OMAN - Economy
Undersecretary, Ministry of Economy
Nasser Rashid Al Mawali has over 20 years of academic experience with an economic background, leadership, and strategic planning. He is a board member of a number of high-profile entities and other executive and non-executive committees in the Sultanate. Al Mawali is a publisher and an editor of a number of books and winner of the award for the Best Economist for 2015 and other local and international awards and privileges.
Long-term development plans usually need to be linked with medium-term executive schemes. The 10th Five-Year Plan (2021-2025) receives a significant importance as being the first executive plan of Vision 2040. The adopted approach, and the goals and programs set out, reflects the role in achieving the national strategic directives of Vision 2040 to bring the Sultanate on par with developed nations. The overall goals are to achieve a robust, resilient, and sustained economy, diversify and expand the production base, modernize manufacturing, improve the business and investment climate, empower the private sector, improve human capital and national capabilities, and achieve fiscal and monetary sustainability. In fact, the 10-year plan is considered the launch pad of Vision 2040, which comprises four main pillars, 14 national priorities, 88 strategic goals, and 68 performance indicators. Due to its significance and particularity, 14 working groups have been formed, with each group focusing on a single national priority.
On March 2021, the government announced a second stimulus plan to counter the unprecedented impact of the ongoing pandemic on the economy and support economic recovery. The incentives announced includes fiscal and monetary support policies in five main domains: tax exemptions and fees reduction; enhancing the business environment to attract investment; supporting SMEs; easing labor market restrictions; and banking sector incentives to ease financial conditions by lowering interest rates and facilitating domestic liquidity. The policy support measures were cross cutting, with an emphasis on SMEs and sectors operating within economic diversification, such as manufacturing, tourism, transportation and logistics, agriculture, fisheries, and mining. These sectors are expected to be encouraged the most compared to other economic activities. Recent data on national account shows that growth in manufacturing surged by 23.3% in 1Q2021, while accommodation and food services activity increased by 7.7% in the same period. Meanwhile, wholesale and retail trade witnessed a growth of 16%, while transportation and logistics increased by 12.7%.
The risk of trade protectionism came into focus in 2018 by the US administration’s actions against China, followed by limited escalation worldwide, with little impact detected on the global economic outlook. However, if trade tensions and protectionism continued, there should be negative macroeconomic implications on the global economy. The 10th Development Plan calls for promoting the values of competitiveness to strengthen the resilience of our national economy in light of regional and global changes, while keeping a national economy that is integrated with global economy. In addition, the plan calls for Oman to respond to possible continued disruption in global supply chains by strengthening its food, water, energy, and drug security and expanding its production base.
Vision 2040 is intended to activate the role of the private sector as a major engine in the process of comprehensive and sustainable development to achieve growth and employment opportunities. Vision 2040 revolves around four main pillars: social development, economic development, governance, and sustainable environment. The incorporating idea across these pillars is a comprehensive transformation approach, where the main role of the state is to support and complement the private sector, which should become the main engine of growth and employment, and where the other actors such as households, non-profit organizations and NGOs have a certain role to play. As the private sector is supposed to become the chief driver of investments in the country, the public sector will remain committing to the ongoing improvement of legislative, regulatory, and control structures governing economic activities in order to ensure harmony with their regulatory and economic objectives as well as increase their transparency.
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