Diversify investment in Oman, Maqbool tells UK

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MUSCAT: Maqbool bin Ali Sultan, minister of commerce and industry, on Thursday called on British investors to seriously look at investment opportunities in various sectors in the Sultanate, rather than focusing merely on oil and gas exploration.

Addressing members of a high-profile British business delegation, Maqbool said the UK firms should look at opportunities in other fields too such as oil servicing, logistics, equipment maintenance and small and medium industries.

Lord Stephen Green, UK trade and investment minister, also attended the UK-Omani trade and investment seminar organised by the Omani Centre for Investment Promotion and Export Promotion (Ociped). "The UK is the biggest foreign investor in Oman. These investments are mostly in oil and gas sectors," said the minister, adding: "In the energy sector, Shell and BP have done a good work. The main question is what else you could do and what more you could do."

Maqbool said Oman offers ample investment opportunities in a wide range of sectors, including power, renewable energy, tourism, free trade zones and skill development in the educational field. These opportunities were highlighted in the first Oman trade and investment forum held in London last October.

Bilateral relation

Lord Green said although both countries have a strong and historically rooted bilateral relation and Britain is the single largest foreign investor in Oman, his country lost market share in the Sultanate in recent years. "I think, if we, the British are going to be self-critical, we would say that in some ways, we have not paid Oman the attention it deserves in recent years. We have lost market share," said the British minister.

"Oman has an exciting vision to diversify its economy, providing new jobs and opportunities for its fast-growing population. More than 60 per cent of Omanis are under the age of 25. Oman is a dynamic market, which is developing its tourism industry and building new ports, airports and roads. UK companies have the skill and expertise to help Oman with its exciting development plan," Lord Green noted.

Elaborating on booting investment expenditure, Maqbool explained that the Oman government plans to raise investment expenditure in the Eighth Five Year Plan period (2011-2015) to RO30 billion from RO14 billion in the previous plan, a phenomenal growth of 130 per cent.

"These investments are for (building) ports (expansion and a new port in Duqm), airports, water desalination plants, power plants, hospitals and schools," he said, adding: "There are ample opportunities for private sector in the construction sector."

Private sector's role

He said the government expects the private sector to play a big role in developing the economy during the Eighth Five Year Plan period.

Maqbool said the eighth plan, which started early this year, projects a real average annual gross domestic product (GDP) growth of 5 per cent and an annual inflation growth of 4 per cent.

"It is not that easy. We are seeing food and commodity prices going up. Food inflation in many countries has touched double digit."

He also said eighth plan is based on an assumed average oil price of $59 per barrel, which is against the current price of $100 a barrel. "Average daily crude production is expected to be around 900,000 barrels, which is against 775,000 barrels a day in seventh five year plan," he said. He said economic diversification and employment creation are the main areas of concentration during the plan period.

Highlighting the achievements of Seventh Five-Year Plan, Maqbool said that the economy has achieved an annual real GDP growth of 6.3 per cent, which is against a projected growth of 3 per cent at the beginning of the plan.

The oil and gas sector achieved a strong 11.2 per cent growth per annum (which is against a projected fall of 4.8 per cent), thanks to high oil prices. The average realised oil price was $72 per barrel, which was against the plan estimate of $30 a barrel.

Industrial sector accounted for the highest growth of 18.7 per cent, within which the construction sector recorded an annual growth of 22 per cent during the Seventh Five-Year Plan period.

As many as 177,000 additional employment opportunities were created during the five year period.

The British business delegation included senior officials of 20 leading UK companies from various sectors including education, finance, oil, gas and professional services. Khalil Abdul Al Khonji, chairman of Oman Chamber of Commerce and Industries also participated in the seminar.

© Times of Oman 2011