Economic diversification will help Oman achieve developed country status by 2040: WTO

The World Trade Organisation (WTO) has voiced optimism that the Sultanate of Oman will join the ranks of developed nations by 2040 if it continues to forge ahead with its economic diversification strategy in conjunction with the long-term growth objectives enshrined in Oman Vision 2040.

The upbeat assessment came at the end of a review of the Sultanate of Oman’s trade policy at the international body’s Geneva secretariat last month. The concluding session, attended by a delegation headed by Qais bin Mohammed al Yousef, Minister of Commerce, Industry and Investment Promotion, garnered praise from WTO Member States for Muscat’s overall open trade and investment regime, generally low tariffs, few non-tariff barriers to trade, improved business environment, and strong commitment to the multilateral trading system, among other achievements.

Concluding remarks by the Chairperson, Ambassador Dr Athaliah Lesiba Molokomme, also noted the Sultanate of Oman’s efforts to diversify its economy away from hydrocarbons – a policy that WTO Member States exhorted the Omani government to keep pursuing in parallel with the Vision 2040 strategy.

“Members wished to know more about Oman’s efforts of diversification and digital transformation,” said the Chairperson in her address. “In this context, many Members welcomed the launch of “Vision 2040” and the long-term goals included in the 10th Five-Year Plan. They strongly believe that the twelve national priorities and their performance indicators would help Oman achieve a more diversified and sustainable economy in the long run, and could help Oman achieve developed country status by 2040.”

While Oil & Gas still play a significant role in the domestic economy, the contribution of the non-oil sector has been growing strongly, the Omani government pointed out in its submissions during the review. The share of the oil and gas sector in the country’s GDP was 33 per cent in 2020, although oil and gas exports together accounted for 68.5 per cent of total merchandise exports.

The contributions of other non-oil economic sectors have been growing as well. The share of non-petroleum industrial activities on average was 19 per cent, while that of agriculture and fisheries was 2 per cent. The share of services sectors in the GDP climbed to 46 per cent after two consecutive years of accelerated growth.

Non-hydrocarbon activities have been growing year on year for the most part, according to the government’s submissions. The share of non-petroleum activities in GDP was 59.9 per cent in 2014, 72.4 per cent in 2015, and 74.4 per cent in 2017, before sliding back to 67.8 per cent in 2018 in the context of lower oil prices.

At the review meeting, the Omani government affirmed its unrelenting commitment to the country’s economic diversification, notably by enhancing the participation of the private sector and foreign investors.

“Oman provides excellent transportation and logistics infrastructure and a conducive business environment. Furthermore, Oman is strategically located in terms of accessibility and hence, it offers immense potential to become a gateway to the Gulf and Asia region for multinational companies (MNCs) and global value chains (GVCs),” it noted in its policy statement.

“The Government has implemented various structural reforms, including the promulgation of several important laws related to Foreign Capital Investment, Privatization, Public-Private Partnership, and Bankruptcy, in the recent past to improve the business environment and the functioning of the labour market so that Oman could provide a competitive edge to foreign investors. These reforms coupled with the existing potential and strategic location would facilitate higher inflows of FDI in the Sultanate, especially in non-hydrocarbon sectors,” it further added.