Oman's trade links with GCC on the rise |
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MUSCAT -- The amount of intra-Gulf Cooperation Council (GCC)Gulf Cooperation Council (GCC)
trade stood at $46.6 billion in 2007 in terms of exports from the six GCC states to the other GCC states. The intra-GCC trade has grown rapidly at 32.4 per cent from 2003 to 2007. This share has been growing as a result of the Customs Union that was set up in 2003 to increase intra-GCC trade, according to a study entitled Trade Links between the Sultanate of Oman and the GCC released by the Ministry of National Economy recently.Intra-GCC trade has the highest significance for Oman. About 51 per cent of Oman's non-oil exports went to the GCC states and 30 per cent of its imports came from them in 2007. Oman runs a trade deficit with the GCC block as a whole at RO 532 million in 2007, the second highest level in the last 10 years as imports from the GCC peaked in 2007. The Sultanate has imported more than the value of its non-oil and re-exports to the GCC member states each year since 1998. Whilst Oman had a trade deficit with the GCC it had a trade surplus with the world of RO 3,349 million in 2007.
The Sultanate is a significant source of certain key commodities to its GCC countries. The UAE is the main recipient of these exports. Oman is also a significant market for exporters in other GCC countries. Oman is a significant participant in intra-GCC trade of commodities accounting for 20 per cent of intra-GCC imports and 7 per cent of intra-Gulf exports. The proportion of total imports coming from GCC countries has increased slightly over time from 7.7 per cent in 2000 to 8.2 per cent in 2007.
A similar pattern is observed when looking at total exports (oil, non-oil and re-exports) with the proportion of total exports going to the GCC countries at 6.3 per cent in 2004 and 7.8 per cent in 2007.
There is a larger increase when focusing on non-oil exports, which grew from 21 per cent of all non-oil exports to GCC members in 2004 to an estimated 26 per cent in 2007. This could be, in part, due to the introduction of the GCC Customs Union in 2003.
Oman's non-oil exports
The value of trade between Oman and the GCC has been growing at ever higher rates as the decade progresses. The star performer has been the non-oil export sector which has grown from a low base of RO 143 million in 2001, when non-oil exports to the GCC grew 6.5 per cent; to RO 659 million in 2007 with 55.5 per cent year on year growth. In 2003 the value of these exports entered a period of accelerating growth that continued through into 2008.
The strong growth of non- oil exports from the Sultanate to the GCC between 2003 and 2007 has meant that non-oil exports have caught up with re-exports to the GCC. Re-exports used to be at least double the value of non-oil exports but in 2007 they were almost equal. In 2001, whilst non-oil exports to the GCC were RO 143 million, re-exports were RO 280 million. In 2007, non-oil exports and re-exports to the GCC countries were RO 659 million and RO 699 million respectively.
Imports from the GCC to Oman have had peaks of high growth in 2004 when they grew 64.9 per cent and 2006 to 2007 when they grew 19.8 per cent and 44.2 per cent respectively. This high growth has meant that the value of imports from the GCC countries has more than doubled from RO 740 million in 2001 to RO 1,854 million in 2007. The RO 659 million of non-oil exports from Oman to the GCC nations in 2007 came from 309 products of a minimum value of RO 10,000. The majority (74 per cent) of the non-oil export value to the GCC came from 20 of these 309 products and 46 per cent came from just 3 products, which were: co-axial cable over 10mm wide and over 300 volt; lubricating oil for spark-ignition engines (gasoline) and other liquefied petroleum gases.
In 2007 six of Oman's non-oil export commodities to the GCC were both high value (over RO 10 million) and high growth (over an average 100 per cent growth per annum 2001 to 2007). These six include the three highest value commodities such as polypropylene, solid unsweetened milk, and glazed ceramic tiles. To sum up, Oman's share in the intra-GCC trade holds out good prospects. The GCC states have been going through a period of economic boom that brought their combined GDP in nominal terms to around $1,151 billion in 2008, according to the IMF's World Economic Outlook Database (October 2008).
By Hasan Kamoonpuri
© Oman Daily Observer 2009
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