The Ministry of Economy revealed today in the Ministry’s media meet its vision, mission and its institutional values. The Ministry’s vision "A competitive and flexible economy that achieves comprehensive and sustainable development" came to emphasize the pivotal role of economic growth in achieving the goals of the renewed renaissance. This vision represents a comprehensive framework for the Ministry activities and role. It will guide its plans and act as a roadmap for its programs and initiatives in the coming years. The Ministry`s mission "Improve the performance of economic sectors, diversify productive structures, enhance the competitiveness of the economy, and formulate policies and develop programs that achieve a balance between economic, social and environmental aspects" was also revealed during the event.
This announcement came during the media meeting for the year 2023 held by the Ministry of Economy in the presence of His Excellency Dr. Saeed bin Mohammed Al Saqri, Minister of Economy, His Excellency Dr. Nasser bin Rashid Al Maawali, Undersecretary of the Ministry and a number of officials, in addition to representatives of government and private media, academics in the economic field, a number of actors and writers in economic affairs, in addition to university students in economic disciplines.
The meeting began with a speech by His Excellency Dr. Said Al-Saqri, Minister of Economy, during which he highlighted the recovery of the Omani economy from the effects of the pandemic, which reflects the positive developments in the performance of macro indicators. His Excellency said that the Omani economy witnessed a growth, at fixed prices, by 2.1%, and this growth was driven by the growth achieved in oil activities by 1.4% and the growth achieved in non-oil activities by 2.1%. GDP, at constant prices, witnessed positive growth during 2021 and 2022 of 3.0% and 4.3% respectively. In addition, there has been positive developments in the performance of the trade balance and in the performance of the financial sector. The volume of public debt also decreased to 37% of GDP, which has positively impacted the Sultanate’s credit rating monitored by concerned international agencies.
"The policies implemented by the government have contributed to improving macroeconomic indicators, as these have prioritized reducing public debt, enhancing and increasing the pace of development spending, and creating an attractive investment environment to stimulate the performance of the national economy. The policies also focused on re-structuring the priorities of sustainability and balance in the state`s public finances taking into consideration improvement in energy prices globally." His Excellency added.
His Excellency also stressed that the current positive situation of the Omani economy is the result of three basic elements: governance and clarity of policies, in addition to having supportive accelerators such as the 10th Five-year Plan programs and national programs that support the priorities of Oman Vision 2040 that aim to create the appropriate environment to achieve the objectives of the first executive plan of the Vision.
Global Economy
His Excellency Dr. Nasser bin Rashid Al Maawali, Undersecretary of the Ministry of Economy, presented the first topic during the media meet in which he highlighted the developments of the global and local economy. His Excellency reviewed the prospects of the global economy represented in the slowdown in the growth of the global economy, global debt burdens, and the concern of the ability to control global inflation, in addition to the issues of geo-economic competition, the acceleration of climate change and its impact on the global economic scene, the decline of superpowers and the rise of emerging economies. His Excellency pointed out that according to the July 2023 report, the International Monetary Fund expects that the growth of the global economy will be 3% during 2023 and 2024, and the global inflation rate is expected to decline to 6.8% in 2023 and 5.2% in 2024.
Oman`s Economy Performance
Speaking about the performance of the Omani economy, His Excellency Dr. Nasser Al Maawali, Undersecretary of the Ministry, said that the macroeconomic indicators of the national economy indicate an improvement in the paths of economic growth, which enable the Sultanate of Oman to enhance its competitiveness regionally and globally, noting that the performance of majority of the main economic sectors is progressing well towards achieving the economic goals of Oman Vision 2040.
His Excellency noted that the GDP at fixed prices achieved a growth of 2.1% during the first half of this year to reach 17 billion riyals, compared to approximately 16.7 billion riyals during the first half of 2022. In terms of GDP at current prices, it reached 20.4 billion riyals during the first half of this year, compared to its levels during the same period of 2022. H.E also pointed out that the Ministry of Economy`s expectations for economic growth rates indicate a growth rate of 2.3% for 2023. The Ministry of Economy also indicates that the inflation rate is expected to reach about 1% in 2023, compared to about 1.9%, according to International Monetary Fund data. The actual data indicates that inflation rates in the national economy are still at safe low levels, as the inflation rate, measured by the consumer price index during the first eight months of this year, reached 1.2%. His Excellency highlighted the key initiatives that have been introduced to curb the effects of inflation, most notably fixing fuel tariffs, expanding the time frame for redirecting subsidies to electricity, expanding the list of goods exempted from value-added tax (513 items), in addition to the initiative to support the purchase of wheat, the initiative to support farmers, initiative to calculate imported inflation and other initiatives.
Tenth Five-Year Plan
Ms. Intisar Al-Wahaibi, Director General of Development Planning at the Ministry of Economy, reviewed the executive position of the performance of the tenth five-year development plan 2021-2025 at the level of national themes and priorities, where approximately 337 programs out of 430 strategic programs are currently being implemented forming 78% of the total number of strategic programs. Al Wahaibi said that some priorities have already started the implementation of all its strategic programs, such as the priority of developing the youth sector and the priority of health.
The meeting reviewed the distribution of financial allocations for projects being implemented and spend at the sector level. The number of approved projects from the beginning of the tenth five-year plan until the end of July 2023 reached 1915 projects, and the development budget approved during the tenth five-year plan amounted to 8 billion Omani riyals. In terms of the relative distribution of these projects among the main sectors, the infrastructure sector accounted for the largest share with 940 projects (53%), followed by the social structures sector with 524 projects (26%), then the service production sector with 258 projects (15%) and the commodity production sector with 193 projects and 6% share.
The meeting also reviewed the key projects being implemented during the tenth five-year plan for the period 2021-2023 in various social and economic sectors such as health, education, governorates development, energy, mining, agricultural and fisheries, in addition to reviewing the key projects approved in 2023 that will be implemented during this year and the coming years.
Development Planning Initiatives
In the field of development planning, the Ministry of Economy is working on a number of initiatives and projects, foremost of which are the draft development planning law, the evaluation and follow-up manual, the national system for follow-up and evaluation, in addition to the electronic system for the development budget, the procedural manual for development planning, the guide to preparing public policies, in addition to developing the Omani macroeconomic model, and the mid-term evaluation project of the tenth five-year plan.
Sustainable Development
With regards to the efforts of the Ministry of Economy in achieving the Sustainable Development Goals (SDGs) 2030, the Ministry said that the National Committee to achieve the sustainable development goals has been formed. The Committee is working on several projects, including a project on preparing the second voluntary national report to follow up the achievement of the sustainable development goals 2030, issuing the second issue of the central dashboard for sustainable development goals, and participating in local, regional and international relevant events.
The targets of the Ministry of Economy in achieving Oman Vision 2040
In order to achieve the objectives of Oman Vision 2040, the Ministry of Economy contributes to achieving about 21 main indicators that it shares with the relevant government entities, the most prominent of which are the economic growth rate, the contribution of non-oil sectors to the GDP at fixed prices, and the contribution of small and medium enterprises in the GDP, in addition to a number of international indicators, which the Economic Complexity Index is among them.
Oman`s Competitiveness
Regarding the most important international indicators monitored by the National Competitiveness Office, the Office supervises the follow-up of the performance of the Sultanate of Oman in 13 international indicators, including 7 main indicators and 6 secondary indicators.
Among the indicators in which the Sultanate of Oman has made progress in are the Economic Freedom Index, in which the Sultanate of Oman ranked 95 out of 184 countries in 2023, the Soft Power Index ranked 46 out of 121 countries, and the Food Security Index where Oman ranked 35 out of 113 countries. While the Sultanate of Oman recorded a limited decline in the Economic Complexity Index by 4 ranks to reach 73 according to the 2022 report, out of 134 countries, and recorded a decline in the Global Innovation Index, where it ranked 79 out of 132 countries in 2022.
Economic Diversification Sectors
On the performance of the economic diversification sectors compared to the target values in 2025, the contribution of the manufacturing sector to the GDP at fixed prices reached 9.7% in the first half of this year compared to the target value of about 11.8% in 2025, while the contribution of the transport and logistics sector reached 5.9% compared to the target value of 7.3% in 2025. In the food security sector, the contribution of agricultural wealth activity exceeded the target value of 1.2% to reach about 1.5%. On the other hand, the contribution of fisheries activity was about 0.8% compared to the target of 1.7%. For the mining sector, it exceeded the target value of 0.6%, making a contribution of 0.7%, while the tourism sector contributed about 2.4% in 2022 compared to the target values of 3% in 2025.
Governorates Development Program
The Ministry is working to accelerate the development of the governorates` economy and expand the scope of programs and projects that the governorates intend to implement, as the number of development projects funded by the allocations of the Governorates Development Program reached 606 projects in the governorates` plans. Among the key initiatives that the Ministry is working on in the program are the Governorates Development Index Project and the Governorates Performance Evaluation Project.
Behavioral Economics
During the meeting, Dr. Salim Al-Sheikh, Director General of Research and Development Studies, reviewed economic programs and initiatives in various fields that the Ministry of Economy is working on.
A;-Sheikh said that the Ministry of Economy is working on a set of projects related to behavioral economics, the most important of which is the development of practical manuals on behavioral economics, the professional diploma in behavioral economics, and the provision of institutional consultations in this field in addition to participating in a number of government initiatives and projects. The "Behavior Change Challenge" initiative will be launched during the coming period with the aim of finding solutions and alternatives to some challenges using behavioral economics tools and methodologies.
AI-based National Economy
Dr. Salim Al-Sheikh also referred to the executive position of the Initiative for the AI-based National Economy, which is a national initiative aiming to enable and encourage the investment and integration of artificial intelligence applications and technologies in development projects and programs in the economic diversification sectors specified in the tenth five-year development plan. The total number of projects reached 18 projects, and the number of entities that submitted artificial intelligence projects is 11 entities. Work is currently underway to evaluate and approve these projects for real.
Research, Reports and Development Studies 2023
The Ministry of Economy is also working on a number of studies and policy papers such as: "Studying the cost of basic services in light of the redirection of government subsidies and their impact on the competitiveness of companies operating in the Sultanate of Oman", "Ways to achieve the targeted economic growth in Oman Vision 2040", "Measuring total productivity in the Omani economy" and studying "Economic returns and costs to reach carbon neutrality 2050", as well as working on a project to prepare the national policy for the knowledge economy.
International Economic Cooperation
With regards to international cooperation, the Sultanate of Oman has signed 34 agreements on the encouragement and reciprocal protection of investments between the Government of the Sultanate of Oman and other countries of the world. At the Arab level, the Sultanate signed the Arab Agreement for the Liberalization of Trade in Services among Arab Countries
At the GCC level, the Ministry participates in the Gulf negotiating team in free trade agreements with some countries, and a draft memorandum of understanding is being carried out between the Ministry of Economy and the Saudi Ministry of Economy and Planning in the field of economy and planning. This is in addition to participating in G20 meetings in India and signing the Trade Preferential System Agreements of the Organization of Islamic States (COMCEC).