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OMAN - Industry

Qais bin Mohammed Al Yousef

Minister of Commerce, Industry & Investment Promotion, Oman

Bio

HE Qais bin Mohammed Al Yousef was appointed Minister of Commerce, Industry & Investment Promotion in August 2020. Additionally, he serves as Chairman of the SME Development Authority. Prior to assuming the role of Minister, HE Al Yousef was Chairman of Oman Chamber of Commerce & Industry and CEO of the Al Yousef Group. While heading the Chamber, he served as Deputy Chairman of the Public Authority of Manpower Register and sat on a number of Boards and Committees, notably The Research Council, Oman Vision 2040 Steering Committee, Consultancy Board for the GCC Supreme Council and the Public Authority for Charitable Organizations. Earlier in his career, HE Al Yousef spent over 20 years in a variety of senior executive roles in the private sector with interests in oil and gas services, industry, logistics, insurance and financial services.

"The World Bank projected we will have the fastest growing economy in the Gulf in 2023 and the IMF predicted Oman will have the highest economic growth rate in the Arab World in 2024."

HE Qais bin Mohammed Al Yousef, Minister of Commerce, Industry & Investment Promotion, talks to TBY about efforts to simplify regulations to encourage FDI.

What are the main highlights, including the ministerial decision No 361/2023 that the Ministry of Commerce, Industry & Investment Promotion is taking to simplify procedures in order to encourage foreign investment?
Let me start by drawing your attention to the dynamism of Oman’s economy, something that is, of course, of fundamental importance to every foreign investment decision. The World Bank projected we will have the fastest growing economy in the Gulf in 2023 and the IMF predicted Oman will have the highest economic growth rate in the Arab World in 2024. On top of this, we have been ranked as the fourth most attractive country for foreign direct investment in 2023 in the FDI Standouts Watchlist. I should also point out the upgrading of our credit rating by Moody’s in May, moving us up from “Ba3” to “Ba2”, with a positive outlook for our economy. We at the Ministry of Commerce, Industry & Investment Promotion (MoCIIP) are proud to have played some part in helping create the dynamic economic environment that has led to these resounding international endorsements as, under the wise leadership and guidance of His Majesty Sultan Haitham bin Tarik, we take inspiration from the rich possibilities of Oman Vision 2040. Through the framework provided by this ambitious blueprint for growth and development, the Ministry has reengineered its approach to business and created a more enabling infrastructure for investment. As part of this, we have been streamlining services with pro-enterprise initiatives such as Invest Easy, the government portal where licenses and approvals can be obtained for more than 1,500 economic activities from 18 leading authorities, all in one transaction. In this regard, I should mention that since its launch in April 2021, over 421,000 licenses have been issued—77,757 of them to international investors. That is a year-on-year rise of nearly 60%. These are highly positive figures. The latest example of our enterprise-driven approach to business is the Invest Oman Lounge opened in February 2023 and made possible by Ministerial Resolution No. 361/2023. Located adjacent to Muscat International Airport so visitors can avail of its resources immediately on arrival, the Lounge has been developed to fast-track the business set-up journey by facilitating connections with all the help and tools needed to make investment decisions. It also provides specialist advisory services on legislation and tax regulations, labour issues, permit procedures and government incentives. The activities of the Lounge complement those of Nazdaher, the National Program for Investment & Export Development, which since March 2021 has been working to attract investment in major projects across the country.  I have to say we have been delighted with the number of investors who have already begun to use the Invest Oman Lounge and look forward to welcoming many, many more. But Oman’s exceptional competitive offer goes beyond the pro-enterprise infrastructure I have just mentioned. We have a wealth of natural resources; an enviable strategic location; world-class transport and telecommunications infrastructure; transparent regulatory environment; innovative, entrepreneurial and talented young population. Importantly too, we are a nation noted for its tranquility and stability. And, I am happy to say, iinvestors are taking notice as can be clearly seen in our FDI figures which at the end of 1Q2023 FDI reached USD55.1 billion. This is up 8.4% on the same period in 2022. I would just like to take a moment to talk about exactly why FDI is important, amidst all the facts and figures this is something that often gets lost. Increasing FDI makes a catalytic difference to our economy; strengthening our development objectives, generating meaningful jobs for our young people, spurring the creation of new businesses along the value chain, opening up export opportunities and more. These are just some of the reasons FDI is profoundly important and a huge source of motivation for our efforts every single day here at MoCIIP.

Oman’s non-oil GDP is set for 3.5% growth in 2023. Given the active role of MoCIIP in strengthening trade relations with other countries, what is the importance that trade and export-oriented industries are set to gain in Oman’s diversification agenda in the near future?
I will first address trade relations, if I may. Currently, we are negotiating Free Trade Agreements with China, Korea, Pakistan and New Zealand. We are also in talks with the UK as part of a GCC-wide agreement. These are all significant markets. The UK-GCC FTA alone is expected to boost trade by 16%. These will join our current portfolio of FTAs that includes the U.S. and  Singapore amongst others. The importance of these agreements for exporters can be seen in Oman’s existing FTAs. Take our FTA with the U.S., for example. In 2022 it delivered the best trade results for non-oil exports we have seen in a decade – that’s USD260 million in March last year, USD280 million in August and then USD287 million in November. To give you a powerful example of what that means for individual companies let me share the example of Salalah-based Apex Transgulf, manufacturers of Class I and Class II medical devices along with food and beverage, industrial and retail packaging. After the signing of the US-Oman Free Trade Agreement, they targeted the U.S. market which now stands as one of its strongest trading partners, exporting US$18 million of FDA registered medical devices to the US in 2022. I am confident the agreements that are in process will bring in new export-oriented international investors to Oman, companies looking to capitalize on the FTAs and export to the sizeable markets they open up. Of course, these new investments in our economy will create benefit for local communities, bringing quality employment opportunities for our young people as well as for local suppliers and service providers. Along with this will come other positive outcomes such as knowledge and technology transfer which will in turn spark new commercial possibilities. There is no doubt that Oman’s new and emerging industries will play a significant part in our future exports. In particular I should mention Oman’s green hydrogen industry which targets the production of at least one million tons a year by 2030 and up to 8.5 million tons by 2050. According to the International Energy Agency (IEA) this is greater than total hydrogen demand in Europe today. Indeed, the IEA further noted that Oman will be the largest exporter of green hydrogen in the Middle East by 2030 and the sixth largest globally. Let me be clear, the potential for Omani green hydrogen is vast as countries look for alternative energy sources and seek to reduce emissions. Indeed, we are already seeing investment from major manufacturers keen to capitalize on this important renewable. These include Japan’s Mitsui and Kobe Steel as well as Jindal Shadeed who is set to establish a green steel manufacturing plants on the Special Economic Zone at Duqm. I should mention here a very recent study out of Harvard Business School which cited Oman as the world’s best prospect for spearheading the transition towards ecologically responsible steelmaking. This is a momentous endorsement of this new Omani industry. Off-takers of Oman-made green steel are likely to be the automotive, maritime, aerospace, and white goods industries to name but a few. So, circling back to your question, we at the Ministry are working hard to lay the groundwork to support the immense possibilities of our established and emerging manufacturers, making sure everything is in place for them to trade with the world. The future for Oman’s exports looks very bright indeed.

On a sustainability note, please tell us about regulations committed to the 2050 net zero emissions goal. During our last interview, you mentioned national players contributing with programs, how are the projects HYPORT Duqm and Jindal Shadeed expecting to impact the dynamism of the Omani economy?
Let me here start by sharing something Michael Liebreich, Former CEO BloombergNEF said, he referred to Oman as a ‘future renewable superpower’. To explain what this bold statement is based on allow me to remind you of three of the many natural assets Oman has been blessed with – an abundance of solar, wind and land. These form the pillars of one of our most important new industries, the green energy industry, which through projects such as the Ibri II solar PV power plant and the award-winning Harweel Wind Farm – is already shining brightly in our investment landscape, already attracting high-caliber international partners and investors, already contributing to renewable electricity generation and already offsetting carbon emissions. But there is more. This renewable energy is the foundation of the green hydrogen industry I mentioned in answer to your previous question. As well as being a major future Omani export, this green hydrogen also helps power our own businesses and homes, cutting our own emissions and greatly supporting efforts to meet our 2050 Net-Zero Targets. Let me tell you that the Omani green hydrogen we export will make a substantial contribution to the efforts of countries around the world to reduce their emissions and fight the impacts of climate change. This should be a source of immense national pride. Recognizing the global importance of this new industry and leveraging its 25 plus years of public-private partnership success in the utilities sector, His Majesty’s Government has made significant investments in the renewables industry. This is seen in part in the strong eco-system of initiatives that has been put in place. One example of this is Hydrom, the new national energy company set up to help champion our energy transition. Another example is Hy-Fly – a national alliance of 15 major public and private institutions created in August last year to facilitate the local production, transportation, utilization and export of green hydrogen. It would be remiss of me not to point out that businesses across the country have been shouldering their environmental responsibilities for some time. Companies like Areej Vegetable Oils, an established leader in environmental responsibility, is on track to be to be completely sustainable by 2040. The perfume house Amouage uses solar to reduce external energy consumption while the new hi-tech processing lines in A’Saffa Foods expansion projects improve efficiencies in electricity and water consumption and reduce greenhouse gas emissions. Yuzu Agriculture uses cover cropping, crop rotation and composting to maintain soil health, build environmental diversity, reduce the use of fertilizers and sequester carbon. Environmental concerns and the opportunities of the green economy are inspiring many young Omani entrepreneurs. These include Mays EV, Oman’s first electric vehicle design and manufacturing company. Then there is carbon-capture start-up 44.01, winners of the Earthshot Prize in December 2022 as well as the Musk Foundations XPRIZE. These young businesses show environmentally focussed innovative instincts and spirit that augur well for the future of Omani industry.

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