According to the 2019 Investment Attractiveness Index published by Dhaman, the Arab Investment and Export Credit Guarantee Corporation, Oman received FDIs amounting to $19.6bn in 2018. Saudi Arabia was second, having received $15.5bn in FDIs , followed by the United Arab Emirates ($14.1bn). This FDI in Oman was carried out in the form of 57 projects, which were set up by 44 companies, and provided a total of 10,897 jobs.
Overall, the Gulf Cooperation Council (GCC) has acquired 635 new foreign projects in 2018, provided by 528 companies at a cost of $51.6bn. These projects have provided 60,000 new jobs in the GCC countries. Commenting on the Royal Decree on Foreign Capital Investment issued on July 1, Dr. Talal Al Aulaqi, vice president of the Oman Economic Association, said the Royal decrees are part of the government’s efforts to create an organised and favourable regulatory environment for investment in all fields that serve the objectives of the Sultanate’s vision for the future.
“Three years ago Oman embarked on a fully integrated policy study under Oman 2040 and focus on one of the main pillars which was an international economic collaboration and investment. Previously this pillar was fully empowered and required a pre-conditioning for socio-economic consequence, therefore many opportunities from international investments in Oman was not fully utilised.
“The new Royal decree sparked new opportunity to divert selected international investment and enable them in Oman in strategic sectors which integrate with Oman 2040 and the national programme ‘Tanfeedh’.
He said: “The Royal decree comes at a time where the current international trade movement re-position themselves with recent development in international economic politics which will change the route of accessibility of the Euro-Arabian-Asian market and so they will need to access a new market which make Oman a suitable logistic hub which will open the Far East to them.”
In terms of Arab countries receiving investments from other Arab countries, Oman once again topped that list, receiving 58.4%of the total number of investments, followed by Saudi Arabia at just 10% . The report added that in 2018, 103 Arab companies established 173 new projects in the region outside the borders of their countries. The investment cost of these projects was estimated at $26.4bn, providing 32,196 new jobs.
Dr Talal Al Aulaqi who is also an energy expert added: “Some of the international investment to the GCC and MENA area was delayed from risk analysis point of view because the area was considered to be a conflict zone. However, Oman has always been a very stable business environment. The new royal decree comes to guide and provide a selection framework but what that can incentive the international investment with more accessibility to the business.
“I would encourage the implementation team to utilise the new legislation to attract the international investment which encourage companies focus on Science, Technology, Engineering and Mathematics (STEM) to be in locally here, Oman have one of the highly competent generation in the MENA region and such opportunity will unleash the human capital and provide new wave of talents.”
Arab investments were concentrated in the real-estate sector, followed by the coal, oil and gas sector, the food sector, and finally, the alternate energy sector.
The expansion and development of several of these sectors are part of the Sultanate’s Tanfeedh plan for economic diversification, which looks to move Oman away from traditional oil and gas-based sources of income and towards a sustainable non-oil future, which has earmarked five sectors for growth, including tourism, agriculture and fisheries, mining and energy, transport and logistics, and manufacturing.
Dhaman, the organisation that published the report, is owned by the government of the Arab states and four Arab financial institutions. It aims to promote the flow of FDI into Arab countries, enhance Arab exports and support Arab domestic trade, help with economic growth in Arab countries, and carry out knowledge sharing activities and technical assistance to Arab FDI bodies. The organisation was established in 1974 and is headquartered in Kuwait.
This edited article first appeared in Times of Oman.