Muscat, More than half of executives
interviewed for the 2018 edition of the Business Barometer: Oman CEO
Survey carried out by Oxford Business Group (OBG), believe tourism
will take the lead in the Sultanate’s diversification drive although they
also expect hydrocarbons to continue playing a dominant role in the
national economy for the foreseeable future.
As part of its survey on the economy, the global research and
consultancy firm asked over 100 C-suite executives from across
Oman’s industries a wide-ranging series of questions on a face-to-face
basis aimed at gauging business sentiment.
Some 50% of interviewees identified tourism as the sector they
felt most likely to influence Oman’s economic development, suggesting
that business leaders think the country has the potential to significantly
boost visitor numbers while a further 19% and 17% selected
manufacturing and transport and logistics respectively.
Although diversification is a cornerstone of Oman’s Vision
2020 economic roadmap, OBG’s survey also confirmed that executives
expect hydrocarbons to remain the biggest determinant of the
Sultanate’s fortunes. Almost three-quarters (73%) of respondents cited
oil prices as the single largest factor they thought could impact the
local economy in the short to medium term, well ahead of regional
volatility, which was chosen by 22% of interviewees.
When asked for their views on Oman’s tax environment, the vast
majority (89%) of CEOs said they believed it to be highly competitive or
competitive on a global scale although like several other Gulf countries,
the Sultanate has yet to follow through on the GCC’s decision to
introduce value-added tax (VAT).
Executives were also largely positive about the levels of
transparency in Oman’s business environment, with some 65% saying
they perceived them to be high or very high. However, a significant
minority (25%) described them as low, suggesting that the Sultanate
could face challenges in its efforts to boost foreign direct investments
Opinions also varied on the subject of accessing credit in
Oman, with only 35% of business leaders describing the borrowing
climate as easy or very easy.
Commenting in his blog, Oliver Cornock, OBG’s Editor-in-Chief
and Managing Editor for the Middle East, said that while diversification
had long been a mantra of policy-making in Oman, the process of
building new, commensurately valuable revenue streams was never
going to be easy.
The steep plummet in 2014, which saw oil prices reduce dramatically,
highlighted not only the continued reliance of Gulf economies on oil
receipts, but also that no other sectors were yet stepping up to
contribute anywhere near comparably, he said. That said, the non-oil
economy is growing at a fair clip � 3.9% in 2017 up from 2.6% during
2016, according to figures from the Central Bank of Oman.
Cornock said it had been particularly interesting to note that
the key segments of the non-oil economy identified by executives as
ripe for growth, such as tourism, had already been earmarked by the
government for development.
Widely perceived as a high-end destination, visitor numbers have
fluctuated, but the broad trajectory is positive. he said. Overall, the
survey results showed that CEOs in Oman have a clear idea of the
areas they see as having the highest potential for diversification, but
also realise the continuing centrality of hydrocarbons.
Source: Oman News Agency