EXPORTS MATTER

Oman 2018 | ECONOMY | COMMUNIQUÉ: ITHRAA

Exports matter because they represent the very sectors that drive wealth, attract investment and talent, boost productivity and innovation, and generate employment. Industry accounted for 47.6% of Oman's GDP in 2017 and our non-oil exports were over USD6.2 billion. Today, Omani firms export to 135 countries.

The growth in Oman's non-oil exports has been mainly driven by exports to neighboring countries—the UAE and Saudi Arabia. Non-oil exports to the UAE rose 8.3% to USD1.5 billion in 2016, while non-oil exports to Saudi Arabia jumped 10.6% to USD659 million. Pakistan has also emerged as one of the biggest buyers for Omani non-oil products, with non-oil exports to Pakistan increasing by 1.7% to USD105 million in 2016. The export of Omani steel products, rubber, polypropylene, food, marble, and stone products have all seen outstanding growth in recent years.

Why Export?
Most small companies think exporting is purely for large and established firms. However, research suggests it is as beneficial for small businesses to engage in international trade as it is for large companies. Here are 16 reasons why you should consider exporting:
1. Spreading Risk
Businesses that are active in more than one market feel the impact of region-specific issues that affect trade less severely.
2. Innovation
Exporting powers innovation. SMEs that export tend to innovate more in products and processes than non-exporters.
3. Job Creation
The production of exported goods and services creates jobs, both directly and indirectly in the supply chain. One study found that every USD1 billion in new exports creates 5,400 additional jobs.
4. Trickle Down
The movement of goods and passenger travel for business services and tourism supports jobs and revenues in the port, airport, freight, and logistics sectors.
5. Better Pay
Export sector jobs pay well. For every USD10 billion in sales in a metropolitan export industry, its workers earn 10 to 20% higher wages than those in non-exporting jobs
6. Attract Talent
Omani businesses that export often develop a global presence, which is attractive when it comes to recruitment. Business owners may find it easier to recruit staff with better qualifications and greater levels of ambition—people who wish to help the company develop globally.
7. Weather the Storm
Businesses that export generally experience greater revenue growth than non-exporters and are better equipped to weather economic downturns.
8. Increase Sales
A diversified export market enables businesses to expand sales. It is often easier and more lucrative to tap a fresh market than trying to maximize an existing one.
9. Compete
Small businesses may find it difficult to compete with large companies in the domestic market. One reason is the awareness of the difference in the brand equity of a large company and a small company among the local populace. Tapping into an export market can overcome this issue, because international buyers would not make the kind of comparisons domestic buyers might.
10. Price Flexibility
Companies often have more flexibility in the pricing of their goods and services in an export market than in the domestic market.
11. Economies of Scale
If a business has excess production capacity, it will be more profitable to produce more rather than less, and sell the excess in an export market. This way, a small business can benefit from economies of scale.
12. Product Lifecycle
A product may become obsolete in one market but still have relevance in another. It is useful for small businesses to cash in on opportunities such as these and extend the life cycle of a product by selling it internationally.
13. Faster Growth
Surveys of large as well as small businesses have shown that companies that export tend to grow faster than those that do not.
14. Battle Competition
If the domestic market is competitive, it is always beneficial for small businesses to enter an export market rather than compete with larger firms.
15. Origin Oman
In many international markets, Omani products—from perfume, petrochemicals, marble and ceramics, food and beverages, steel, cables, automotive spare parts, plastics, furniture, and batteries to fish—are associated with quality and luxury. We have an excellent reputation.
16. Good All Round
Manufacturing generates well-paid jobs in a range of skills and professions, and not just on the production side; in fact, many large manufacturing companies are also services companies. Factories plug into local businesses and drive services, too. Crucially for any leading economy, manufacturing also drives technological change.