OMAN - Industry
Undersecretary Commerce & Industry, Ministry of Commerce, Industry & Investment Promotion
Saleh bin Said Masan was appointed Undersecretary for Commerce & Industry at the Ministry of Commerce, Industry & Investment Promotion in 2020. He is also chairman of the board of the Public Establishment for Industrial Estates. Prior to taking up his post, Masan was an elected member of the Omani Shura Council from 2015-19 and chairman of the council’s Economic & Financial Committee. He is also the former Head of Planning at Sultan Qaboos University. He has lectured in economics at universities in Oman as well as overseas and has published a number of economic research papers in international journals. Masan holds a BA from Sultan Qaboos University, an MA with distinction in development and economic policy analysis from the University of Nottingham, and a PhD in economics from Loughborough University.
Overall, the value of global trade reached a record level of USD28.5 trillion in 2021, a rise of 25% relative to 2020 and an increase of 13% compared to 2019. During 4Q2021, trade in goods jumped by almost USD200 billion reaching USD5.8 trillion, a new record, while trade in services climbed to USD1.6 trillion. That is a value just above pre-pandemic levels. However, forecasts are being revised. In fact, the IMF has lowered its outlook for global economic growth again for 2022-23 as soaring inflation and the spillover from the Russia-Ukraine conflict cut into household purchasing power. It now sees world economic growth slowing to 3.2% in 2022 and 2.7% in 2023 compared with 6% expansion in 2021. It is likely that global trade will reflect these macroeconomic trends, with lower-than-expected growth. Even against this complex trade and investment backdrop, Oman has performed extremely well. For example, FDI volume in Oman at the end of 1Q2022 reached USD46.6 billion, a 19% increase on the same period in 2021. Our non-oil exports grew by 41% in 2021 to USD15 billion up from USD10.6 billion in 2020. Despite the headwinds we face, these are impressive results and a testament to the hard work, resilience, and ingenuity of companies and entrepreneurs right across Oman.
Going forward, digitalization will play a key role in the evolution of Omani manufacturing, as our industrialists explore new products and new markets as well as prepare for future supply and demand changes and operational risks. We are seeing Industry 4.0 coming to the fore in our manufacturing sector of late, its adoption accelerated by several new drivers emerging from the COVID-19 pandemic, including supply chain transparency; predictability and flexibility; efficient workspace reconfiguration; increased remote working and training and the flexibility to repurpose production. Another change we are seeing lately, again in part a consequence of the pandemic, is the push to bring supply chains nearer to home. There were signs previously that some large companies were beginning to pull back from globalized supply chains, driven by protectionist trade policies, among other factors as they look to safeguard their operations from future shocks. In this regard, more firms may seek to unwind the gradual outsourcing that saw them shift large portions of their business to low-cost economies. That change in strategy could include regionalizing, localizing or near sourcing more of their operations. It is a change in strategy that Oman is well placed to meet.
A green transition presents alpha opportunities for Omani enterprises in areas including, but not limited to, manufacturing, logistics; green buildings; waste conversion; solar and wind energy; and business services. In addition, expanding markets for greener goods and services in other countries will create opportunities for Omani companies to increase exports. Research shows the provision of sustainable products and services bolsters sales growth, market share, brand value and reputation. It is a win-win scenario. The Omani companies leading the green transition realize it is not about bravery but about the bottom line. It is clear that current trade patterns reflect the increasing global demand for products that are environmentally sustainable. Interestingly, research conducted by the Economist Intelligence Unit, shows a 71% rise in popularity of searches for sustainable goods over the period 2016-20 with continuing growth during the pandemic. This will create new market possibilities for Omani companies, particularly in the cosmetics, pharmaceutical, fashion and food sectors. Consumer behavior plays a pivotal role in driving change and demonstrating care for the environment. Today’s eco-conscious Omani consumers want to live more sustainably. They expect local businesses to play a positive role in society and feel that when it comes to driving positive change, brands bear as much responsibility as government.