Oman’s economic prospects seem on the right track on the back of its planned developments. Yet, what counts far more is actual implementation rather than just mere intention when it comes to infrastructure schemes.
Among the many plans, there is Oman Rail with an estimated first phase development cost of $1 billion. The project should help Oman affirm its position as an ideal place to do business and for tourism. The sultanate with its exceptionally rough terrain needs a rail network to make distances closer.
Another notable scheme relates to extracting about 1 billion cubic feet per day of tight gas from the Khazzan field in the middle of Oman. It represents a 30-year gas production and sales sharing agreement with BP. Clearly, BP provides the necessary expertise and know-how in the field.
The $630 Salah independent power project focuses on non-state ownership. Yet, the estimated $600 million solar thermal facility, named Miraa (mirror in Arabic), is ground-breaking.
Moreover, there is the $2.3 billion Omagine project, an acronym of Imagine Oman. Located near Muscat International Airport, the scheme focuses on developing seven pearl-shaped buildings in addition to hotels, a mall, a marine area, offices. The scenery, clean air and warm weather are meant to attract potential investors from the region and beyond.
It is hoped that such developments would allow Oman improve its ranking as a place to do business. The latest ‘Doing Business’ report published by the World Bank ranked Oman at number 66 among its 189 economies. It is only ahead of Kuwait among Gulf states.
The ranking is fine by international but not necessarily regional standards. The report ranks the UAE at 22nd spot, and the best in the region. (The survey offers quantitative comparisons on business regulations and the protection of property rights with regards to small and medium enterprises.) Likewise, it remains to be seen if these projects would help the sultanate enhance its competitive rankings among Gulf states. Currently, Oman is the least competitive economy within the Gulf after being ranked 62nd on the 2015-16 ‘Global Competitiveness Index’ published by the World Economic Forum.
The sultanate saw its ranking plummet by 16 positions in the last report after a slide of 13 notches in the 2014-15 report. Qatar and the UAE are at 14th and 17th respectively.
Omani officials made the right move by increasing the level of foreign ownership in joint ventures from 49 per cent to 70. What’s more, full foreign ownership is granted for certain projects.
Undoubtedly, measures like these should help Oman entice foreign investors, though not an easy task in a competitive world where some 200 countries seek foreign investments. Economies the world over attempt to attract investments to help address challenges of growth and job creation. Oman has its advantages but rivalry is severe from inside the region and outside.
By one account, projects worth $11 billion were granted in the first eight months of 2015. Chances are the authorities would showcase more state-of-the-art schemes during the Oman Projects Forum from October 25-28 in Muscat. It is suggested that projects worth $87 billion are up for grab.
The writer is a Member of Parliament in Bahrain.