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Targeting growth

The annual report of the Central Bank of Oman is a thumping approval of the success of the Sultanate’s achievement in tackling economic challenges. The robust expansion that the economy experienced from 2010 to 2014 offsets the effects of moderate contraction on account of hydrocarbon weakness the world over. The government’s plan to tackle the challenges through a multi-pronged approach has found favour with macroeconomic experts around the globe. They include reining in public expenditure, augmenting non-oil revenue and pursuing an economic diversification strategy. The report prefaced by CBO Executive President HE Hamoud Sangour Al Zadjali points to expectations of oil recovery considering the pumping cap in place. It is good to note that the steady progress in macroeconomic reforms including excise and value added tax is helping to steady economic growth. New regulations on labour and foreign direct investment are expected to push up growth figures even further in the medium to long term. The CBO rightly assesses that the government’s flagship economic diversification programme unleashed in the Ninth Five-Year Plan will pave the way for sustainable long-term growth. Tanfeedh focuses on targeting the resources on the growth of manufacturing, logistics and tourism sectors, leveraging the unique advantages that the Sultanate enjoys. Mining and fisheries also get particular attention under the diversification programme.

The efficiency with which the authorities have been going about implementing the programme can be understood from the success already achieved. The implementation authorities report that the 13 per cent projects of Tanfeedh were implemented by May outstripping the target of 9 per cent. The announcement was made at steering committee meeting chaired by Supreme Council for Planning Secretary General HE Sultan Bin Salim Al Habsi. The underlying stress on public-private partnership in Tanfeedh has been proved to be a catalyst for growth. It may be noted that the meeting that reviewed the functioning of the committees on education, health and agriculture involving 10 institutions came up some encouraging numbers. The pace of implementation of Tanfeedh focusing on 121 selected projects in public-private partnership has been appreciated by experts across the region. The projects are expected to generate more than 30,000 jobs following a total investment of 16.3 billion rials. The private sector is expected to bring in investment of more than 14 billion rials, which will cause a seismic shift in this nation’s development paradigm. The fact that the nation has exceeded expectation shows the economic diversification efforts are right on track. The steady progress has been particularly heartening considering the problems many other nations are facing in deviating from their traditional economic path. It was a wise step on the part of the government to lay a solid foundation through detailed planning and formulating robust projects. The government deserves praise for the focus on pushing the reform process needed to achieve the ends of steering the national economy away from undue dependence on oil sector. The target is to raise the contribution of the three chosen sectors to the gross domestic product to 6.6 billion rials in 2020.