Ensuring local added value in shopping malls requires effective legislation
Published: 01:10 PM,Oct 09,2024 | EDITED : 05:10 PM,Oct 09,2024
The Oman Forum for Local Added Value 2024 recently presented several key recommendations to boost efforts in developing the economies of the governorates and emphasized the importance of assigning projects and contracts to small and medium enterprises (SMEs), as well as stimulating the growth of promising sectors within the country.
Local added value refers to efforts aimed at retaining local resources within the economic system and utilizing them within their local context. However, this is not always achieved by commercial institutions operating in Oman unless legislation and regulations require them to do so, as is the case in many other countries in the region.
For instance, some countries have laws mandating that consumer and food complexes, such as shopping malls, prioritize purchasing local products, even at a slightly higher price compared to similar imported goods. This approach supports national industries, expands the local industrial base, provides marketing opportunities for domestic products, and enables Omani human resources to work in these institutions.
Unfortunately, what we currently observe in large shopping malls in Oman is that they do not promote or market national products unless local producers pay substantial fees to secure shelf space.
These agreements also often involve annual payments, which undermines the local added value that these malls could contribute to the Omani economy. This contrasts with practices in other countries in the region, where shopping malls are required to prioritize purchasing from the local market—especially local industrial products—before turning to foreign imports.
We must focus on directing some contracts to local businesses and supporting local products. Many have observed that these shopping malls often issue tenders to specific foreign countries, where the mall owners are based, for items like notebooks, official papers, invoices, and advertising materials. Meanwhile, dozens of Omani printing companies and media institutions are capable of handling these contracts but are left waiting. As a result, the potential for these institutions to contribute to local added value in the national economy is diminished.
Some argue that there should be a requirement for these institutions to offer 25% of their shares to Omani citizens, transforming them from private companies into public joint-stock companies after five years of establishment.
This would enhance their contribution to the Omani economy in the future. These commercial entities generate significant profits from the Omani market each year, yet a large portion of these profits—some believe as much as 90%—is transferred abroad. Thus, Omanis do not benefit from these substantial annual earnings.
These institutions should take pride in engaging with Omani businesses, rather than looking abroad to import every item, especially when many of these goods may already be available in the local market. Achieving this would require the implementation of appropriate legislation.
Local added value refers to efforts aimed at retaining local resources within the economic system and utilizing them within their local context. However, this is not always achieved by commercial institutions operating in Oman unless legislation and regulations require them to do so, as is the case in many other countries in the region.
For instance, some countries have laws mandating that consumer and food complexes, such as shopping malls, prioritize purchasing local products, even at a slightly higher price compared to similar imported goods. This approach supports national industries, expands the local industrial base, provides marketing opportunities for domestic products, and enables Omani human resources to work in these institutions.
Unfortunately, what we currently observe in large shopping malls in Oman is that they do not promote or market national products unless local producers pay substantial fees to secure shelf space.
These agreements also often involve annual payments, which undermines the local added value that these malls could contribute to the Omani economy. This contrasts with practices in other countries in the region, where shopping malls are required to prioritize purchasing from the local market—especially local industrial products—before turning to foreign imports.
We must focus on directing some contracts to local businesses and supporting local products. Many have observed that these shopping malls often issue tenders to specific foreign countries, where the mall owners are based, for items like notebooks, official papers, invoices, and advertising materials. Meanwhile, dozens of Omani printing companies and media institutions are capable of handling these contracts but are left waiting. As a result, the potential for these institutions to contribute to local added value in the national economy is diminished.
Some argue that there should be a requirement for these institutions to offer 25% of their shares to Omani citizens, transforming them from private companies into public joint-stock companies after five years of establishment.
This would enhance their contribution to the Omani economy in the future. These commercial entities generate significant profits from the Omani market each year, yet a large portion of these profits—some believe as much as 90%—is transferred abroad. Thus, Omanis do not benefit from these substantial annual earnings.
These institutions should take pride in engaging with Omani businesses, rather than looking abroad to import every item, especially when many of these goods may already be available in the local market. Achieving this would require the implementation of appropriate legislation.