moving containers. In 2020, the focus was mainly on volumes growth, service expansion, signing vessel sharing agreement and entering new markets. Also, OCL is offering value added services and reefer container services starting from 2021 onwards, in order to promote connectivity between Omani ports, introduce new direct lines to connect them with some regional centres, and attract major liner operators.

Third: Tourism

Tourism sector is one of the dynamic sectors that are directly affected by the local and international circumstances. In 2020, the sector, like many other sectors, was affected by the spread of the Covid-19 pandemic.

Despite challenges faced by the sector, the former Ministry of Tourism (MoT), with the assistance of the former Implementation Support and Follow-up Unit (ISFU), worked hard towards achieving the milestones set for 2020.

Fourth: Labour Market and Employment

The former Implementation Support and Follow-up Unit (ISFU) followed up a range of initiatives that serve to enhance the national workforce in compliance with the constantly changing labour market. This is 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.

Also, the former ISFU, in cooperation with the former Ministry of Manpower (MoMP), worked on providing solutions in line with the economic situation, such as activating the former National Center for Employment and establishing the Job Security Fund. In addition, it supported the growth of SMEs through an initiative that lists the jobseekers in logistics sector, and finding entrepreneurship opportunities.

In addition, the Development and Enhancement of the Judicial System to Cater to Labour Market initiative is one of the major projects in the sector, as the Sultanate strives to improve and enhance the attractiveness of work environment. The initiative's performance indicators aimed at activating a judiciary system that is specialised in labour disputes, able to cope with the advancements and requirements of the business environment, and can accelerate the procedures in order to preserve the rights of both parties.

The labour reconciliation committees were able to increase the percentage of labour disputes resolved at the ministry to above 60% in 2020. Moreover, the Royal Decree (125/2020) was issued: Simplifying Litigation Procedure law, which sets the condition for case escalation. In the next phase, the initiative aims to assess the progress of Arbitration and Reconciliation Committees for labour disputes, in addition to allocating and training judges specialised in labour cases in labour jurisdiction in courts.

Fifth: Business Environment

Business Environment Sector is one of the most enabling sectors for the national economy. The overall goal of the Business Environment Team under the former Implementation Support and Follow- up Unit (ISFU) was to enhance the investment environment, as well as facilitate the services within the sector.

In addition to the main dashboard of the business environment sector and the two separate dashboards developed in 2019: “Invest Easy” and “Lean”, “Doing Business” dashboard was introduced in 2020.

Sixth: Fisheries

As all economic sectors in Oman, fisheries sector was affected by the widespread Covid-19 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.

Seventh: Energy

The Sultanate seeks to diversify energy resources, through implementing several alternative energy projects and improving their efficiency. This is for the aim of meeting the increasing need for electricity, in order for the participation of renewable energy resources to reach a range of about 20% and 35-39% of total power generation in the years 2030 and 2040, respectively. Consequently, the total investment in the renewable energy will increase gradually in the coming years to support the shift to the energy mix, as per the target of Oman Vision 2040.

Ibri ll Solar Independent Power Plant is one of the sector’s mega projects. It is set to deliver a peak generation capacity of 500 MW, which will be enough to supply an estimated 33,000 houses with electricity, and enough to offset 340,000 tonnes of CO2 emission per year.

The project achieved 98% of its weightage in 2020, as the Energy Steering Committee and the former ISFU together played a key role in accelerating various tasks, and simplifying the process of giving some staff the permission to enter through the airport, despite travel restrictions during Covid-19 pandemic. In addition, the commercial operation of the project took place on 6 August 2021.

Eighth: Mining

The Mining Sector in Oman has 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.

Ninth: Information and Communication Technology

All entities utilised technology as the safe haven to solve the challenges that faced the work environment, as the pandemic proved the importance of digitisation for all kinds of services. SMEs played a key role in managing the situation through providing several applications to deliver groceries, goods and restaurant orders, and such service providers were allowed to reach the areas that were locked down. In addition, technology companies benefitted the most from the pandemic, especially the ones providing services that can be leveraged while staying at home, like digital broadcasts, video calls, and video conferences. Moreover, the pandemic encouraged the entities to accelerate the pace of work in their projects, as commercial entities and individuals were allowed to provide videoconferencing services, which increased the efficiency of working outside the office.

Knowledge Transfer Program and Development Workshops

Since its establishment in August 2020, the unit designed and held several workshops with government entities responsible for economic sectors. All these workshops were part of a comprehensive program to transfer knowledge, as well as sharing initiative development process, in order for relevant entities to complete the economic diversification initiatives and projects. Meanwhile, the Ministry of Economy is monitoring the progress of Tanfeedh initiatives and projects and tracking its outputs to ensure that goals are achieved.

During these workshops, the unit shared the progress made in the implementation of economic diversification projects and initiatives, as they contribute to achieving Oman Vision 2040, in addition to exploring a methodology to follow up and support programs of vision priorities and preparing the entities for the next phase.

Moreover, the unit worked on the development workshops with the relevant entities, in order to design a framework for Attracting Private Investments and Enhancing the Presence of Omani Exports in Foreign Markets Program (Invest in Oman), aiming at identifying investment projects and initiatives for every economic sector in the next three years (2021-2023). --ONA