18 minute read
Interview with H E Qais bin Mohammed Al Yousef, Oman Minister of Commerce, Industry & Investment Promotion
Oman -
His Excellency Qais bin Mohammed Al Yousef, Oman Minister of Commerce, Industry & Investment Promotion, discusses strengthening Oman’s competitiveness, attracting FDI, the sultanate’s investor residency programme and more in this exclusive interview with Mayank Singh, Oman Economic Review.
You have been Oman’s Minister of Commerce, Industry & Investment Promotion for just over 12 months in what can only be described as challenging times.
First of all, may I say how truly humbled I am to have been granted the honour and privilege of serving the people of Oman as Minister of Commerce, Industry & Investment Promotion. I thank His Majesty Sultan Haitham bin Tarik for placing his trust and confidence in me. Of course, the COVID-19 pandemic has clearly highlighted the fragile nature of markets, supply chains and employment worldwide.
In a very short period, the context in which we operate, and conduct business has changed dramatically. However, throughout these challenging times ministry staff have continued to engage with international companies, showcase magnet projects to attract foreign investment, help local companies build resilience while responding to new market conditions, investigate unfair business practices as well as promote Oman made goods and services. In fact, our future prosperity depends on this important work.
Of significance too is the work ministry teams do to build and develop the pro-enterprise economy we want – one that is sustainable, productive, hi-tech, prosperous, globally traded and competitive. It is important to acknowledge their perseverance and dedication in this regard. Individually and collectively, they have worked tirelessly in taking the ministry’s mission forward. This is a talented, committed and ambitious team, determined to make a positive difference to Oman and for Oman. Their can-do attitude during these unique and difficult times has been nothing short of inspiring.
Despite the challenges of the past twelve months, I am pleased to be able to say we have made considerable progress in nurturing a more pro-business environment here in Oman, one that is open, bold and fit for the future. It is an environment that builds on a decade of strong investment in world-class infrastructure and capitalises on local ambition and talent. Indeed, I am inspired each day by the potential of Oman and its people.
Over the course of 2021, the government put in place a number of measures to support local businesses navigate the ongoing COVID-19 crisis. Could you talk us through those?
I have had many, many conversations with businesses, business representative organisations and SMEs from across Oman since I took on my role at the ministry in August 2020. It is clear that this has not just been a tough year, but the toughest of years, not least for those in the retail, hospitality and leisure sectors. His Majesty’s Government remains focused not just on protecting people’s health but rolling-out policies and initiatives that safeguard livelihoods and help businesses pull through the pandemic. Looking ahead, we are putting in place measures to aid the post COVID-19 recovery and boost Oman’s competitiveness. In particular, this includes Oman Vision 2040, the sultanate’s long-term diversification strategy, the Economic Stimulus Plan (ESP) together with the Medium-Term Fiscal Plan (MTFP) 2020-24 and the 10th
Five Year Development Plan (FYDP) 202125. The ESP supports the economy by offering interest-free emergency loans, tax and fee reductions and waivers, the flexibility to pay taxes in instalments and the establishment of the Job Security Fund to support citizens who lost their jobs. The Central Bank eased financial conditions through lower interest rates and liquidity injections, deferred loan payments and relaxed requirements on capital buffers and liquidity ratios. In fact, the ESP is a direct result of crucial conversations with businesses. It aims to help Omani business owners, entrepreneurs and workers right across the sultanate. The plan reduces land rents on the Special Economic Zone at Duqm and Madayn industrial estates by 25% for the period 1 January 2020 - 31 December 2022. A 50% reduction in fees for environmental licenses renewed in 2021. It also contains provision for foreign companies to own land over 5,000m2 or leased land that is either commercial or commercial residential, tourism or industry related. Let me be clear, these are historic steps taken to ensure the right support is in place for Omani businesses - to help firms get through the crisis, protect and create jobs, rebuild Oman’s economy and secure the sultanate’s economic future.
What reaction have these measures had from the international community?
I am pleased to say that this has been positive. As an example, let me share with you the response of the IMF after a virtual mission earlier this year to review economic developments and the outlook for the sultanate. The IMF’s Article IV Report statement on Oman reads upbeat, welcoming the strong and decisive leadership of His Majesty Sultan Haitham bin Tarik and the economic reform measures he set out in the MTFP. It notes Oman’s considered and ambitious approach to driving greater economic efficiency across the
economy, putting expenditures on a sustainable path, reducing bureaucracy, boosting public-private partnerships, increasing non-oil exports as well as attracting foreign investment. The report recognises the government’s prioritisation of the steadfast implementation of structural reforms to promote economic diversification and job creation for Omanis as well as support fiscal and external sustainability. Oman Vision 2040, the ESP, MTFP and 10th FYDP are helping us embrace change and rise to the challenges of a rapidly transforming world, improving our business appeal and competitiveness. In fact, Oman climbed ten places (68th) in The World Bank’s 2020 Ease of Doing Business Index. In cross-border trade, the 2020 Index ranked Oman 64th globally and first in the GCC. While in ‘starting a business activity’, the sultanate is ranked 32nd globally and second in the GCC. This is a notable achievement.
What would you say are the pillars of Oman’s competitiveness?
Although we are commonly known for our oil and gas industry, our business strengths do not stop there. Today, Oman is delivering a better than ever pro-business environment, making it even easier for investors to take advantage of the great opportunities that exist in Oman’s logistics, manufacturing, tourism, agriculture and fisheries, healthcare, education, mining and clean energy sectors. We are too an important centre for industrial innovation and hi-tech start-ups as well as home to food, metal, fragrance, cable, battery and marble brands that are enjoyed the world over. Combine all this with our young, educated talent base, excellent transport links, world-class industrial estates, free zones, deep-water ports, awarding-winning airports and globally ranked broadband and internet infrastructure and I think you begin to have a clear picture of why Oman has a distinct competitive advantage. Having said that, it is not just the business side of Oman that separates us from other destinations. Our cosmopolitan, vibrant community is reflected in Numbeo’s 2021 Quality of Life Index, which ranked Muscat the number one city in Asia and the Middle East for quality of life and 10th worldwide for safety and security. We understand that as talent becomes more mobile and competition to attract it is stronger, quality of life is a major consideration for companies when deciding where to invest. Housing, schools, recreational and cultural amenities and healthcare are all on their radar, along with cost of living, transportation, crime and safety and climate. As the Numbeo Index suggests, we are a welcoming, open and attractive place to live and, for all those reasons, it is an easy place for people and businesses to set up and thrive.
Can you share with us some of the steps taken to improve Oman’s investment environment?
When we talk about attracting investment, it is important to first consider the global situation. According to UNCTAD, FDI flows plunged globally by 35% in 2020, to US$1 trillion from $1.5 trillion in 2019. Bear in mind the downturn caused by COVID-19 follows several years of negative or stagnant growth. As such, the health crisis we are experiencing compounds a longer-term declining trend. Looking ahead, global FDI flows are expected to bottom out in 2021 and recover some lost ground with an increase of 10% to 15%. This would still leave FDI some 25% below the 2019 level. Current forecasts show a further increase in 2022, which at the upper bound of projections bring FDI back to the 2019 level.
On the domestic front, FDI in Oman end of Q2 2020 stood at RO15.4bn (US$39.8bn) an increase of 13.2% compared to the same period in 2019. We understand the effects of the pandemic on investment will linger and investors are likely to remain cautious in committing capital to new overseas productive assets. We know when investors look at Oman’s potential they consider our economy, connectivity, infrastructure, access to markets, talent pool and lifestyle offer. But experience has shown us that the deciding factor in investment decisions is how agile and business friendly we are, how we turn investor aspirations into reality. Thus, our agility in responding to the new demands of a post COVID-19 world, removing layers of bureaucracy, for example, will be critical to our continuing and future success. In this regard, Invest Easy is just one example of our response - simplifying the process of registering a new business, reducing procedures and time to complete investor transactions. Today, via Invest Easy, investors can obtain approval for more than 1,500 different economic activities – that is about 88% of all total economic activities - issuing one single document that includes all licenses and approvals from ten leading authorities. I am pleased to say that since the launch of the new Licensing approval service this April, over 40,555 applicants have already received automatic approvals – that is a number to be proud of. The Invest in Oman portal is another notable investment tool. Dedicated to driving and facilitating foreign investment into the sultanate, it lists potential investment opportunities from both the public and private sector. Launched just over a year ago, we believe it has been particularly useful connecting Omani project owners with investors from the international business community during the travel restrictions of the pandemic.
As a result of the pandemic, we are seeing changes in consumer behaviour. For example, the rise in popularity of local goods and services. How have you capitalised on this?
The pandemic has accelerated a number of consumer trends – for instance, there has been a marked increase in e-commerce, online shopping, an appetite for virtual experiences, more adoption of home deliveries and widespread support for Omani businesses, products and services. Perhaps more interesting is the evidence that these emerging trends are here to stay. According to research by consulting firm Kantar involving 45,000 consumers across fifty markets, COVID-19 is driving a surge in localism, with 65% of consumers preferring to buy goods and services from their own country. This rise in localism is particularly apparent in the food industry and presents an opportunity for Omani companies to shine and capture domestic market share. Capitalising on this shift in consumer sentiment, the ministry, in partnership with the SME Development Authority, Oman Chamber of Commerce & Industry, Madayn and a number of key public and private sector players, ran a month-long ‘Omani Products: My Choice’ campaign, December 2020. The idea was to encourage people to think, buy and eat local and raise awareness of popular everyday products they might not have realised were made right here in the sultanate. I am happy to report that the overall economic impact of the campaign was impressive. If the pandemic has inspired anything positive, it has reinforced our sense of togetherness. Let us not forget, Oman has always been a place where people pull together, where people support each other, collaborating and contributing to help everyone thrive. To carry forward the campaign’s momentum, we have formed a permanent committee to support and promote local industry, products and services across the sultanate – helping people understand the quality and range of things made in Oman. The committee will also educate on the impact buying local can have on our economy and job creation.
We have also seen an increase in the number of new start-ups and industrial licenses. What do you put this down to?
The ESP along with other SME support packages have triggered an uptick in the number of new businesses. Set up by entrepreneurs, many of these businesses are responding to the changing needs of a socially-distanced Oman, such as online retail, home delivery services, app development, social media marketing and virtual fitness classes. There is reason for optimism for their long-term success as, though
counterintuitive, some of the world’s bestknown businesses, brands such as Uber, Disney, Airbnb, FedEx, Microsoft and WhatsApp all rose out of tough economic times. As consumer confidence returns, so will spending, with revenge shopping sweeping through sectors as pentup demand is unleashed. That has been the experience of all previous economic downturns. In 2020 alone, 12,176 industrial licenses were approved - inclusive of both new and renewal licenses - as compared to 9,161 in 2019 – an increase of 32.9%. At the end of June 2021, we saw the number of SMEs registered with the SME Development Authority rise to 54,804, an increase of 23.2% compared to June 2020. While on the whole, the pandemic has proven devastating for small businesses worldwide, we will take good news where we can find it and the positive trend in entrepreneurship could bode well for job growth and economic activity once recovery takes hold.
Given the pandemic’s impact on global trade should Omani businesses re-think international markets and what role do you see for manufacturing going forward?
On the export front, the pandemic has shown what happens when sectors and industries are overly reliant on certain markets for their export revenue. We are, and must always remain, a strong trading nation - we have historically exported to over 130 countries - but we will need to look at greater diversification of both our export and import markets to make sure we are prepared for any future shocks to trade networks. Looking ahead, we want Omani businesses of all sizes and types to think of themselves as exporters from the very outset. In partnership with public sector stakeholders, we will be looking to give businesses the right tools and create the right conditions to help our non-oil exporter numbers grow. Our economy depends on it. Going forward, the 10th FYDP (2021-25), which effectively kicks off Oman Vision 2040, offers a clear-cut economic roadmap, assigning manufacturing a significant role in Oman’s economy with its GDP contribution projected to rise from 10.71% in 2021 to 15% by 2040. We recognise that a vibrant Omani manufacturing base leads to more research and development, innovation, productivity, exports and jobs. It also helps raise living standards. As we seek to recover from the pandemic, our economy will need manufacturers to continue to step-up and boost productivity, to power economic growth and create opportunities in every region of the sultanate. A digital, global and sustainable future post COVID-19 is possible, but it will require significant effort and close public-private cooperation. The road ahead may be bumpy, as many of our biggest export markets will take time to fully recover from the pandemic; however, history teaches us that a strong industrial base provides the foundations needed to create a prosperous society.
The crisis triggered by the COVID-19 pandemic has shown us that things can and must be done differently. How do you see the ‘next new normal’ unfolding?
The next ‘normal’ is going to be different. It will not mean going back to the conditions that prevailed in 2019. As I mentioned earlier, the pandemic has ushered in changes to consumer behaviour, for example, increased digital adoption and online shopping, buying more locally produced goods and an increased awareness of environmental and sustainability issues. I would expect these trends to continue in the post-COVID-19 world. In fact, recent Accenture research reveals that 74% of consumers aged 18 to 39 want businesses to take a stand on issues important to them. While 47% expect brands to translate values and promises into new and innovative products and services. This research illustrates the point that companies succeeding in the post-pandemic economy will be those that embrace sustainability and integrate a truly authentic, activated purpose. Indeed, in the months and years ahead, sustainability will not be an add-on for Omani companies but will be about building competitive advantage, getting ahead of new carbon taxes, attracting investors and responding to the growing demands of eco-conscious consumers.
Your Ministry has recently launched a new investment residency programme (IRP) for expatriates; what is the thinking behind the initiative?
The IRP has been designed to attract high-impact foreign investment, talent, help create jobs and enhance economic growth. The IRP offers two extended residency programmes through real estate and commercial investment on a renewable five and ten-year basis subject to applicants meeting specific criteria. This initiative is a demonstration of Oman’s strong commitment under the wise leadership of His Majesty Sultan Haitham bin Tarik to opening up new routes for investment in the wealth of opportunities presented by Oman Vision 2040. Alongside other enhancements to the sultanate’s commercial environment such as the provision of quality digital services and the streamlining of procedures and processes, this landmark program shows Oman’s determination to become ever more globally competitive, increase trade, strengthen industry and empower our business community. The pandemic is reshaping economic geography and businesses as well as people are rethinking their real estate needs and physical footprints, reimagining how and where they live, work and invest. The Government’s innovative pathway to extended residency is a direct response to this trend and an important decision not only for foreign direct investment but also for attracting valuable human capital to Oman, boosting the highly skilled sectors key to the ambitions of the sultanate’s diversifying economy. We understand that successful places of the future will be those that engender an environment in which creative and innovative people can make a home, raise a family and pursue a rewarding career. In this respect, we are confident the introduction of the IRP will make Oman even more attractive to business, investors as well as talent.
Can you tell us a little about Oman’s participation in Expo 2020?
I am proud to say Oman’s pavilion - inspired by the frankincense tree - has been designed by two young talented Omani architects, Rihab Al Zakwani and Alya Al Battashi of Adi Architecture. Our presence at Expo 2020 offers us an unparalleled opportunity to raise Oman’s profile as an exceptional destination, not only for business and investment, but also for culture and tourism. We look forward to welcoming visitors from all over the world to our pavilion.
A final word for our readers?
Let us remember that Oman’s reputation as a trusted trading partner remains strong and the pillars of our competitive offer – location, talent, infrastructure, connectivity, proenterprise environment and ambitious leadership – are unchanged. We are committed to building a revived, rejuvenated, resilient, digitally driven economy.
Prior to his appointment as Oman’s Minister of Commerce, Industry & Investment Promotion, His Excellency Qais bin Mohammed Al Yousef Qais bin Mohamed Al Yousef served as Chairman of Oman Chamber of Commerce & Industry and was also a member of the board of the ABCC.
We thank Oman Economic Review for this interview, which was first published in October 2021.
122 years of the
National Bank of Egypt
NBE enjoys a substantial international rank, as reflected through its presence in London (NBE United Kingdom Limited), Khartoum (NBE Khartoum), and its branches in New York and Shanghai. The bank also has representative offices in Johannesburg, Addis Ababa, and Dubai.
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As a foundational financial institution in society, NBE will proudly continue to uphold its stalwart function in the national economy and consistent support of the Egyptian people.
Established on June 25, 1898, the National Bank of Egypt is the first and largest commercial bank in the Egyptian banking sector with a paid-up capital of EGP 50 bn (£2.4bn) and an issued capital of EGP 100 bn (£4.8bn), making it also one of the largest banks in the MENA region. The Bank is owned by the Egyptian government, having been nationalized in 1960.
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