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Arab Organization for Industrial Development: Oman economy performs well

Sunday, 04 July 2010 21:15

The Third Arab Industrial report issued recently by the Arab Organization for Industrial Development and Mining of the Arab League said that the Omani economy has performed well for the sixth consecutive year in spite of the repercussions of the global financial crisis.

The report, published by the organization on its website , pointed out that this good performance of the Omani economy is attributed to the high global oil prices and following the strategy of the public investment program, which aims to diversify the country's economy.

The report addresses the development of industry in the Arab countries during the period from 2008 to 2009 with forecasts for 2010 and is the third of a series of reports prepared by the organization.

The report pointed out to Sultanate's government's keenness to pursue a policy of broad diversification of the country's economy in order to ease the Sultanate reliance on energy by giving priority to projects that are aimed to develop a program for large investments in infrastructure ,services, oil and manufacturing industries.

The report noted that Oman's GDP witnessed a rise over that last 35 years, as the average per capita income grew to about $18,000, according to estimates of 2008. The report noted that the large investment programs followed by the Government of the Sultanate have helped to develop non-oil sectors such as tourism, services, trade , manufacturing and manufacturing industries , which witnessed a boom during the last period . The GDP of the sector tripled during the period form 2004 to 2008 to hit $6.4 billion in 2008 compared to $ 2.1 billion in 2004.

The report added that this economic expansion is mainly due to strong growth by the petrochemical sector, which represents 65 percent of gross domestic product of manufacturing industries, according to estimates in 2008.

The report said that although the petrochemical sector is the largest sector in the Sultanate, the industrial sector is diversified and includes other sectors like food industries , cement, aluminum and steel industries.

The report pointed out that the Sultanate's government encourages the development of manufacturing industries by encouraging the private sector to invest and build large projects for infrastructure, transport and supply of energy resources required to develop the manufacturing sector.

The report said that the food industry, fish and aluminum, steel and mining industries are among the industries that require special attention and for this purpose Sultanate declared an investment of $ 5 billion in order to attract private sector for basic industries, the steel industry, which depends on the manufacture of steel for construction materials.

The report also pointed out that the Sultanate's government is encouraging the mining industry through the sale of more public shares to the private sector, particularly in the manufacture of gold and copper due to strong demand.

The report added that the Omani exports performed well in 2008 because of the rapid development of the Sultanate's non-oil exports, which have been growing .It affirmed that the value of total commodity exports amounted to $ 38 billion in 2008 compared to $25 billion in 2007 due to high world oil prices in 2008.

The report also explained that the Omani exports are mainly petroleum products, accounting for 76 percent of total exports. The oil exports rose by 52% in 2008 to hit $29 billion.

The report also stressed that non-oil exports witnessed a rapid growth , with an average annual growth rate of 35 percent between 2004 and 2008 to a record in 2008, the largest increase by 48 percent . This is attributed to growth in exports of chemicals and petrochemicals, which increased by 74 percent during the period from 2007 to 2008

The report added that the food products, vegetable and animal oils have witnessed an extraordinary performance growth rate of 57 percent in 2008. It added that the economy is expected to witness acceleration of the pace of public spending and increase investment, especially in non-oil sector. It is also expected to resume its major industries due to the recovery in world demand. The report expects that economic growth rate in 2010 will grow by about 7.3 percent compared to 3 percent in 2009. It also expects the rate of inflation to reach 5.2 percent against 5.3 percent in 2008.

The report said that as an outcome of the substantial upgrading of the business climate, it is envisaged that the foreign direct investment in the Sultanate will be enhanced due to the growing confidence of foreign investors who were encouraged by the launch of liberalization program which is very appealing to them.

The report contains three chapters, the first of which presents a brief overview on the performance of the economy and industry in the Arab States in 2008.

The second one addresses the implications of the global financial crisis on the Arab economies and industries through a review of economic developments in Arab countries for the year 2009. It also analyze the effects of the crisis, especially on the oil industry, petrochemical, iron and steel and aluminum, textile and manufacturing industries.

Chapter three deals with the analysis of economic and industrial conditions at the country level. It provides a presentation on the development of the industry with particular emphasis on the manufacturing industries and the development of their most important sectors in 2008. (ONA)

Global Arab Network

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