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Robust basics

Economists from around the world have given resounding thumbs up to the Sultanate’s macroeconomic policies. They understand that the nation’s ability to draw large amounts in foreign direct investment (FDI). The latest to take note of the Sultanate’s sterling performance is Invest Money, a UK-based market analyst. Last year the nation had 7.7 billion rials worth of FDI, a 13 per cent increase from the previous year. This is an indicator of the health of the nation’s economy and vote of confidence by global players in the nation’s booming future. This sharp rise is all the more remarkable because the global FDI flows fell by 2 per cent last year. Hydrocarbon exploration naturally topped the investment, notching up 48 per cent. The highest flow was from United Kingdom at 2.8 billion rials, followed by the United States at 925 million rials. The quality of the investments has also been exceptionally good and will go a long way in pushing up economic growth. The Sultanate’s rising profile as an economy steadily marching to high income bracket is indeed reflected in the trust that major players show. This augurs well for the future because the quality of present investments is the key to more such investments in future. This is also a mark of the trust that the world has in the nation’s ability to negotiate global economic conditions. The nation’s planners have been forging ahead with a long-term vision of the nation’s economy and without falling into the lure of quick fixes. This is definitely helping the nation earn considerable respect across the world.

The Central Bank of Oman’s recent annual report itself acknowledged the success in tackling major economic challenges. The economy’s expansion from 2010 to 2014 offset the effects of moderate contraction on account of oil weakness. It is no wonder that the government’s plan to tackle the challenges through a multi-pronged approach found favour with macroeconomic experts. They include reining in public expenditure, augmenting non-oil revenue and pursuing an economic diversification strategy. The CBO report prefaced by Executive President HE Hamoud Sangour Al Zadjali underscores expectation of oil recovery owing to 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 the economy. New labour and FDI regulations have obviously helped to recharge economic growth prospects. The CBO’s assessment of the government’s flagship economic diversification programme has been particularly positive. Tanfeedh focuses on targeting the resources on manufacturing, logistics and tourism sectors, leveraging the unique advantages that the Sultanate enjoys. Mining and fisheries also get special attention under the diversification programme, considering the richness of the nation’s resources. The success that the nation has already achieved can be attributed to the efficiency with which the authorities have been going about implementing the programme. The implementation authorities report 13 per cent implementation of Tanfeedh projects by May, exceeding the 9 per cent target. The announcement, made at a steering committee meeting chaired by Supreme Council for Planning Secretary General HE Sultan Bin Salim Al Habsi, also testifies to the success of the nation’s strategy of public-private partnership.