Wednesday, May 29, 2024
Update At 14:00    USD/EUR 0,92  ↑+0.0009        USD/JPY 157,25  ↑+0.102        USD/KRW 1.363,94  ↑+2.94        EUR/JPY 170,58  ↓-0.067        Crude Oil 84,42  ↑+0.2        Asia Dow 4.015,84  ↑+1.31        TSE 1.759,00  ↓-26        Japan: Nikkei 225 38.680,74  ↓-174.63        S. Korea: KOSPI 2.685,06  ↓-37.79        China: Shanghai Composite 3.119,90  ↑+10.323        Hong Kong: Hang Seng 18.531,29  ↓-289.87        Singapore: Straits Times 3,41  ↓-0.003        DJIA 21,93  ↓-0.14        Nasdaq Composite 17.019,88  ↑+99.085        S&P 500 5.306,04  ↑+1.32        Russell 2000 2.066,85  ↓-2.8167        Stoxx Euro 50 5.030,35  ↓-28.85        Stoxx Europe 600 519,08  ↓-3.13        Germany: DAX 18.677,87  ↓-96.84        UK: FTSE 100 8.254,18  ↓-63.41        Spain: IBEX 35 11.276,00  ↓-49.5        France: CAC 40 8.057,80  ↓-74.69        

Oman at final stages of investment law that will place the country on the map

Interview - June 25, 2014
HH Sayyid Faisal Bin Turki Al Said of the Oman Public Authority of Investment Promotion an Export Development (ITHRAA), speaks to United World about Oman’s attraction as a investment location, the Vision 2020 plan, developing brand Oman and trade and investment relations with the United States.
Oman has emerged as an attractive destination for foreign direct investment due to its free market system, stable macroeconomic environment and political stability under the guidance of His Majesty Sultan Qaboos. What has been the recipe for success in Oman?

As you rightly said, we have most of the ingredients in place. Oman has been working aggressively on the legal framework and from a judiciary point of view, protecting investments and whatever rights the investors have - the incentive package is quite interesting looking at the region. I think we came a long way, first of all acknowledging the opportunities but they need to be further explored – we used to promote a lot of sectors generally speaking without focus and so now we're moving towards more focus. I think the challenge would be from now on is putting focus on a certain scope of business. We are now in the final stage of the foreign direct investment law and we look forward to having a meaningful FDI law that will place Oman on the map in the region and so a lot of emphasis has been put on this law.

Historically, Oman has always been a nation devoted to trade. Can you give our readers an overview of the current trading balance, regarding manufactured products and how this works into the diversification strategy?

What we have been involved in as an authority with non-oil sectors is assisting manufacturers to venture into new markets or expand in existing markets. So we spend a lot of time, based on a strategy that we review every 3-5 years, where we identify thrust products and according to the potential in the markets, volume of sales, exports, we defined those products. We started with maybe about 14 products and now we have over 40. We spend a lot of time to see what exporters are doing and try to assist them to venture into new markets with extensive market research and surveys, within close proximity we have markets that might not know what we offer and then international markets we tap into as well- so we spend a lot of time on those products and matching the potential with those markets. Throughout the year, the export development department identified key exhibitions and conferences where we take our exporters, for example food products, food-processing, marble etc. If you look at some statistics, we have significantly increased the growth of non-oil exports over the last 10-15 years because we have worked very closely and tried to customize the strategy.

We’ve discussed increasing quality and enhancement of external trade - can you expand on the current legal framework established by the government to do so?

The legal framework works both ways—attracting meaningful investments and externally as well making it easier for the private sector to venture out. At the political business level, there are bilateral agreements—avoidance of double taxation and so on. Al of this helps to attract investments. Regarding the free trade agreement with the US, there is still more to do. We had the Oman road show last year but the US is massive and so it had to be very focused, but building on that, how do you define other exporters who currently trade with the US but might want to be closer to that market through Oman, that is something we want to benchmark, it is the private sector being aware of the various agreements, a continuous dialogue between them and the government is needed. The private sector is quite risk averse here and not confident to venture out but once you get them there, in an exhibition etc., then you don't have to do anything more, they start interacting directly; it's that first step that is needed.

Can you expand on the 8th five-year plan and the 2020 plan, regarding aims to develop the IT sector and the related major products?

We are concluding the last years of the 2020 plan and there has been a lot of tweaking. Back in 1995 when we started, we were one of the few countries in the region with a future planning agenda and of course, it was quite a challenge to anticipate what was needed. Still, back then, the notion was of diversifying and empowering the private sector. So the key core values have not changed but what has changed is an emphasis on looking at what will be the enablers - ICT is becoming more apparent for example. The ITA was developed and their primary role is to ensure that every single government body was transforming. Most importantly, the need to access information and an ease of service online (E-government), a role in educating with basic info and applications so that the people can run the new infrastructure. Being connected, training people to accept the change and evaluate the services and assess the efficiency of services.

In which industries do you expect the most growth from in the coming years?

I think tourism is an obvious one and Vision 2020 anticipated that growth to be 3-5% and we have just hit 3%. I think it is still quite a humble figure and we could easily grow that. Tourism will be driven for a period beyond five years, so we must focus on the strategy, investment opportunities, jobs we expect, the ease of attracting businesses and what that Ministry will be requiring.

Do you work directly with any Small and Medium Enterprises?

We don't necessarily get involved with SME's directly per se, what we try to do is try to understand how various investments might help and try to understand how the various sectors and ministries - as they progress and evolve in their own strategies, if we can understand the type of investments they would like to attract, that would assist in creating a spinoff supporting industry, then we will put a focus on those – that is basically our mandate. Duqm for example, if they want our help, we must know which component that they have to define. Or, the section on fisheries, they would want us to find people with the best experience and expertise in this field.

How are you working to promote the ‘brand Oman’ in the region as well as globally?

Oman as a nation has always had a brand but we haven't been successful in creating a business driven brand or specific to tourism. In 2007 when we really started to focus on what we should stand for, the obvious sectors were tourism and business in general but now, it is obvious we need a clear direction. There is an increased focus that we can be a logistics infrastructure hub. So ‘brand Oman’ eventually is going to happen, going hand in hand with the Vision 2040 Plan, and everything associated with it. It is difficult and has to capture the most important components and move away from oil.

How vital is that growth of alternative sectors and diversification?

If we are blessed with continued positive prices for oil then the focus at the government level is to use those revenues to reinvest in infrastructure for at least 5-10 years. Regarding diversification, an interesting development within the oil and gas sector is the in country value development - what more can we do to bring into the country, our suppliers, why not consider Oman? Our focus though, is to move away from oil, so we have to get on it. Oman will still be dependent on oil but for the purpose of developing the infrastructure. There is a shift in the overall attitude for the strategy—how everyone is involved and can contribute, and no one is alone and must be a part of the overall strategy.

What is your view on how Oman is perceived worldwide and its role in the future in terms of bilateral relations with the US?

Politically speaking, we are confident that Oman enjoys excellent ties around the world and with the United States as well, but we need to benefit from that economically. We haven't been doing enough. More emphasis on showcasing Oman, especially in markets where we can attract talent, potential buyers etc... We need to put emphasis to be present in these markets, build awareness. Implementing the Free Trade Agreement with the United States is in itself a huge challenge. We have to continuously develop it. There should be a central effort to promote Oman.

What areas of cooperation would you like to see developed between the US and Oman?

It was interesting to have this conversation with SQU, and the Research Council spends a lot of time with this subject. I think in terms of knowhow and also technology, that is the most important thing. Whether it is in manufacturing, education, technology in education, generally speaking I think manufacturing is the most important sector. Tourism possibly, the film industry for example, seem to be interested in Oman as a new exotic location, so we could open up this sector but it needs some more resources, structure.

On a more personal level, what would be your final message to a potential investor or visitor?

Oman is a place that needs to be experienced. Come as a tourist and see and in most cases you will return and likely have a feeling to open a business here. This is unique in the region. The challenge is how much information can we send across - how to tell the story, getting people to be intrigued. The moment you’re here, perceptions change and we see it from all over—Europe, US, and the MENA region as well. Those perceptions change. We are spending to develop our access – whether through the portal online, we try to promote the whole package, not just the idea that you can do business here but can you also enjoy living and working here. To have a family, a life here, so we feel that is key to have a holistic perception of Oman's potential. The global media is not doing this region justice and so we have to work on this change.