ENHANCING DEVELOPMENT

Oman 2017 | ECONOMY | INTERVIEW

TBY talks to HE Dr. Ali bin Masoud al Sunaidy, Minister of Commerce and Industry, on annual growth, increasing FDI, and increasing the country's international participation.

HE Dr. Ali bin Masoud al Sunaidy
BIOGRAPHY
HE Dr. Ali bin Masoud Al Sunaidy was appointed as Minister of Commerce and Industry in February 2012 and subsequently, as Deputy Chairman of the Supreme Council for Planning. Prior to his latest appointments, he was Minister of Sports Affairs, commencing October 2004. From May 1996 until October 2004, he served as Undersecretary of the Ministry of Commerce and Industry. His Excellency received his PhD in Economics from the University of Hull (UK), and obtained a master’s degree in business administration from the University of Bristol (UK) in 2000. HE Al Sunaidy was awarded a bachelor’s degree of science in industrial engineering from the University of Miami (Florida) in 1988.

What is your vision for annual economic growth during the next five-year plan and how were the target sectors of this plan identified?

We aim to maintain a 2.5-3.5% GDP growth rate across the different sectors. However, the diminishing returns from the oil sector will definitely have an impact, and that has to be offset by two things: producing more oil and more gas so we can generate more revenue, and by having other, non-oil sectors grow. In this five-year plan, we have concentrated on five non-oil sectors: manufacturing and industry, minerals, tourism, logistics, and fisheries. For example, with manufacturing, we are expanding our industrial zones. We are expanding Samail, Sohar, Nizwa, and Sur, and we are servicing more land. There are tenders to expand Samail and Sohar already, and we are also expanding a new industrial zone. In the minerals sector, most of the work is focused on changing the law.

What role would you like to see public-private partnerships play in enhancing private-sector development in Oman?

Outside of the five sectors mentioned, there will be PPPs or BOOT projects in a few sectors, especially the health sector. We will start to see projects that are designed, financed, and built by companies either on long-term lease terms to the government or through a process of transferring to the government over time. We are also working on refining the law pertaining to sewage, and there will be privately-owned sewage plants just like privately-owned power plants, but the networks will still be government owned. We have already started testing this transfer through Bee'ah, which is a state-owned company that has agreements with private companies and is transferring the work of waste collection to privately-owned companies. This is regulated by a new law that will allow for a larger private sector role and competition in the waste management sector.

What drivers were behind the more than 10% increase in FDI inflows, and how does Oman assert itself in the international arena as a destination for foreign investment?

We have been generally hesitant about borrowing and, over the years, we have not gone out aggressively looking to borrow or for direct investment. Now we have more of a need to excite foreign investors and encourage lending. Foreign capital comes outside of borrowing too. The Gulf is seeing a good FDO inflow in real estate from Europe, while, from India, we are seeing construction and mechanical engineering. The Chinese have tapped into a new market totally, which are in clusters like Duqm. In addition, since 1970, the government was the only entity that did industrial parks. In 2016, we saw a local Omani company take a 250sqm piece of land and create an industrial zone, which was the Sindan project in South Batinah, and then after that there was a big USD10 billion investment by the Chinese in Duqm for an industrial park.

To what extent is Oman looking into expanding its footprint abroad?

In 2016, we have so far been in Africa three times in different capacities. We participated in a meeting in Kenya, then we took about 200 people from around 100 businesses to Ethiopia. Now we are exporting many commodities like packed food and oils and we are also sending petrochemicals to Ethiopia. We then went to Tanzania with a delegation of about 80 businesspeople. We feel Africa will grow tremendously and we feel that we could be a major supplier of petrochemicals and packed food to them. We could also supply fiber optics, cables, and specialized building materials, as well as soft services like IT and advertisement, including website design, development, and content management. As Oman Air opens up new destinations both in Africa and Iran, we will see more direct interaction. There have been numerous trade missions in 2016. They are not just to expand our exports, but to directly deal with the people of those countries so we can import, export, and re-export to them.