New Horizon

The National Program for Enhancing Economic Diversification, better known as Tanfeedh, was proposed in 2016 and has come to be the catalyst of all the Sultanate’s efforts to diversify the economy and reduce dependency on oil exports during a challenging point in history. Tanfeedh is a core element of Oman’s Ninth Five-Year Development Plan 2016-2020 and includes recommendations from the public and private sectors, as well as individual citizens.

Tanfeedh has raised hopes as new sectors begin to flourish. New companies—large corporations and SMEs—are setting up shop in Oman, international investors and FDI are flowing into the country, and tourist and expatriate numbers are at an all-time high. Tanfeedh is currently beginning implementation of Phase I, which will focus on the manufacturing, logistics, tourism, finance, and employment branches of the plan. This will be the first step of many that will help assure that the Omani economy is diversified and that dependency on crude oil is slowly reduced.

Duqm, a small fishing community of 10,000 fishermen, is being transformed into a world-class logistics hub that will pave the way for other sectors such as mixed industry, petrochemicals, renewable energy sources, and tourism. Projects to highlight in Duqm include Oman Wanfang’s USD10-billion Sino-Oman Industrial City, the Chinese USD94-million, 1,000-MW solar panel project, and the Duqm Refinery, a USD7-billion JV between Kuwait Petroleum International and Oman Oil Company.

On opposite sides of the map, Sohar and Salalah continue to expand, bringing new opportunities and business to the special economic free zones available in each city. The Oman Rail Network, which is expected to transport goods and passengers, will bridge cities throughout the country while connecting mining operations with the most prominent ports. Furthermore, projects such as Orpic’s steam cracker project in Sohar, and the Liwa Plastics Industries Complex, are looking to integrate new infrastructure to maximize efficiency and profit margins.

The Sultanate’s special focus on food security, for example, has led the fisheries segment to grow by 11%, while many other countries in the world are growing at about 2-3%. Parallel to fisheries, three main food security projects are expected to come online in the next two years; the Oman Food Investment Holding Company will focus its strategy on developing self-sufficient poultry, red meat, and dairy plants through Al Namma Poultry Company, Al Bashayer Meat Company, and Mazoon Dairy Company, respectively. Combined, a total investment of OMR237 million (USD613 million) is expected for these projects. In addition, a special initiative to make manufacturing an attractive sector of the economy has seen a surge of both local and international companies manufacturing locally instead of transferring their operations abroad. In this sense, in-country value continues to grow.

The new Muscat International Airport terminal is also expected to be completed in 2018, a 580,000-sqm facility expected to handle 12 million passengers per annum. Also, the new Salalah International Airport will be able to handle 1 million passengers per annum. These two airports will be the gateways for foreigners coming into Oman and will help increase the Sultanate’s tourism capacity.

Tanfeedh is off to a great start; however, continued investment and efforts will be required to follow through on long-lasting economic diversification, a goal to which Oman is showing real commitment thus far.