Oman Nation on the move

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Heartiest felicitations to His Majesty Sultan Haitham bin Tarik and the people of Oman the occasion of the 50th National Day of the Renaissance

Late His Majesty Sultan Qaboos bin Said

His Majesty Sultan Haitham bin Tarik

HM SPEECH

“In the name of the Allah, the Most Gracious, the Most Merciful “Our Lord! Bestow on us Mercy from Thyself, and dispose of our affair for us in the right way!”

Praise be to the Almighty Allah as truthfully as He deserves. Prayers and peace be upon the best of his beings – our Prophet Muhammed– and upon his hallowed family and companions, and upon those who follow them courteously until the Day of Judgement. Peace, mercy and blessings be upon you.

Dear honorable citizens, Our dear nation has lost on the 10th of January the dearest and finest of its men, the founder of its modern state and renaissance, the man of wisdom and peace, the icon of tolerance and harmony, the late His Majesty Sultan Qaboos Bin Said Bin Taimur, May Allah rest him in the abodes of the pious and righteous in Paradise. We can but say what the Almighty Allah has ordered us to say “To Allah We belong, and to Him we shall return”. This loss has had a profound impact on our hearts. We have, however, received it with hearts submitted to the will of Allah, with patience and endurance. Over the past weeks, we have followed expressions of your noble sentiments towards the late Sultan.

You bid him adieu with prayers, pleadings, and gratitude, while at the same time recalling his great achievements and eternal legacy which will remain a source of national pride for our dear Oman, both now and in the future. They will also continue to inspire the coming generations who will derive meanings of loyalty, self-denial in serving the nation, and preserve its values and gains, as well as ways of safeguarding its security and stability, and contributing to its development and prosperity.

Your manifestations of love and loyalty to the late Sultan, may Allah have mercy on his soul, has had great impact on us, and has strengthened our patience and fortitude. We commend these noble feelings and sincere prayers. We plead to the Almighty Allah to protect you in His divine care. We also extend our thanks to our brethren leaders of the Gulf Cooperation Council and other Arab states, and friendly countries, international and regional organizations, civil society organizations, and different peoples of the world, who have all shared our grief on Oman’s dearest departed soul.

The massive influx of world leaders, delegates of international agencies and organizations reflected a global recognition for the late Sultan’s international status, and the Sultanate’s prominence, which he devoted all his life to achieve.

Loyal people of Oman, Throughout our country’s glorious history, the world has known Oman as an influential cultural entity, which promoted the region’s growth and prosperity, and security and peace. Generations were keen on taking turns in upholding its banner so that Oman’s message of peace would continue to roam the world, carrying a great heritage and noble goals, building and not demolishing, rapproaching and not distancing. We are committed to sustain this approach, with you and by you, so that we could together perform, with firm will, our cultural role and historic mission. The past five decades have witnessed a great transformation in building a modern state, establishing advanced infrastructure, all over the country, under the leadership of the architect of modern Oman, the late His Majesty Sultan Qaboos Bin Said Bin Taimur, and with the efforts of loyal people of Oman.

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We would like to voice our appreciation for their endeavours to promote Oman’s prosperity and stature.

We will proceed along the path of development and we will continue the blessed renaissance march as the late Sultan wished it to be. Conscious of the immense responsibility, we reaffirm that Oman will always remain our supreme goal, in all actions and pursuits. We call upon all citizens, without exception, to safeguard the gains of the blessed renaissance, and effectively contribute in maintaining the triumphant parade, relying on the Almighty Allah’s assistance and support.

Dear people of Oman, Our government will follow up progress in various sectors, including small and medium enterprises, and entrepreneurship, particularly those based on innovation, articial intelligence, and advanced technology. This is in addition to training and enabling youth to benefit from the opportunities made available in this vital sector, so that it could form a cornerstone in the national economy. We will also accord full attention and support to develop a comprehensive national framework of recruitment, considering it one of the fundamental pillars of the national economy. This necessitates the continuous improvement of employment environment in both public and private sector. Moreover, it requires revising and developing employment systems in the government sector, adopting new employment systems and policies that grant the government the flexibility and the ability that enable it to achieve optimal use of national resources, expertise and competencies, and to accommodate the largest volume of job seekers, enabling them to join the labour market to secure their stability and meet their expectations— thereby rounding up the tasks of development. Nation building and development are a public responsibility that requires the commitment of all, without exempting any one from their role, in their respective specialties, and within their capabilities. Oman has been founded, and its civilization has been established through the sacrifices of its people who used their utmost in preserving its dignity and strength, exhibiting their loyalty in performing their national duties and advancing national interests to personal interests.

This is what we are resolved to consolidate and protect, so that we could attain the level of development that we aspire for, the prosperity which we will work to realize and the decency that must prevail in all sectors and become firm grounds for all that we will do. We are proud that the citizens and residents in our dear country live, thanks be to Allah, in the purview of the State of Law and Institutions, a state built on the principles of freedom, indiscrimination, and equal opportunities, a state established on justice and dignity of individuals whose rights and liberties are secured therein, including the freedom of expression that is guaranteed under the Basic Law of the State.

HM SPEECH

Citizens’ partnership in molding the country’s present and future is a basic pillar of national action where we hope that women will enjoy their rights as guaranteed by law, and that they will work in different fields along with men, in serving their country and society. We reiterate our continuous patronage of these national fundamentals which cannot be compromised.

Dear loyal people of Oman, The elevation of Oman to the level of your aspirations and expectations in all fields will be the theme of the next stage, with the will of Allah. We will keep our eyes fixed on the supreme interest of our country, furnishing all means of support and empowerment to that effect. As we vow to the Almighty Allah that we will dedicate our life for Oman and its citizens, to continue its triumphant march and blessed renaissance, we call upon you to vow to Allah to do so. We are absolutely confident in your ability to deal with the requirements of this stage and the stages to come, with necessary clear vision, profound wisdom, solid determination and great sacrifices. In conclusion, we would like to express our deep thanks and gratitude to all personnel of our armed forces, across all military and security sectors, who shoulder the responsibility of defending this dear homeland and its gains.

We reaffirm our care and attention to them, so that these sectors will remain this country’s bulwark that protects this country from end to end. We would like also to commend both the production and civil service sectors which sustain economic activity and provide necessary services to citizens and residents on this benign land. We would also like to extol the private sector’s commendable role in the national development, hoping that this sector will maximize this role. Our full gratitude and appreciation for every hand that participates in building Oman.

As we thank the Almighty Allah for the riches and bounties which he bestowed on us, we pray to Him to help us to bear this great responsibility. We also pray to Allah to grant us success and protect Oman and its loyal people.

Our wishes of peace and blessings to you all.”

(The speech delivered by His Majesty Sultan Haitham bin Tarik on 23rd February 2020)

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INTRODUCTION

FIVE DECADES OF ECONOMIC RESILIENCE

F

ifty years ago, Late His Majesty Sultan Qaboos bin Said created a vision for a self-sustained nation capable of competing with the developed countries of the world. After his death in January this year, the new sultan His Majesty Haitham bin Tarik has been navigating the country towards greater transformations.

Successfully dealing with the challenges that the pandemic Covid-19 has caused, the country is making significant strides in various sectors under the supervision of His Majesty; and fulfilling the attributes of the Oman’s Vision 2040.

With many large-scale infrastructure projects, road links that have facilitated connections and trade between various regions, the three large seaports in Salalah, Sohar and Duqm that have driven economic growth and facilitated diversification, the airports constructed since 1970 serving both local and international business and leisure travelers, the Sultanate has managed to keep the growth pace and work towards a greater goal to realize the Vision 2040.

Thanks to the diversification efforts, sectors such as

mining, manufacturing and logistics have added to the revenues, along with energy and oil. The private sector is playing a major role in enhancing the business environment and has helped Oman in the industrial development of the nation.

The impact of the pandemic has affected many sectors, especially energy and tourism, but the Sultanate’s rapid response strategy to Covid-19 has helped in stabilizing the economic momentum.

In this 2020 edition of OMAN – A NATION ON THE MOVE we update readers on the achievements in various sectors such as oil and gas, tourism, infrastructure, ports, telecom, real estate, manufacturing, logistics, banks and financial services, and more. The viewpoints put forth by the ministers chronicle the progress made by the country, and is an in-depth analysis of the measures taken by Oman to negotiate a challenging economic scenario and the reforms that have helped to boost the nation’s growth.

We would like to take this opportunity to congratulate His Majesty Sultan Haitham bin Tarik and the people of Oman on our beloved country’s 50th year of National Day of the Renaissnance. May Oman prosper and progress under His Majesty’s visionary leadership.

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Our sincere felicitations to HIS MAJESTY SULTAN HAITHAM BIN TARIK and the people of Oman on the 50th National Day of the Renaissance

Opera Galleria, Royal Opera House Muscat, Shatti Al Qurum, Sultanate of Oman, Tel.: (+968) 24404240, Email: lalique@omantel.net.om Salalah Gallery, Oman Avenues Mall, Tel: (+968) 24593737

l a llalique.com ique.com

CONTENT

17 VISION 2040

32 GROWTH DRIVERS – DUQM, SOHAR & SALALAH

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28 SMEs DEVELOPMENT

38 GREEN ENERGY

44 OIL & GAS

On the occasion of the 50 National Day of the Renaissance, we extend our heartiest congratulations to th

His Majesty Sultan Haitham bin Tarik and the people of Oman.

We renew our pledge of allegiance and loyalty and pray to Allah the Almighty to protect and grant His Majesty good health and happiness, and to perpetuate blessings of success and progress upon the people of Oman.

‫ﻧﺮﻓﻊ أﺳﻤﻰ آﻳﺎت اﻟﺘﻬﺎﻧﻲ واﻟﺘﺒﺮﻳﻜﺎت‬ ‫إﻟﻰ اﻟﻤﻘﺎم اﻟﺴﺎﻣﻲ ﻟﺤﻀﺮة ﺻﺎﺣﺐ اﻟﺠﻼﻟﺔ‬

‫اﻟﺴﻠﻄﺎن ﻫﻴﺜﻢ ﺑﻦ ﻃﺎرق اﻟﻤﻌﻈﻢ‬ ‫ ﺣﻔﻈﻪ ا ورﻋﺎه ‪-‬‬‫ﺑﻤﻨﺎﺳﺒﺔ اﻟﻌﻴﺪ اﻟﻮﻃﻨﻲ اﻟﺨﻤﺴﻴﻦ ﻟﻠﻨﻬﻀﺔ‬ ‫أﻋﺎده ا ﻋﻠﻰ ﺟﻼﻟﺘﻪ أﻋﻮاﻣ ًﺎ ﻋﺪﻳﺪة‬

‫‪Warmest Greetings to‬‬

‫‪His Majesty Sultan Haitham bin Tarik‬‬ ‫‪and the people of the Sultanate of Oman‬‬ ‫‪on the joyous occasion of the‬‬

‫‪50th National Day‬‬ ‫‪of the Renaissance‬‬

CONTENT

52 BANKING & FINANCE

68 INSURANCE

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64 CAPITAL MARKET

72 EDUCATION

76 INFRASTRUCTURE

CONTENT

80 MANUFACTURING

94 TELECOM

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84 PORTS AND LOGISTICS

100 TOURISM

90 REAL ESTATE

104 AVIATION

Muscat Overseas Group

extends its warmest greetings to His Majesty Sultan Haitham bin Tarik on the occasion of the

th National day of the Renaissance

CONTENT

18 His Highness Sayyid Theyazin bin Haitham al Said

VIEWPOINT

20 H.E. Dr.Mohammad bin Hamad Al Rumhy Minister of Energy & Minerals

Minister of Culture, Sports and Youth

24 H.E. Eng. Said bin Hamoud bin Said al-Ma’awali Minister of Transport, Communications and Information Technology

22 H.E. Dr.Khalfan bin Said bin Mubarak al-Shueili Minister of Housing and Urban Planning

26 H.E. Tahir Salim Al Amri

Executive President, Central Bank of Oman (CBO)

CROWN JEWEL

59 TAAGEER FINANCE

60 BANK MUSCAT

66 OMINVEST

VISION 2040

MOVING FORWARD WITH CONFIDENCE Oman’s ambitious Vision 2040 strategy, first unveiled in 2018, seeks to catapult the Sultanate into the ranks of the world’s most ‘developed nations’

O

man’s vision for the future ‘Oman 2040’ was developed in line with the royal directives of Late His Majesty Sultan Qaboos bin Said.

The vision is relevant to the socio-economic context and objectively foresees the future, to be recognised by the Sultanate as a guide and key reference for planning activities in the next two decades.

In the words of His Majesty Sultan Haitham bin Tarik, “Oman Vision 2040 is the Sultanate’s gateway to overcome challenges, keep pace with regional and global changes, generate and seize opportunities to foster economic competitiveness and social well-being, stimulate growth, and build confidence in all economic, social and developmental relations nationwide.

“While identifying the national priorities, the vision focuses on reshaping the roles of and relation between the public, private and civil sectors to ensure effective economic management; achieve a developed, diversified and sustainable national economy; ensure fair distribution of development gains among governorates; and protect the nation’s natural resources and unique environment. Furthermore, the vision builds on the principles of citizenship and genuine Omani identity to modernise the educational ecosystem, support scientific research and innovation, develop healthcare regulations and services and lay the foundations for social well-being and relevant basic services for all segments of society.

“The vision has also attached great importance to governance and its related topics, given that it influences all national priorities in terms of enforcing oversight, ensuring the effective use of national resources, honouring principles of integrity, justice, transparency, and accountability; so as to boost confidence in

the national economy and promote competitiveness across all sectors under the rule of law.”

The strategy, first unveiled in 2018, seeks to catapult the Sultanate into the ranks of the world’s most ‘developed nations’.

The blueprint targets economic growth of around 5 percent annually over the 2021-2040 timeframe. This compares with average growth of 7.5 per cent during the 1970-1995 period, and corresponding average estimated growth of 3.5 per cent during the 1995-2020 span.

The Vision 2040 strategy represents the essence of a four-year-long exercise during which the task force reached out to an estimated 40,000 Omanis — young and old — as well as entrepreneurs, business persons, experts and professionals. This vision has been formulated based on inputs from Omani individuals, businesses and stakeholders representing all facets of Omani society. It encapsulates Oman’s current realities and future opportunities, and leverages our competitive strengths and advantages.

Striving to become a highly developed country, under the Vision 2040, Oman is moving ahead to build a productive and diversified economy, founded on innovation, integration of roles, and equal opportunities; leveraging Oman’s competitive advantages, driven by the private sector towards integration into the world economy and active contribution to international trade; to ultimately achieve inclusive and sustainable development, based on effective economic leadership that operates within an institutional framework of coherent and contemporary economic policies and legislations, to ensure financial sustainability and diversify public revenues.

In Oman’s vision for the future, the development of a favourable

environment is envisaged to attract talents in the labour market; where partnerships grow in a competitive business climate, comprehensive regional development is achieved through decentralisation, guided by the principle of optimal and balanced use of land and natural resources and the protection of the environment to bring about food, water and energy security. Smart and sustainable cities are built with advanced IT infrastructure; and socio-economic prosperity and social justice are nurtured in urban and rural communities.

The Vision lays down the foundations for an empowered knowledge based society whose members are creative, proud of their identity and culture, committed to their civic duties and values and living in dignity and sustained well-being; a society endowed with leading healthcare system, an active lifestyle and an inclusive education for lifelong learning to develop skills for the future, promote scientific research, build national capabilities and achieve economic growth and social well-being; in a State with flexible yet strong agencies, all-encompassing governance, effective supervision, swift justice, efficient performance, and active and ever-renewing media, aided by an empowered civil society that participates in all aspects of life, towards higher levels of human development.

Among the key performance indicators (KPIs) that must be met to achieve the Vision 2040 objectives are a number of economic targets. They include a commitment to raise real GDP per capita by 90 per cent, real GDP growth by 5 per cent annually, and the contribution of foreign direct investment (FDI) to GDP to 10 per cent. Furthermore, it envisions the share of non-oil activities to grow to more than 90 per cent of GDP, as well as a 40 per cent contribution to job creation by the private sector. The estimated 50,000 young Omanis entering the labour market every year, when suitably trained and developed, would help in the achievement of the Vision 2040 goals. These young Omani students represent 50,000 engines of growth. As per the vision, Oman also strives to be among the top 20 countries on the global innovation index and global competitive index by 2040.

To take the implementation of the vision forward, Sultan Haitham established the ‘Oman Vision 2040 Implementation Follow-Up Unit’ through a royal decree on 18 August 2020. In the vision document, His Majesty Sultan Haitham bin Tarik says, “All those who have had the privilege of participating in the making of the future vision, ‘Oman 2040’, will now join hands to realise its directions and goals, into a future bursting with ambitions, where each and every one has a role to play. Towards that future we shall move forward surefootedly, hastily and with confidence.”

VIEWPOINT

YOUTH – AND AN EMPOWERED FUTURE The government relies on youth for achieving progress and prosperity, as Vision 2040 focused on the importance of developing sources of knowledge and supporting youth national projects and initiatives

T

he event (Oman Youth Day) is being marked through solid conviction in the vital role of youth in carrying forward the banner of Oman’s renewed renaissance march. Through their hopes and aspirations, the Omani youth set standards for a brighter future to which they will contribute by promoting the Sultanate’s prosperity.

The Sultanate’s government has accorded a great attention to youth since the outset of the blessed renaissance, which provided them with all means that enable them to shoulder their responsibilities of elevating the edifice of development, which, in turn, accomplishes their goals and realizes their dreams. The Omani youth proved worthy of this immense national duty, armed with full awareness about the issues of the age.

Their pragmatism stems from undertaking the right methods of progress, with clear vision and steadfast resolve to participate in building a renewed renaissance that is open towards the culture of other, with the prime aim of coexisting in love, peace and harmony.

In pursuance of this wise tradition, the speeches and directives of His Majesty Sultan Haitham have laid emphasis on the significance of promoting youth and according them proper care, since they are the wealth and everlasting

His Highness Sayyid Theyazin bin Haitham al Said Minister of Culture, Sports and Youth

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resource of this nation. This attention culminated in the establishment of Ministry of Culture, Sports and Youth to serve as an overarching premise for youth ambitions, innovations and aspirations.

The government relies on youth for achieving progress and prosperity, as Vision 2040 focused on the importance of developing sources of knowledge and supporting youth national projects and initiatives, which, will contribute to upgrading the pace of growth by replicating the progress being witnessed by the world in the fields of Fourth Industrial Revolution (4IR), sciences and emerging economic activities.

The Ministry of Culture, Sports and Youth is pressing ahead with its programmes addressing the cause of youth, working in full integration with other government and private sector departments concerned in accordance with the farsighted vision of His Majesty Sultan Haitham Bin Tarik for grooming a generation capable of thinking, analyzing and innovation. The Ministry will devise appropriate mechanisms to explore the opinions of youth with a view to engaging them as true partners in future plans and programmes that earn them expertise and optimize the capabilities.

(Excerpts from the speech delivered by HH Sayyid Theyazin bin Haitham al-Said on Oman Youth Day 2020)

The establishment of Ministry of Culture, Sports and Youth serves as an overarching premise for youth ambitions, innovations and aspirations

VIEWPOINT

COMMITTED TO SUSTAINABLE DEVELOPMENT The Sultanate’s reserves of oil and gas are increasing due to the success in new discoveries and enhancement of production from the existing oil and gas fields

O

n 10th January of 2020, as you know, Oman bid farewell to our beloved father and leader, the architect of the modern Renaissance, ‘the dearest and the purest’ man of Oman ‘His Majesty Sultan Qaboos bin Said bin Taimur’, may Allah rest his soul in Paradise.

He left us after a 50-year journey dedicated to the building of Oman, May Allah have mercy on him. While he is no longer here with us, his memories will be vivid in our hearts and minds not only for what he achieved at the national level, for society and the Omani people, but also for what he accomplished at the international level and ensuring a place for Oman amongst the nations of the world.

Our consolation as good citizens is in our pure and profound belief in the will of Allah, the Almighty, and we believe that His Majesty Sultan Haitham bin Tarik -may Allah protect him - will be the best successor to his predecessor, follow the footsteps of the Late Sultan, and build on his achievements to ensure Oman achieves the prestigious position for which Sultan Qaboos had always worked and dedicated his life for.

As for the energy sector, with the blessings of Allah, we accomplished the objectives and met the expectations as desired and planned for by the Government of Oman in 2019. We continued leveraging our natural resources by focusing on ensuring the optimum utilization of our financial and human resources as well as modern technologies in the fields of exploration, production, transportation, exports, refining, petrochemicals and other oil and gas-based industries. Many significant achievements were also made in the electricity and renewable energy sector.

H.E. Dr.Mohammad bin Hamad Al Rumhy Minister of Energy & Minerals

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The Sultanate’s production capacity of oil and condensates now stands at about 1 million barrels per day for many years to come. Oman also produces about 120 million cubic meters per day of natural gas depending on demand. The Sultanate’s

reserves of oil and gas are increasing due to the success in new discoveries and enhancement of production from the existing oil and gas fields.

The success achieved in this sector will enable other sectors to enhance integration and economic diversification in the country with an emphasis on maximizing the InCountry Value (ICV) through training and employment of the national workforce, promoting local industries and enabling small and medium enterprises (SMEs) to participate in providing various services and qualifying some of them for technical and specialised work.

Among the important projects in the sector that entered into operations is the “Rabab Harweel Integrated”project, which will add more than 500 million barrels of oil equivalent to the reserves. The sector is also in alignment with Oman Vision 2040 aimed at economic diversification efforts.

Commercial operations of the Dhofar Wind Energy Project have already started in November 2019 as one of the major renewable energy projects in the Sultanate today. The project is expected to produce 50 megawatts to meet the electricity needs of about 16,000 homes in the Dhofar Governorate.

The project is part of the efforts to benefit from other natural sources of renewable energy available in the Sultanate to ensure sustainable sources of energy, good prospects for employment in this segment, a clean environment free from pollution and reduction of global warming, with the added aim of reducing the use of natural gas in electricity production and making use of this gas in other projects that benefit the Omani economy and contributes to its diversification. We hope that oil, gas and electricity sectors’ operations will continue to grow and support the objectives.

(Excerpts from the Ministry’s Annual Report 2019)

Heartiest felicitations to HIS MAJESTY SULTAN HAITHAM BIN TARIK and the people of Oman on the joyous occasion of the 50th National Day of the Renaissance Crystal Rock II Crystal Rock I

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VIEWPOINT

REDEFINING URBAN PLANNING The Ministry of Housing & Urban Planning strives to provide social and economic stability of society through sustainable urban planning for the establishment of integrated modern cities based on controlled real estate organization and a framework of transparency

T

he Ministry of Housing and Urban Planning seeks to contribute in cooperation with other sectors in the social, economic and urban development of the Sultanate, through the policy of providing lands of different uses and social housing programmes designated for a specific group of the society as well as real estate activities. The information below reflects the most important general indicators of this role during the year of 2019.

Town planning and survey During 2019, the Ministry prepared a number of schemes and plans through which it provided 54,827 plots of land with various uses distributed over the governorates in the Sultanate. The largest percentage of the planned lands were concentrated in the Al Dakhiliyah governorate with 17,944 plots of land with various uses. The land plots planned for residential use constituted the highest percentage of the total planned plots of land with 40,842 plots of land. The highest percentage was concentrated in the Al Dakhiliyah governorate also with 14,304 residential plots.

Lands distribution In 2019, the Ministry distributed 31,811 plots of land in the various governorates of the Sultanate.

The highest percentage of lands distributed was in Al Dakhiliyah governorate with 8,226 plots of land for various uses. The total number of residential plots of land distributed in the Sultanate reached 28,099. During the same period, 301 commercial plots, 756 residential-commercial plots and 348 industrial plots were distributed.

Ownership verification and registration

H.E. Dr.Khalfan bin Said bin Mubarak al-Shueili Minister of Housing and Urban Planning

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The Ministry has also formed committees for ownership verification and registration in all governorates to review the registered applications in order to preserve citizens’ rights by legal means and find solutions to all cases related to land claims to reduce the random and illegal lands holdings. Furthermore, the total number of

registered ownership verification and registration applications in 2019 reached 21,577 applications.

Al Dakhiliyah governorate recorded the highest percentage in the number of registered cases with 4,651 applications.

Real estate registrations The real estate recorded more than 388,000 transactions in the Sultanate during 2019. North Al Batinah governorate witnessed the highest number with over 79,000 real estate transactions and the total number of lands registered for the first time in the Sultanate in 2019 reached 58,076 plots of land with different uses. The total number of title deeds issued during the same period amounted to 211,191. Muscat governorate came first with 44,000 title deed issued.The total number of title deeds issued for GCC citizens reached 878. The real estate activity during the same year recorded more than RO 2.772 billion in all the governorates of the Sultanate.

Real estate development The Ministry approved a series of measures regulating the real estate sector in order to meet the growing demand of housing for all segments of the society and provide an appropriate environment through the establishment of integrated residential complexes.

These procedures included the regulation of the real estate brokerage profession and the system of owners’ associations, as well as studying the establishment of real estate development projects.

Social housing As for social housing programme, the total number of families benefiting from housing assistances programme during 2019 reached around 2,000 families with a total cost of more than RO 41 million.

Warmest Greetings to

His Majesty Sultan Haitham bin Tarik and the people of the Sultanate of Oman on the joyous occasion of the

50th National Day of the Renaissance

DHARAMSEY GROUP

VIEWPOINT

GIVING IMPETUS TO NATIONAL GROWTH The transport, communications and information technology sector impacts the growth of the other associated sectors and plays a vital role in the overall development of the nation

H.E. Eng. Said bin Hamoud bin Said al-Ma’awali Minister of Transport, Communications and Information Technology

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“N

ation building and development requires the commitment of all and is an individual responsibility that requires their contribution in the respective fields”, from these good words of His Majesty Haitham bin Tarik Al Said, may Allah bless him, we at the Ministry of Transport, Communications and Information Technology are inspired to work in cooperation and partnership with various segments of the society, including individuals, ministries and civil and government entities, to raise the nation and take it to the ranks of the developed countries.

The Ministry is determined to continue to implement the national and strategic projects through which we seek to serve the people and promote Oman on the global map. To begin with, some of the successful government projects include the construction of the network of asphalt and dirt roads connecting all the governances and willayats of the Sultanate. Towards the end of last year, more than 15767 km of asphalt roads and more than 17,135 km of dirt roads were constructed in the Sultanate. The other prominent projects include the Al Batinah Expressway and parts of the Al Sharqiyah Expressway that consists of tunnels, bridges and the dual carriageway on Barka-Nakhal road. And the Adam-Haima-Thumrait, which will be the longest dual carriageway in the Sultanate once completed.

In a pursuit to connect Oman to the world, the Ministry has implemented a number of important national projects such as building the new airports and ports, and assisting in the diversification of sources of income. In 2019, The Muscat International Airport won the Best Airport in the Middle East Award at the 26th edition of World Travel Awards. The Salalah Airport received a 5-Star Regional Airport Rating and won the Best Regional Airport Award, ranking Fourth worldwide, at the SKYTRAX World Airport Awards 2019.

The Ministry has been developing a number of national strategies to regulate the work in this

sector, including: national logistics strategy, national aviation strategy, public transport strategy, maritime management strategy, which are being implemented in cooperation with a number of relevant government and private entities. Oman has made remarkable progress in the logistics sector and has been ranked number one among gulf countries and number eight internationally, by the World Bank’s Cross-Border Trade Index, and other global indicators. The communications and information technology sector has been supporting and promoting social and economic development of the country and focuses on encouraging innovation, employing artificial intelligence and advanced technologies, and providing young people with the future skills to enable them to contribute to building the nation and progressing its prosperity.

The establishment of a unified government network and a number of specialized centers in the Information Technology and Communications industry, cybersecurity and e-authentication, in addition to the incubation of government websites, services and databases, and protect them from security hacks, which ensure the sustainability of business and IT services, and help individuals obtain on highquality and record-time electronic services. Thanks to Almighty Allah, Oman is witnessing a remarkable development in the information technology sector.

Compared to the 2018 scores, Oman has improved on all the 3 indices and is ranked 5th among the Arab countries and 2nd in the online services index. Oman has made into the elite Very High E-Government Development Index (EGDI) club for the very first time as it improved the rankings in the E-Government Survey 2020 of the United Nations. Oman improved to 50th rank globally. Oman has been ranked second in the Arab World in the Global Cybersecurity Index (GCI) 2018-2019 issued by the International Telecommunications Union (ITU).

(Excerpts from the speech by H.E. Eng. Said bin Hamoud bin Said al-Ma’awali, the Minister of Transport, Communications and Information Technology)

Congratulations and Best Wishes to His Majesty Sultan Haitham bin Tarik and the people of Oman on the occasion of the 50th National Day of the Renaissance

VIEWPOINT

RESILIENT TO CHALLENGES Banking sector in Oman has become strong, efficient and competitive and will continue to be an active and effective partner in supporting the country’s vision of diversifying the economy

H.E. Tahir Salim Al Amri Executive President, Central Bank of Oman (CBO)

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echnological developments are touching each segment of the ecosystem and the banking sector is certainly not left out in this regard. In Oman, the banking sector has always been ahead of the curve on the technology front, implementing cutting-edge technologies/ applications to improve customer service, safety and security of transactions, operational efficiency and productivity, financial outreach, etc.

Technology-driven applications, such as Internet banking, mobile banking, payments and settlement solutions and so on have transformed the banking business considerably in the Sultanate as it did in the world over the last few years.

Digitalisation trend

The Central Bank of Oman also facilitates the adoption of the latest technology in the banking sector by providing state-of-the-art efficient and secure National Payment Systems (NPS) infrastructure. As the banking sector in Oman has not shied away from embracing any new technology, I am sure that banks must be exploring the use of latest technologies on the anvil including artificial intelligence, blockchain, cloud computing and so on. Coming to the effects of regulation, the rationale behind financial regulation is to allow banks and financial institutions to conduct financial intermediation while ensuring the safety and stability of the financial sector as a whole.

The next wave in digitalisation, consisting of new technologies such as artificial intelligence and blockchain, is expected to improve operational efficiency and profitability further in the banking sector. Digitalisation, however, also brings new competition to banks from new players such as digital banks and Fintechs as it blurs the boundaries between digital and other services.

The regulatory practices have also evolved over time, turning more market-oriented wherein feedback received from the market has become critical for any decision making. In Oman, the financial regulations generally follow international best practices, such as Basel guidelines on capital requirements, risks, assets classifications, liquidity measures, etc., which are fine-tuned to the domestic economic and financial conditions.

All these regulatory practices have had profound transformative effects on the banking sector in terms of the ability to maintain resilience (adequate capital, lower risks, and profitability) while supporting economic activities. I am glad to share that the banking sector in Oman has become strong, efficient and competitive and it will continue to be an active and effective partner in supporting the country’s vision of diversifying the economy.

One of the main objectives behind increased digitalisation in the banking sector is to improve operational efficiency and profitability by reorienting business processes. Additionally, as the society is going digital, the banks know that failing to meet the customers’ expectations means losing to the competition. It is a fact that digitalisation involves a large investment in IT and related infrastructure, but it leads to improved banks’ profitability by enabling operations with a lighter cost structure. With digitalisation, banks are able to operate with fewer branches and personnel because the majority of services are automated.

Challenges facing the banking sector The banking sector in Oman is strong with adequate capital and a low level of non-performing loans.

Nevertheless, as the Omani economy is going through slowdown (on the back of low oil prices and Covid-19 related challenges), the banking sector will have to put extra efforts to keep the momentum going in business. It is commendable that despite varying economic conditions, the banking sector did not allow any considerable slip in their assets. Nonetheless, the banking sector will also have to observe extra prudence so that the quality of its assets does not deteriorate under the current macroeconomic conditions.

Another issue the banking sector may have to deal with is the competition from new non-bank players, especially fintechs. However, I am sure that banks in Oman operate on the frontier when it comes to technology and they will be able to covert this competition into a synergy for their growth.

(Excerpts from an interview with Oman Economic Review)

25 YEARS

OF VALUE CREATION FOR OUR SHAREHOLDERS

We follow the “private- equity model” for our investments, and invest in equities with growth potential.

We have been listed on the Muscat Securities Market since 1994.

Our key financial highlights are:

1995 - shareholders’ equity: OMR5.3 million 2020 - shareholders’ equity: OMR32.6 million Annualized growth of equity 9% Annualized return on equity 9.8%

MANUFACTURING

FINANCIAL SERVICES

Heartiest felicitations to

His Majesty Sultan Haitham bin Tarik and the people of Oman the occasion of the 50th National Day of the Renaissance

EDUCATION

EMERGING BUSINESS

Postal Address: Post Box: 468, Postal Code: 131, Al Hamriya Sultanate of Oman E-mail: info@alanwarholdings.com TEL: +968 24692503/24692504 FAX: +968 24692507, BLOOMBERG CODE: AAIT:OM Location Address: Villa No. 897, Way No. 3013, Shatti Al Qurum, Near Al Sarooj Filling Station Sultanate of Oman

SMEs DEVELOPMENT

A PARTNERSHIP APPROACH

Recognising the important role played by SMEs in economic development and employment generation Oman, has undertaken a series of initiatives to strengthen the sector

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n a major development related to Small and Medium Enterprises, a Royal Decree issued by His Majesty Sultan Haitham bin Tarik in August 2020 established the Small and Medium Enterprises Development Authority.

The decree also merged the Public Authority for Small and Medium Enterprises (Riyada) and the Al Raffd Fund with the new Authority. The new Authority will combine efforts to help SMEs in Oman. The Covid-19 pandemic, and precautionary measures taken by the Sultanate of Oman, have affected the normal operations of the business sector and given rise to various challenges. With a view to mitigating the effects of these precautionary measures on businesses and SMEs the government has introduced a number of relief initiatives to relax statutory and regulatory compliance for businesses.

Nearly 5,000 small and medium enterprises (SMEs) were set up in Oman between January and November 2019, according to National Centre for Statistics and Information (NCSI)

His Majesty Sultan Haitham bin Tarik issued Royal Orders to ratify an emergency interest-free loan for the categories highly affected by the pandemic in accordance with rules and regulations set by the Supreme Committee in June 2020. The categories eligible for such loans included entrepreneurs, especially the holders of the Riyada card, SMEs, and those who work for their own business and also beneficiaries of the Oman Development Bank loans and Al Raffd Fund.

various banking services and avoid introducing new fees in 2020. Other relief measures included the postponement of loan instalments/premiums for small and medium establishments, i.e. fees payable to Al Raffd Fund, for the next six months. Deferment of loan instalments/premiums payable to Oman Development Bank during the next six months. These steps have gone a long way in supporting SMEs and helping them in managing their financial and operational burdens.

Relief measures

The Al Raffd Fund has financed about 2,563 loans till April 2020 across the Sultanate’s governorates since its inception covering various economic sectors, with an amount exceeding RO 99mn. The Fund provided 4,229 direct job opportunities to Omani youths distributed among males (64.7 per cent) and females (35.3 per cent). Repayment rate has reached 83.9 per cent of the loan’s value. The number of Sanad centers for services - which are an important source of employment and SME development - increased in the first quarter of 2020 by seven per cent compared to the first quarter of 2019. Job opportunities in the centers too increased by 0.3 per cent during the first quarter of 2020 compared to same period in 2019 to reach more than 2,300.

On March 18, 2020 the Central Bank of Oman (CBO) announced a comprehensive incentive package to inject additional liquidity of more than RO8 bn into the economy. Key measures announced as part of the package included - Lower capital conservation buffers by 50 per cent, from 2.5 per cent to 1.25 per cent; increase the lending ratio/financing ratio by five per cent, from 87.5 per cent to 92.5 per cent, on the condition that this additional scope be reserved for lending to productive sectors of the economy, including the healthcare sector. Accept requests for deferment of loans/interest (profit for Islamic financial institutions) for affected borrowers, particularly SMEs, with immediate effect for the coming six months without adversely impacting the risk classification of such loans. Defer the risk classification of loans pertaining to government projects for a period of six months.

Local banks were asked to consider reducing existing fees for

Nearly 5,000 small and medium enterprises (SMEs) were set up in Oman between January and November 2019, according to

SMEs DEVELOPMENT

31 per cent of all SMEs in the country are in Muscat, North Batinah is home to 15 percent, Ad Dakhiliyah has another 12 per cent, and the Dhofar Governorate has 8 per cent of all SMEs

National Centre for Statistics and Information (NCSI). It shows that there were 42,163 SMEs registered in Oman as of the end of November 2019, an increase of 4,874 small and medium enterprises (SMEs) between the end of 2018, and November 2019. At the end of 2018, there were 37,289 SMEs registered in the country. The maximum number of SMEs were registered in the Muscat governorate (14,109), followed by the North Batinah (6,644) and Dakhiliyah governorates (5,370). Al Batinah South (3,121) and the Dhofar region (3,545) also had more than 3,000 SMEs each, while the Sharqiyah North (2,895) and Sharqiyah South (2,426) governorates both featured upward of 2,000 SMEs, as did the Dhahirah Governorate with 2,539 SMEs. A number of SMEs were also set up in the Buraimi (887), Wusta (463) and Musandam (164) governorates. In terms of percentage, the highest rise was recorded in the northern Musandam Governorate, which recorded an 18.8 per cent increase in the number of SMEs, the lowest in terms of per cent increase was in the Dakhiliyah Governorate, with a jump of only 10.1 per cent.

Overall, there was a 14.5 per cent increase in the number of small and medium enterprises established in 2019 in Oman. 31 per cent of all SMEs in the country are in Muscat, North Batinah is home to 15 percent, Ad Dakhiliyah has another 12 per cent, and the Dhofar Governorate has 8 per cent of all SMEs. The remaining seven governorates host the other 34 per cent of SMEs in Oman.

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SMEs have been leveraging opportunities around the circular economy and green manufacturing to grow. In addition, a range of programmes to facilitate workspaces, provide finance and start-up mentoring through the National Business Centre, Riyada and the SME Development Fund area is also helping them.

ICV led efforts Companies across sectors have been contributing their mite to SMEs as a part of their ICV efforts. Sharakah and BP Oman signed an agreement in October 2019 to launch the fifth version of Khazzan for SMEs Development programme. The programme is a result of the previous four years of collaboration with BP Oman in developing Omani SMEs as part of their Social Investment programme that aims to support the growth of the Omani SMEs. BP Oman and Sharakah selected the final 15 local small and medium enterprises to benefit from Khazzan for SMEs Development Programme’s 5th edition in January 2020.

The total number of applications received for this batch of the programme was 214 applications. Sharakah conducted an orientation workshop introducing the programme and its milestones for the 15 selected SMEs. The workshop was attended by representatives from Destination Sustainability, a local business that follows up the implementation of the programme, along with the selected SMEs. In February 2020, Petroleum Development Oman signed a deal to partner with four Omani SMEs. PDO entered into a contract with Oman Engineering Procurement & Construction (OmEPC), a joint partnership between four Omani SMEs Value Engineering Centre (VEC), Hamad Engineering Services (HES), Precision Engineering Consultancy (PEC) and Rock International. The phased contract is a part of the Oil and Gas sector’s In-Country Value (ICV) Blueprint Strategy launched in December 2013 in which PDO is supporting efforts in job creation and training as well as providing commercial and investment opportunities for local businesses.

The contract is valued at around RO10 mn during the first phase.

The Engineering, Procurement and Construction (EPC) contract is structured in three phases. The first is for three years and covers Engineering Services. Upon successful delivery, it will then be expanded to cover both Engineering and Procurement for a further three years and Construction Management will then be added at the end of year six.

Given the challenges of the ongoing pandemic and low oil prices SMEs will need to innovate to ride out of the crisis. It is important for them to be creative, harness technology, ecommerce and other available tools. They would also require to consult with those with experience in business continuity.

k

GROWTH DRIVERS – DUQM, SOHAR & SALALAH

SEZs - ANCHORING THE FUTURE Having garnered well over $100 billion in infrastructure, industrial and economic investment between themselves to date, the trio of Special Economic Zones in Duqm, Sohar and Salalah are uniquely positioned to power Oman’s economic diversification well into the future

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trategically located, Oman’s three preeminent free zone developments at Duqm, Sohar and Salalah are success stories in the making. All three are anchored by world-class, deep-water ports abutting vital shipping lanes that connect the Sultanate with maritime hubs around the globe. They have each capitalised on their distinctive value propositions to create for themselves niche market positioning that promise to underpin their success as engines of Oman’s economic growth.

Recently, however, the Omani government announced the establishment of an overarching agency to regulate the nation’s existing and future SEZs and free zone developments – a move designed to create a unified brand around the Sultanate’s Special Economic Zones. Royal Decree 105/2020 establishes a new Public Authority for Special Economic Zones and Free Zones and does away with the Special Economic Zone Authority at Duqm (SEZAD). Government bodies set up to oversee free zones at Salalah and Sohar, as well as the relatively small development at Al Mazyunah, have also been brought under the purview of the new outfit.

Regardless, various benefits, incentives and exemptions made available to existing investors in the SEZs continue to be in force. This means that tenants operating at Sohar, Duqm and Salalah continue to benefit from the various incentives available, including 100 per cent foreign ownership, low minimum capital requirements and tax exemptions. As part of its mandate, Public Authority for Special Economic Zones and Free Zones (OPAZ) will propose the establishment of new SEZ and Free Zones, decide on the right of usufruct over state-owned land located in these development, issue licences, approvals and certificates related to undertaking economic activities in the zones, approve concession agreements, and set Omanisation targets.

Duqm: Mega Development Towering among the three principal SEZs of Oman is the Duqm development. Covering an area of over 2,000 sq km, it ranks

Tenants operating at Sohar, Duqm and Salalah continue to benefit from the various incentives available, including 100 per cent foreign ownership, low minimum capital requirements and tax exemptions

among the largest developments of its kind in the Middle East.

Within this vast landscape is a supersized port, world-class ship repair yard, oil berth, fisheries hub, airport, mega crude oil terminal and a sprawling SEZ delineated into dedicated clusters for light, medium and heavy industries, mineral processing, refining and petrochemicals, warehousing and logistics, fisheries and tourism. Given its mammoth size, Duqm is unlikely to run out of real estate for industrial and commercial investment and development. Already, upwards of $34 billion have been ploughed into Duqm’s basic infrastructure development, which includes investments towards road networks, storm water drainage systems, utilities, hotels, residential townships, and an array of soft facilities. Construction work has commenced on a number of large-scale industrial investments, including a firstever sebacic acid manufacturing plant, cement mills, building materials manufacturing factories, and fisheries processing plants. But Duqm’s signature investment is a giant greenfield refinery currently in an advanced phase of development. Duqm

GROWTH DRIVERS – DUQM, SOHAR & SALALAH

Seeking to enhance the investment appeal of its industrial cities, Madayn recently overhauled its regulatory regime to make it more business-friendly

Refinery and Petrochemical Industries Company (DRPIC), a joint venture of OQ – the wholly Omani government owned integrated energy group, and Kuwait Petroleum International (KPI), is developing the refinery and associated petrochemicals complex with a combined investment estimated in excess of $15 billion.

The 230,000 barrels per day (bpd) capacity refinery will process various types of crudes into diesel, jet fuel, naphtha and liquefied petroleum gas (LPG).

When fully operational, the refinery – an anchor project of the SEZ – has the potential to catalyse a wave of new investment in support services, ancillary infrastructure and an array of civilian amenities. Together with the construction of the muchlarger petrochemicals scheme envisaged downstream of the refinery, the integrated scheme is expected to make a robust contribution to Oman’s long-term economic and GDP growth.

Also making headway in its development is Oman’s newest oil terminal, encompassing a complex of facilities for the storage and export of refined petroleum products from the Duqm Refinery & Petrochemical scheme. When operational in 2023, alongside the multibillion-dollar refinery project, the oil terminal will position Duqm as a new energy hub for Oman. Adding to Duqm’s emerging credentials as an energy hub is the first phase of a world-scale Crude Oil Storage Park at Ras Markaz just south of the SEZ. Storage capacity of around 6 million barrels capacity is being developed at Ras Markaz to meet the needs of Duqm Refinery.

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Also auguring well for Duqm SEZ’s early success are a string of recent announcements linked to plans for large-scale industrial, petrochemical and energy related investments in this corner of the Sultanate. Canada Business Holdings Inc (CBH), a Canadian investment firm, announced that it is moving ahead with plans for the establishment of a Low Sulphur Fuel Oil (LSFO) refinery in the Sultanate to cater to the growing needs of ships transitioning to low-emission fuels for maritime transportation.

The Ottawa-based firm, described as a specialist in the delivery of large projects based on the Private-Private-Partnership (PPP) model, said it would proceed with the phased development of 300,000 barrels per day (bpd) capacity refinery at Duqm with an investment of around $1.5 billion. Earlier in May, DEME Group, a Belgian headquartered conglomerate, unveiled plans to set up a large-scale ‘green hydrogen’ project in Duqm with the support of a number of partners. With a proposed electrolyser capacity estimated between 250 and 500 megawatts (MW), the project will rank among the largest of its kind in the Middle East.

The ‘Hyport@Duqm’ project is envisaged as a world-scale initiative, according to DEME Concessions, a subsidiary of DEME Group. The facility will significantly contribute to the decarbonisation of the regional chemical industry in Oman, as well as providing green hydrogen and/or derivatives (such as green methanol or ammonia) to international customers in Europe, for example in the Port of Antwerp. The advantage of the location in Duqm is the availability of cheap renewable energy (solar and wind), as well as large, accessible sites (on- and offshore). More recently, Duqm Cement Projects International LLC (DCPI) said it is developing the mega project plant with a capacity of 3.50 million tons per annum (equating to 10,000 tons per day). The project aims to contribute to the national objective of making Oman a hub for industrial excellence in the region by virtue of its abundant mineral resources, additives, world class ports, efficient economic zones and strategic location.

Sohar: Stellar success Exemplifying the contribution of industrial and freezone developments to the country’s economic growth is Sohar Port and Freezone. Although modest in size when compared to the gigantic Duqm SEZ development, SOHAR is a runaway success.

Congratulations and Best Wishes to His Majesty Sultan Haitham bin Tarik and the people of Oman on the occasion of the 50th National Day

Tel: +968 24691414 www.muscateye.com

GROWTH DRIVERS – DUQM, SOHAR & SALALAH

Nearly all of the 2000 hectares that make up the industrial port area of the hub have been already leased to a variety of industrial investors and service providers, underscoring its huge appeal.

But there’s ample land in the adjoining freezone – a 5,000 hectare development that has already pulled in substantial investments in, among other sectors, warehousing and logistics, food processing, smelting, mineral processing, and textiles.

Indeed, Sohar Port and Freezone has witnessed considerable growth, seeing an average throughput of over 1 million tonnes of cargo per week over the course of 2019 and bringing in investments of RO 10.4 billion ($27 billion) to-date. During 2019, dry bulk was valued at over 36 million tonnes, liquid bulk at over 15 million tonnes, and break bulk at over 1 million tonnes.

Additionally, the number of vessels that called at the port reached nearly 3,200 vessels. In response to strong investment interest in Sohar, Phase 1 of Sohar Port South expansion project was undertaken last year, adding 50 hectares of land to the port’s capacity. Work is currently underway on Phase 2, which will see the addition of another 200 hectares to the Port area of 2,000 hectares. There are also plans in the pipeline for the expansion of Sohar Freezone, which in turn, will increase its capacity to bring in prospective investors.

New land area created as a result of the Sohar Port South expansion project has already been earmarked for global giants, such as Trescorp and Total, the latter of which aims to establish an LNG bunkering supply station for vessels at the Port, therefore attracting even more investments to Sohar Port and Freezone. But Sohar Port’s flagship investment is the giant Liwa Plastics Industrial Complex (LPIC), which is on track to commence commercial production later this year. The massive venture, set up by OQ with an investment of $6.7 billion, will optimise value generation from Oman’s hydrocarbon resources.

This transformational project will firmly put the Sultanate on the global petrochemicals map and enhance OQ contribution to the national GDP. The mammoth scheme, divided between two locations 300 kilometres apart, commenced trial operations in May this year, heralding a new era in petrochemicals production with the potential to catapult the Sultanate into the ranks of the world’s leading producers.

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While the centerpiece of the project is located within the industrial port at Sohar, a Natural Gas Extraction (NGL) facility has been set up 300 km upstream at Fahud. Rich gas pumped from Fahud via pipeline is processed by a huge steam cracker built at the downstream end, along with light ends produced by OQ-owned plants at Sohar. The steam cracker will enable the production of polyethylene (PE) for the first time in Oman, as well as strengthen the company’s polypropylene capabilities.

At full capacity, Liwa Plastics will boost OQ’s production of polyethylene and polypropylene to 1.4 million tons.

Salalah: Powering ahead Registering the fastest growth among Oman’s three major SEZs is Salalah Free Zone, adjoining the transshipment and logistics hub in Salalah. Although the oldest free zone development, investment inflows began as a trickle, but have turned into a tide, of late. As many as 88 projects, worth over $8.7 billion in investment, are in various stages of development and operation at the sprawling development. Since the start of the year, Salalah Free Zone has seen about a dozen major projects kicking off construction work at their respective sites. Notable is Magnificence Tech of Asia (FZ) LLC, which is setting up a bus assembly plant at the free zone with an investment of $50 million. The company is targeting the production and roll-out of around 1,000 coaches per annum for distribution across markets in the Gulf, Middle East and Africa. It will be the second such investment in the Sultanate, after Oman’s maiden bus assembly plant by Karwa Motors, which is currently under construction at Duqm Special Economic Zone.

Work on the Free Zone’s first large-scale metallurgical plant is gathering pace as well. National Steel Company, backed by a Saudi corporation, is investing $500 million in an integrated steel complex that will produce around 25,000 tons per year of steel structures, 60,000 tons per year of prefab metal structures, 2 million sq metres per year of sandwich paneling for industrial structures, and 10,000 tons per year of industrial floors. Roughly two-thirds of this output is destined for overseas markets. Among the major ventures targeted for launch this year is Philex Pharmaceuticals, which is being developed in three phases with a total investment of $365 million. The high-tech facility, backed by Qatari investors, will produce an array of drugs and vaccines as well.

SEEN.

HEARD.

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GREEN ENERGY

GO GREEN

With plenty of sunshine and wind available throughout the year, there has been a tremendous shift towards significant investments in renewable energy in Oman

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he energy sector in Oman has probably undergone more rapid changes in the last few years than in the previous decades. The technology leap in renewable energy is rewriting the energy landscape in the Sultanate. Under a friendly and encouraging regulatory environment, the power generation companies, oil & gas majors and energy service companies are collaborating to innovate and adopt new business models to optimally utilize renewable energy.

By 2025, it is estimated that around 16-20 per cent of Oman’s electricity need will be met through renewable energy

With plenty of sunshine and wind available throughout the year, there has been a tremendous shift towards significant investments in renewable energy in Oman. As a result, a number of renewable projects are coming up in the Sultanate with investments running into billions of dollars. By 2025, it is estimated that around 16-20 per cent of Oman’s electricity need will be met through renewable energy. It is expected to go upto 30 per cent by 2030 in alignment with Oman Vision 2040’s goal to build a sustainable society and economy, and achieve energy security powered by renewable energy from diversified sources.

Key project initiatives Ibri-2 Solar Independent Power Producer (IPP) will be Oman’s largest utility-scale solar PV independent power project. The project, to be developed on a BOO (build, own, operate) basis, will utilize solar PV technology to generate 500MW of renewable power. At peak generation capacity, the plant output will be enough to supply an estimated 33,000 homes with electricity and will offset 340,000 tonnes of carbon dioxide emissions a year. The commercial operations are expected to start in the second half of 2021. Ibri-2 IPP was won by a consortium composed of ACWA Power, Gulf Investment Corporation (GIC), and Alternative Energy Projects Co. (AEPC) in agreement with the Oman Power and Water Procurement Company (OPWP).

ACWA Power is the lead investor in the project with a 50 per cent stake, whereas GIC will have a 40 per cent stake and AEPC will control the remaining 10 per cent.

Manah Solar 1 and Manah Solar 2 projects will be located adjacent to each other at a site in Ad’Dhakhiliyah Governorate, approximately 150 km from Muscat. Each project will have a generation capacity of 500 MW. The projects are expected to be commercially operational by the last quarter of 2022.

Another non-related key project in the pipeline is a solar PV project, Solar IPP 2024,with a projected capacity of 500 MW. Apart from solar energy, Oman is also moving ahead on harnessing wind energy. The Sultanate’s first wind farm, Dhofar 1 Wind IPP, built at Harweel in Dhofar started operations in November 2019. The wind farm consists of 13 wind turbines producing a capacity of 50MW. It was constructed by GE in partnership with TSK from Spain. It marks Masdar’s first investment in Oman’s renewable energy sector. The Rural Areas Electricity Company (Tanweer), part of Nama Group,is

GREEN ENERGY

Sohar Port and Freezone is also aiming at settingup Oman’s first industrial-scale green hydrogen plant at the industrial port

overseeing operations and management of the farm.

In addition, atleast two more new wind-based power projects are planned. The 100 MW Wind IPP is envisaged for Jaalan Bani BuAli under the Main Interconnected System (MIS) by 2023.

Another Wind IPP with a capacity of 200 MW is planned in Duqm by 2024.

Oman has also initiated a Wind Resource Assessment Campaign (WRAC) to obtain bankable wind resource data to support the future development of wind power projects in different sites.

The project will also collect solar irradiation data to support the development of wind and solar hybrid projects at the identified sites. The WRAC contract was awarded in the last quarter of 2019 and is expected to be carried out over a period of next 4 years.

Petroleum Development Oman (PDO), the oil & gas major, is also assessing different types of renewable energy sources, hydrogen and bio-fuels for deployment across the company and with other stakeholders as part of the drive to reduce the nation’s dependence on fossil fuels and spur economic diversification.

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PDO’s Miraah solar project at Amal, which harnesses the sun’s power for thermal enhanced oil recovery (EOR), shows just what can be achieved, delivering a total of 300 MW. The project has plans to raise the production to 1GW in the future.

PDO’s Amin 100MW solar project is the first utility-scale solar IPP in Oman and the world’s first utility-scale solar project to have an oil and gas company as the sole wholesale buyer of electricity. The project has received one of the lowest tariffs in the history of solar IPPs worldwide. The site spans 4 sq km, the size of 480 football pitches, consisting of more than 335,000 solar photovoltaic (PV) panels, producing enough energy to power 15,000 homes. The installation was built and commissioned in record time, just under 12 months after signing the EPC (Engineering, Procurement and Construction) contract, providing initial power into PDOs electrical grid in March 2020.

PDO is also working on solar and storage (hybrid systems).

Many of PDO’s oil producing and water supply wells are using electrical submersible pumps (ESPs) to artificially lift liquids to the surface. The ESPs are operated by either diesel generators or on-grid power. A trial was initiated to replace the diesel generators with solar PV power, along with a hybrid storage system for two selected wells. Once the pilot is deemed successful, it will be implemented at all off-grid ESP wells.

In addition, PDO is also making serious progress on a solar plant project supplying to its interior camps. Four PDO camps – SaihRawl, Yibal, Bahja and Nimr– have been earmarked to host solar installations with a total capacity of 5MW. The company is also looking at concentrated solar power offering longerterm power duration storage features which could be more competitive than conventional electrical battery technology.

PDO has also developed a phased roadmap to drive innovation and identify the technical and commercial viability of green hydrogen production and potential applications. This includes the use of solar hydrogen in the rigs to replace diesel generators, its production via water electrolysis using surplus electricity, hydrogen injection into gas pipelines and the

Congratulations and Best Wishes to His Majesty Sultan Haitham bin Tarik and the people of Oman on the occasion of the 50th National Day of the Renaissance

GREEN ENERGY

commercialization of a hydrogen feed to a local off-taker.

Sohar Port and Freezone is also aiming at setting-up Oman’s first industrial-scale green hydrogen plant at the industrial port.

The project envisages creating carbon-free hydrogen from low-cost solar power, stored for use on demand. The hydrogen stored for later delivery (via pipelines and trailers) will be used by the port’s industries and tenants for clean transport and industrial purposes, according to the company. Another green

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hydrogen plant is proposed in Duqm by DEME Concessions. It is expected to produce power between 250-500MW making the project among the largest of its kind in the Middle East, as per the reports.

In addition, there are a number of initiatives from other public and private sector companies to ensure Oman meets the target of renewables contributing almost one-third of the country’s power requirements in the next 10 years.

Heartiest felicitations to His Majesty Sultan Haitham bin Tarik and the people of Oman on the occasion of the 50th National Day of the Renaissance

OIL & GAS

FUELING GROWTH The oil & gas sector in Oman has been under transition in the recent times to be better prepared to navigate through the market turbulence and optimize on emerging opportunities

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T

he oil & gas sector has been the growth engine of the Sultanate of Oman. The oil & gas exports valued at over $26.3 billion contributed over 68 per cent to Oman’s total exports of over $38 billion in 2019.

The oil & gas activities comprised over 35 percent share of the country’s gross domestic product (GDP) of over $75 billion at market prices in 2019. Overall, the sector had a satisfying last year before being hit by Covid-19 pandemic related challenges and collapse in oil prices in 2020.

The Sultanate’s total oil reserves stood at around 4,843 million barrels at the end of 2019, approximately 52 million barrels higher compared to the end of 2018

Steady growth The Sultanate’s total oil reserves stood at around 4,843 million barrels at the end of 2019, approximately 52 million barrels higher compared to the end of 2018. The increase came as a result of evaluation of the existing/new fields and additions from new exploration operations after deducting the quantity produced in 2019.

In the field of gas reserves, about 0.46 trillion cubic feet of gas were added to the Sultanate’s total gas reserves, which stood at about 23.82 trillion cubic feet at the end of 2019, compared to 24.65 trillion cubic feet at the end of 2018 - after deduction of the quantities produced in 2019. Therefore, gas reserves were about 0.84 trillion cubic feet less by the end of 2019 compared to the end of 2018.

The average daily production of oil in 2019 was about 971,000 barrels per day, confirming the Sultanate’s commitment with OPEC countries to reduce production and narrow the gap between supply and demand. The average daily production of natural gas (in addition to gas imported from Dolphin) reached about 128 million cubic meters per day compared to 125 million cubic meters per day in 2018, including 99 million cubic meters of non-associated gas, 23 million cubic meters of associated gas and 5 million cubic meters of gas imported from Dolphin.

The government is making continuous efforts to encourage local and international private sector companies’ joint

investments in the oil and gas sectors in various projects and fields ranging from exploration to development, establishment of gas-based projects, and ancillary services’ projects to support the petroleum industry, and energy projects.

The total expenditure on the oil sector was around $8.9 billion (compared to $8.4 billion in 2018). The total expenditure on the gas sector was about $3.1 billion, compared to $3.3 billion in 2018.

During 2019, five oil and gas exploration and production sharing agreements were signed including for Block 72 with Occidental Oman, for Block 55 with Shell E&P, for Block 77 with ENI BV and BP Oman, and for Block 47 with ENI BV and OQ. The concession agreement for Block 5 with Daleel Petroleum Company was also renewed for 15 years.

Leading from the front Petroleum Development Oman (PDO), the leading exploration and production company in Oman, delivers majority of the country’s crude oil production and natural gas supply. The company operates 192 producing oil fields, 52 gas fields, 29 production stations, around 9,000 active wells, more than

OIL & GAS

PDO had a very successful year with new oil and gas bookings made across Block 6. A total of 136 million barrels of oil and 1.1 trillion cubic feet (tcf) of non-associated gas were booked as Commercial Contingent Resource volumes in 2019

33,000 kms of pipelines and flowlines and 231 operating units in its well engineering fleet, including 46 rigs and 36 hoists.

The company has become a global pioneer in enhanced oil recovery (EOR) due to its maturing asset base and the complexity and challenging nature of Oman’s geology. The three main methods it currently uses are thermal, chemical and high pressure miscible gas injection.

In 2019, PDO’s capital expenditure was $5.3 billion and operating expenditure was $2 billion. “Last year (2019), we

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successfully continued on our production growth path, despite the current cash-constrained environment and ongoing oil price volatility. This resulted in a combined daily oil, gas and condensate output of 1.210 million barrels of oil equivalent per day (in 2019),” stated Raoul Restucci, Managing Director, PDO in a company report.

He further stated, “The Exploration Directorate had a very successful year with new oil and gas bookings made across Block 6. A total of 136 million barrels of oil and 1.1 trillion cubic feet (tcf) of non-associated gas were booked as Commercial Contingent Resource volumes in 2019. We also achieved the lowest unit finding cost for oil in a decade at just$1 per barrel.”

“PDO is fully committed to realising the recommendations contained in the Oman Energy Master Plan 2040 and believe there are huge opportunities for the Sultanate as we seek a greener future. We will champion the call to quickly grow Omani low-carbon business chains which is critical to building sustainable momentum away from a dependence on fossil fuels, fostering greater In-Country Value (ICV) in terms of jobs, training and growth and attracting more foreign investment.

Key to this will be our ongoing adoption and leveraging of renewable energy solutions, digital and other new technologies, such as solar, wind and hydrogen, and stronger, closer research and development partnerships with academia and Omani SMEs,” he added.

PDO’s Yibal Khuff project, an integrated development project of the Khuff and Sudair reservoirs for the production of ‘sour’ oil and gas, is one of the most technically complex projects in the Sultanate of Oman with an estimated cost of about US$2.7 billion. According to the plan, production is expected to start in February/March 2021.

The company’s another key project, Rabab Harweel Integrated Project, is one of the most expensive upstream projects in Oman. It was completed and became operational in June 2019, two months ahead of the timeframe for the project’s construction. The project was originally estimated to cost $4.7 billion. But it was completed at a significantly lesser cost

Oman LNG is honoured to congratulate ate

HIS MAJESTY

SULTAN HAITHAM BIN TARIK ARIK A K and the people of Oman on the occasion of the aissance is ss ce 50 th National Day of the Renaissance

Omanlng.co.om

@Oman LNG

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OIL & GAS

leading to a saving of more than $1 billion.

More value through integration OQ a global, integrated energy company was established in 2019. The ‘Nakhla’ programme was launched in December 2018 to integrate nine core assets of Oman Oil and Orpic Group’s value chain to form OQ. The nine core assets integrated into OQ are Orpic, Oman Oil Company, Oman Oil Company Exploration and Production, Oman Gas Company, Duqm Refinery, Salalah Methanol Company, Oman Trading International, OXEA and Salalah Liquified Petroleum Gas. According to a company report, OQ is a $28 billion worth company operating in 13 countries across the globe. It covers the entire value chain in

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the hydrocarbon sector from exploration and production, to marketing and distribution of end-user products.

“In 2019, we were proud to see the unified identity, values, and aspirations of OQ come to life with the integration of nine business assets, all working together to deliver sustainability and business excellence, the Omani way. The integration journey - referred to as Nakhla programme - which we started in 2019 made significant progress throughout the year, including the development of an integrated business model, a leadership team, and a unified brand. Today, OQ merges agility and technology to deliver innovative solutions for consumers in over 60 countries worldwide,” stated OQ’s Group Chief Executive

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OIL & GAS

The oil & gas activities comprised over 35 percent share of the country’s gross domestic product (GDP) of over $75 billion at market prices in 2019

Officer Musab Abdullah Al Mahruqi, in a company report.

“On the financial side, and despite all the transformational changes in 2019, OQ continued its profitable operations, and closed the year with an EBITDA of $2,299 million, and a net profit of $597 million. With many different projects currently at various stages of completion, we will continue to expand and develop our upstream and downstream portfolios, which will increase our production and open new markets to OQ,” he further added.

During 2020, OQ has announced starting the commissioning phase of its state-of-the-art Liwa Plastics Industries Complex (LPIC) with a total investment of $6.7 billion. It is one of the transformative manufacturing projects that will contribute to improving and increasing the diversity of downstream

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industries production by utilizing the final products that are produced from the Sohar Refinery and Aromatics Plant.

The project also ensures a better exploitation of the natural gas liquids currently extracted from the supply of natural gas to produce high quality polymer products that meet the needs of the local and international markets. For the first time, the Sultanate will be able to produce polyethylene, a form of plastics, for which there is a growing global demand.

Duqm Refinery and Petrochemicals Industries Project is another key initiative of OQ. The Duqm Refinery’s refining capacity will reach 230,000 barrels per day when operations start and will produce diesel and aviation fuel, in addition to naphtha and liquefied petroleum gas (LPG). The project will be implemented at a total cost of $5.75 billion. Provided that all the work related

to the project is completed, the trial operations of the project are expected to start by the end of 2021.

Overcoming major complexities BP has an upstream presence in Oman since 2007. It has 60 per cent ownership in block 61, one of the Middle East’s largest tight gas accumulations, in which gas lies at depths of up to five kilometres in narrow bands of hard, dense rock.

The development of block 61 (Khazzan and Ghazeer) comprises a three-train central gas processing facility and 400kms of gas and condensate export pipelines apart from other required facilities. 132 wells have been drilled in the block, with more planned over the lifetime of the project.

BP announced in October 2020 the beginning of production from its block 61 phase 2 Ghazeer gas field, 33 months after

the development was approved. Ghazeer was initially expected to come into production in 2021.The first phase of development of block 61 – Khazzan – was brought online in September 2017.

The gas from the block is distributed for domestic consumption via Oman’s national gas grid, while also boosting availability of feedstock supply for Oman LNG. BP Trading and Shipping purchases 1.1 million tonnes a year of LNG from Oman LNG under a seven-year deal that started in 2018.

Total production capacity from the block, comprising both Khazzan and Ghazeer, is expected to rise to 1.5 billion cubic feet of gas a day and more than 65,000 barrels a day of associated condensate. With an estimated 10.5 trillion cubic feet of recoverable gas resources, the block has the capacity to deliver approximately 35% of Oman’s total gas demand.

BANKING & FINANCE

DOING THE BALANCING ACT The banking & finance sector has continued to support the customers and the economy for the national cause while innovating and adopting new technologies despite the Covid-19 related challenges

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O

man’s banking sector has been undergoing a transition in sync with the path breaking changes seen in the financial services sector globally with adoption of new technologies and paradigm shift in the customer offerings. The Central Bank of Oman is providing the enabling environment to facilitate the existing players, the startups and all the stakeholders to reap the rich benefits of greater technological usage and innovations. The banks in Oman have been swift in adopting new modes of service delivery and technologies to serve the market more effectively especially during the Covid-19 related challenging times.

Talking about the advancement of fintech in Oman, H.E. Tahir Salim Al Amri, Executive President, Central Bank of Oman (CBO), stated, “The fintech strategy of the Central Bank of Oman, is aimed at establishing a comprehensive fintech ecosystem in Oman, to foster and nurture, the fintech startups, the SMEs and the technology firms, besides facilitating the existing players, to innovative, develop and offer digital solutions. Thus, apart from being in league with the current times, our strategy would also serve as an impetus to our country’s economic growth, open new job opportunities and attract venture capitalists.”

CBO has constituted an in-house fintech committee to drive the fintech strategy and promote the establishment and development of a robust fintech sector in Oman. As a move forward, CBO in the second quarter of 2020, put in place, a ‘Fintech Regulatory Sandbox Framework’, which will enable applicants, both from the licensed and non-licensed institutions, to test their proposed fintech solutions, live under CBO’s oversight.

Further, CBO is also in the process of finalizing the ‘draft cloud computing guidelines’. Once finalized, it will provide the framework for availing cloud services by licensed institutions

CBO has constituted an in-house fintech committee to drive the fintech strategy and promote the establishment and development of a robust fintech sector in Oman

and foster the growth of local cloud providers. It is interesting to note that 60 per cent of the fintech forays, are related to payment products. The payments system, which is the digital backbone of the financial system, is robust in the Sultanate and has many firsts to its credit in the region. In order to provide a firm legal footing to the Payments System, the National Payment System Law (NPSL) was issued under the Royal Decree No.8/2018, followed by the issue of its ‘Secondary Regulations’, in the early part of 2019. It paves the way for licensing new types of non-banking entities, the “Payment System Providers”, which are primarily, ‘startups or innovators’. The NPSL has enabled the issuance of the first PSP license in the second quarter of 2020.

This has kindled interest in several startups who are seeking PSP license, which are under CBO’s consideration.

However, even before the enactment of the NPSL, CBO had launched the ‘Mobile Payment Clearing and Switching System’ (MPCSS) in July 2017 to facilitate mobile payments. It is a truly interoperable and unified switching and clearing platform for P2P and P2B mobile payments via mobile numbers. It was upgraded in 2019 to process QR code based and merchant payments. This will facilitate instant person to person (P2P) payments up to RO 500 across all participating banks. The efforts are on to make it an alternate and affordable channel,

BANKING & FINANCE

The positive outcomes of CBO’s initiatives are reflected in the exponential growth in mobile payments, the huge surge in POS and e-commerce transactions

and also upgrade the existing payment infrastructure.

The Wholesale Payment System, namely, the Real Time Gross Settlement System (RTGS) is in the advanced stage of upgrade and will be up 24X7 by the first half of 2021. “This will make Oman, the first country in the Arab/Gulf region, to operate the RTGS system, 24X7. It will help businesses to make high value payments round the clock. This would greatly help the payment system participants to manage their funds efficiently.

CBO is also in the process of integrating it with GCC RTGS and exploring the prospects of integrating it with Arab Regional Payment System (ARPS BUNA), which would make regional payments, much more affordable,” informed H.E. Tahir Al Amri.

Further, recognizing that the government sector alone drives around 55 per cent of electronic payments in the Sultanate, CBO is working with government entities to improve the efficiency of their payments and effectively enable them, to manage the payment-related risks. Another interesting offering to be rolled out by the Central Bank of Oman will be the ‘direct debit and mandate management’. This will facilitate automatic recurring payments that customers’ wish to make, by pre-authorizing the amount of debit, either fixed or variable, at regular intervals

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for a pre-defined period. This will also simplify the process of collection of payment for corporates and companies, providing ample scope for development of further innovative products.

H.E. Tahir Al Amri further added, “Some of the other paymentrelated initiatives in the coming years are the study on the formation of the ‘National Payment Company’, which we are contemplating for operating the ‘retail payments’, launch of IBAN account numbers and an ‘awareness and marketing drive of payment system service’. The positive outcomes of CBO’s initiatives are reflected in the exponential growth in mobile payments, the huge surge in POS and e-commerce transactions and a fall in the share of ATM transactions in e-payments from 58 per cent in 2017 to 27 per cent by 2020.”

The increasing adoption of technology is also enabling achievement of the other objectives of the government and the central bank, such as ‘financial inclusion’. An integral part of ‘financial inclusion’, is to provide timely access to affordable credit, which is a challenge for small businesses and SMEs. The establishment of the National Databank Centre, Mala’a, the National Credit Registry in December 2019 will empower access to credit, financial inclusion and SME development. Mala’a, will be operating with world class technology, scalable datamodelling engines and credit bureau platforms. It will initially provide ‘credit risk scores’ for consumers and corporates.

“Going forward, Mala’a will be expanding its scope to provide other services such as mobile lending platforms, instant decisioning modules, data analysis and other fintech innovations. Mala’a will be going live on 18th November 2020.

Another area of our focus is to facilitate digital onboarding of customers. Having already enabled non-face-to-face onboarding, by application of ‘simplified KYC’ procedures, for offering mobile wallets and prepaid cards, we are in the process of extending the ‘simplified KYC’ framework to micro businesses. This will be a further big step in the direction of ‘financial inclusion’,” added H.E.Tahir Al Amri.

Navigating through challenging times Oman’s nominal GDP declined by 13.4 percent during the second quarter of 2020 compared to the same period of last

Strong Foundations…

Renewed Renaissance.

With great honor and united voices, we congratulate His Majesty Sultan

Haitham Bin Tarik and the people of Oman on the occasion of the glorious 50th National Day of the Renaissance.

On this commemorable national occasion, we wish everyone health and prosperity renewing our commitments towards our people and the nation to continue moving forward as we work towards economic development poised for greatness and future ‘wins’.

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BANKING & FINANCE

year, according to preliminary data released by National Center for Statistics and Information (NCSI). The nominal contraction in the economy was driven by a 20 percent decline in the hydrocarbon sector, as well as the decline on non-hydrocarbon sector by 9.9 percent during the second quarter of 2020.

The Omani oil price averaged $47.7 per barrel during the first eight months of 2020 which is lower by 26.3 percent over the corresponding period of last year. The economic downturn has impacted the performance of banking sector in Oman especially during the second and third quarters of 2020.

According to the CBO, the combined balance sheet of conventional banks indicates a year-on-year (y-o-y) growth of 1.2 percent in total outstanding credit as of end-August 2020. Conventional banks’ credit to the private sector decreased marginally by 0.7 percent to

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RO 18.8 billion. Aggregate deposits held with conventional banks increased to RO 20.4 billion in August 2020, registering a growth of 4 percent over the level a year ago. Government deposits with conventional banks decreased by 16.9 percent to RO 4.5 billion, while deposits of public enterprises increased by 14.6 percent to RO 1.1 billion. Private sector deposits, which accounted for 70 percent of total deposits with conventional banks, increased by 11.5 percent to RO 14.3 billion.

Islamic banking entities provided financing of RO 4.1 billion at the end of August 2020, recording a growth of 6.6 percent over that a year ago. Total deposits held with Islamic banks and windows increased by 6.8 percent to RO 3.6 billion. The total assets of Islamic Banks and Windows stood at RO 4.9 billion and constituted about 14 percent of the banking system’s assets as at end-August 2020.

Heartiest felicitations to His Majesty Sultan Haitham bin Tarik and the people of Oman on the occasion of the 50th National Day of the Renaissance

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BANKING & FINANCE

Islamic banking entities provided financing of RO 4.1 billion at the end of August 2020, recording a growth of 6.6 percent over that a year ago

A majority of Oman’s banks are feeling the impact of tightening operating conditions. According to a KPMG report based on the published results of seven Omani banks for the first half of 2020, the Omani banks saw a decline in credit flow, revenue compression, and significant increase in non-performing loans.

The average profits of banks in Oman for H1 in 2020 declined by 34.2 per cent compared to the corresponding period in 2019, primarily on account of increase in expected credit losses by 120.9 per cent compared to the same period in 2019 on loans and advances to customers. The exception to the trend was Bank Nizwa, Oman’s leading Islamic bank, which registered a 37 per cent growth in its net profits for first half of the year, compared to the same period last year.

The effect of Covid-19 and the consequent lockdowns by governments has impacted several sectors globally. The banking industry is no exception. Oman’s economy and the banking sector have taken a hit due to the slowdown in the economy and the decline of oil prices. Across the GCC, governments and central banks announced various economic support measures. Central Bank Oman, in its first stimulus package, reduced interest rates and urged banks to consider reducing the existing fees related to various banking services and avoid introducing any new fees for the duration of 2020.

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Ravikanth Petluri, Partner and Head of Financial Services at KPMG in Oman, commented: “Our analysis shows that Oman’s banks are facing headwinds from the drop in global interest rates in response to Covid-19 and a low oil price environment.

This impact, coupled with a negative view on the economic indicators in 2020, is clearly reflected in the H1 2020 results.

Barring one exception, the majority of Oman’s top banks have continued to build their loss allowances during the first two quarters of 2020. However, despite the multitude of challenges, banks have remained resilient. The CBO has taken swift action to address concerns, its relief measures including an extension of its stimulus package until the end of March 2021.”

One of the key developments during the year in the banking sector was the merger of Oman Arab Bank and Alizz Islamic Bank in July. As a result, Oman Arab Bank has turned into a public joint stock company, with shares listed on the Muscat Securities Market. The Al Yusr Islamic Banking window of Oman Arab Bankhas been merged with Alizz Islamic Bank. The merger has created a major financial entity, comprising of both traditional and Islamic banking arms, allowing it to compete at local and regional levels.

NBFCs remaining resilient Non-banking finance companies (NBFCs) in Oman faced challenging times in 2019 primarily because of the liquidity crunch in the market, reduction in both public and private spending reflecting in lower domestic demand and quality credit update and delinquencies due to reduced cash flow at the individual and corporate borrower’s level. Most of the NBFCs reported a decline in profits in 2019 with margin pressures continuing to remain high. They faced intense competition to maintain their market share and increase portfolio growth.

In 2020, NBFCs have been hit very hard due to Covid-19 related challenges. However, they have been resilient to the economic and market pressures. They have implemented the CBO’s regulations on assisting affected customers by deferring instalments. They have also strengthened their digital channels to enable the customers to transact with them remotely with minimal issues.

CROWN JEWEL - TAAGEER FINANCE

CUSTOMER-CENTRIC AUTOMATING BUSINESS PROCESSES AS WELL AS PROVIDING IMPROVED SERVICES AT CUSTOMER END IS AN AREA OF FOCUS FOR TAAGEER FINANCE Taageer Finance, one of the leading NBFCs in the Sultanate offers financial products to cater to the ever increasing needs of the business and consumer segments thereby playing an active role in contributing to the socio-economic development of the Sultanate of Oman.

Taageer Finance is the first non-banking financial institution to launch a mobile app branded as ‘Tamweeli’ for its customers. The mobile app enables the customers of Taageer Finance to view their current loan details, security or collateral details, cheque bounce instances, overdue charges and monthly installments due/pending both for individual, SME and Corporate customers.

Tamweeli provides a 360-degree view of customer’s relationship with Taageer Finance, enabling the customer to ensure financial astuteness even from the remotest of locations in Oman.

Several steps have been taken by the new management to restructure the company including approval of the new organisation structure, formation of new functions to facilitate customers, improve internal controls, re-organise recovery team, revamp recovery model, automate internal processes and so on. In 2019, the main challenge was increasing pressure on the payment capacity of the customers owing to economic conditions resulting in pressure on overdue portfolio of finance companies and banks.

on supporting small and medium businesses by providing superior customer service, diversifying the portfolio for better risk management, automating processes for improved customer experience, strengthening the recovery mechanism and interacting regularly with customers facing financial difficulties to come up with solutions to solve their issues.

The liquidity position in the market is a matter of concern, but Taageer is exploring all avenues to address the same. Taageer Finance has focused

During the current year, Taageer’s main focus has been to support the government in stabilising the economy by facilitating SME portfolio and

ensuring that the affected businesses and individuals sail through difficult times. Taageer has also taken several initiatives to provide an improved digital experience to its customers with emphasis on customer security and convenience.

CROWN JEWEL - BANK MUSCAT

BANK MUSCAT SUCCESSFULLY IMPLEMENTS A SUSTAINABLE STRATEGY TO DEVELOP HUMAN RESOURCES AND FOSTER AN EXEMPLARY WORK ENVIRONMENT JADARA ACADEMY OFFERS TRAINING PROGRAMS THROUGHOUT THE YEAR AND OFFERS SCHOLARSHIPS TO EMPLOYEES

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Bank Muscat, the leading financial services provider in the Sultanate, in line with its vision ‘To serve you better, everyday’ is one of the largest institutions supporting young people in the Sultanate and playing a crucial role in developing Omani human resources.

The bank has become a dream employer for many job seekers in the Sultanate as it provides training to employees and empowers them to grow further in their careers. From the very first moment an employee joins the bank, suitable training and development opportunities are provided to make the employee skilled and familiar with work-related processes and procedures such that they can deliver to the best of their abilities.

Bank Muscat always endeavours to attract the youth in large numbers so that they can add value to the workplace in a way that serves public interest and society. It provides a work environment that inspires creativity and continuous development. Importantly, the bank continues to implement plans and programmes that achieve sustainable growth and provide job opportunities in various fields related to the financial sector as a translation of the bank’s strategy of leadership, partnership and responsibility. In 2020,

the total number of Omanis who work at the bank rose to 3,556, with an Omanisation ratio of about 95%. About 48% of all bank employees are women, who work across different job roles and at all levels including management. The bank’s overall strategy complements the government’s vision of developing and harnessing the energies of youth for the benefit of society and the nation.

The bank provides a professional work environment based on a fair and equal opportunity to all, state-of-the-art technology and global best practices in the financial services sector.

Said Salim Al Aufi, Group Deputy General Manager - Human Resources, Bank Muscat, expressed his happiness with the bank’s achievements and said: “As the nation’s leading banking partner, Bank Muscat attaches great importance to national initiatives, especially human resources development aimed at contributing to Oman’s future by investing in talent which is the real wealth of the nation. The bank has been continuously working towards its commitment of being a leading employer by providing safe and well equipped facilities that ensures the safety of all employees, customers and partners. We have a large number of young Omanis

Said Salim Al Aufi

Group Deputy General Manager

The bank is the largest employer of Omani youth, with 3,556 employees and an Omanisation ratio of 95%

CROWN JEWEL - BANK MUSCAT

working across all disciplines and levels.

A large number of senior positions in executive management as well as heads of departments and branches are Omanis. This success has been possible only thanks to the excellent efforts and work put in by Omani employees across all levels.”

Afra Al Zadjali

I have now been working at the bank for more than 5 years and I am very happy to say that this has been a period of great learning and experience. I take this opportunity to thank Bank Muscat for supporting and helping me achieve my dream of completing my postgraduate studies

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Speaking about the high level of Omanisation at the bank, Said Salim Al Aufi, said: “Sustainable human resources development is one of the key priorities of the bank. Bank Muscat is proud to take the lead among private sector institutions to carry out the national responsibility in creating job opportunities and providing an excellent work environment. The high Omanisation rate of about 95% is evidence of the top priority accorded

by Omani youth in making the best use of opportunities offered by the bank. Bank Muscat takes into account the need to develop Omani human resources across all specialties and cooperates with various government institutions, universities and colleges in its mission to develop the Sultanate’s human resources.”

Bank Muscat attaches great importance to national initiatives for human resources development. In 2020, the bank’s Jadara Academy, which is accredited by the Global Association of Corporate Universities and Academies, organised 171 training programmes, which were attended by more than 2,000 employees of the bank. Taking into consideration social distancing norms and flexibility of time in completing training programmes, employees were offered many online programmes this year instead of regular classroom-based learning.

As part of its social commitment, every year Bank Muscat offers internships to students from colleges and universities in Oman. The exposure to the dynamic corporate environment is aimed at helping the interns apply their theoretical classroom knowledge to the real world

of banking and finance so that they can shine at whichever workplace they are in the future. The bank also participates in major career fairs to facilitate attractive job opportunities for Omani youth. It is important to note that all new employees have to complete a mandatory weeklong induction course at the time of joining.

Further training is provided to new employees depending on the department that they are joining. Also, the bank facilitates professional qualifications for employees in different areas like Treasury and Capital Markets, Investment, Trade Finance, Cards, IT, Finance and Human Resources as well as functional development programmes based on job profiles such as Branch Managers, Service Managers, Wealth Management, Project Finance, SME and Credit.

Notably, the bank also offers leadership and management development programmes for senior managers and middle and top management. These programmes are facilitated by faculty from renowned business schools like Harvard, INSEAD and Duke and ensure that there is a steady pipeline of leaders who are suitably trained and experienced to handle the most critical job roles at all times.

The bank recognises that employees propel the success of the bank and hence makes all efforts to ensure that employees take pride in their work and workplace while also progressing forward in their careers. Many Bank Muscat employees have expressed their happiness with their experience of working at Bank Muscat, and their pride in the efforts made by the bank to develop the skills and capabilities of its Omani cadre. They thanked the bank for providing them with many opportunities to complete higher studies at universities inside and outside the Sultanate, thereby providing a path to achieve their aspirations and career goals.

Afra Al Zadjali, an IT employee at Bank Muscat said: “I had worked at three

different institutions before joining the bank. I have now been working at the bank for more than 5 years and am very happy to say that this has been a period of great learning and experience. I take this opportunity to thank Bank Muscat for supporting and helping me achieve my dream of completing my postgraduate studies once I fulfilled the relevant conditions. I am now studying at an institution in the Sultanate, and hope to complete my Master’s degree in a year’s time. This support will help me greatly in my career and I really value the strong support provided to me by Bank Muscat.”

Amira bint Said Al Wahaibi who has been working at Bank Muscat for nearly eight years said: “I have worked in multiple roles within the customer experience department, serving both retail and corporate customers.

Through my work here, I have been able to understand the needs of different customer segments and acquire problem solving, customer service and communication skills. It’s my ambition is to further succeed in my career and give it my very best.”

Amira Al-Wahaibi pointed out how Bank Muscat supports is always facilitating the development of its human resources. “Thanks to the excellent

support from the bank, I was able to study Strategic Marketing at Cranfield University in the UK so as to further boost my skillsets and help me grow further in the customer experience department. She expressed her gratitude to Bank Muscat for the opportunity and continued: “I will be graduating soon and am confident my new learnings will help me become more productive and better serve our customers every day,” she added.

Bank Muscat’s HR practices focus on creating, nurturing and supporting people to meet the ambitious growth plans of the bank, through a wide variety of initiatives that cover all stages of employee life cycle. It makes use of every opportunity that it gets to extend support to Omani nationals seeking career development and training opportunities and is a regular participant at career fairs at leading educational institutions. The absorption of new employees reflects the bank’s focus to develop not only its young Omani leadership but also the bank’s efforts to create a pipeline of leaders who can contribute in multiple ways to the growth and development of the nation. Bank Muscat is proud to have set a fine example in continuously building human capacity and creating rewarding career opportunities.

Amira bint Said Al Wahaibi

Thanks to the excellent support from the bank, I was able to study Strategic Marketing at Cranfield University in the UK so as to further boost my skillsets and help grow further in the customer experience department

CAPITAL MARKET

TRANSFORMING THE BUSINESS LANDSCAPE The capital market plays a vital role as one of the most important source of funding for various economic undertakings

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man’s capital market witnessed excellent financing activity in 2019. The financial data for the year 2019 shows that the capital market provided financing at RO 3.14bn in the form of different financing instruments such as shares, bonds and Sukuk.

Long term financing instruments’ contribution increased by 75 per cent compared to 2018, which is proof of the vital role that capital markets play in the financing process of the various economic undertakings.

As to the legislative developments, the key was the issuance of the Commercial Companies Law, Take-over and Acquisition Regulations, Standard Health Insurance Policy, Takaful Regulation and Articles of the Insurance Emergency Fund.

Such upgrading of the laws and regulations was in response to the requirements of the capital market and insurance sector.

With regards to the insurance sector, there is confidence in the insurance sector, which is reflected in the growing turnout for insurance products. The growth in the volume of the insurance products is approaching half billion rials. Average growth of the insurance market in the past five years was 4 per cent notwithstanding the volatile economic situations and the geopolitical circumstances in the region. The capital market plays a vital role as one of the most important source of funding for various economic undertakings. Its role is to pool the financial resources and savings and direct them to funding productive economic undertakings swiftly, easily and transparently. The CMA approved in 2019 a number of issues of securities, shares, bonds and Sukuk, which contributed to increase in the capital of joint stock companies to fund the investment needs to meet the requirements of Basel 3 related to capital adequacy of commercial banks. The number of issues approved by CMA were 9 at RO 522.6mn. The value of the approved issues after allotment and listing on the MSM was about RO 540.3mn.

In 2019, the prospectuses of Musandam Power SAOG for public offerings was considered and approved in compliance with the obligations in the project founders’ agreement to offer 40 per cent of the issued and paid up capital to the public.

The issues witnessed turnout by local and foreign investors with proceeds of more than RO 14.6mn of the offered value of RO 8.9mn. CMA considered and approved rights issue prospectuses of two companies at a total value of about RO 42.8mn. ‘Celebrity National Services’ offered issue rights shares in private placement, however the offer was unsuccessful due the company’s distress which led to its dissolution later. Sohar International Bank offered rights issue shares at RO 40mn and

listed on MSM for the purpose of supporting the bank’s business and financial efficiency to comply with the requirements. The issue was fully covered by the shareholders and listed on MSM. The year 2019 witnessed issuance of four corporate bonds at total value of RO 146.5mn.

Foreign Investment

The CMA attaches great importance to the foreign investments and endeavours to create appropriate environment to attract more foreign investments to increase the liquidity and depth of the securities market as such investments are mainly long term institutional investments based on well informed investment decisions. However, the key challenges facing the securities markets are how to keep such investments as they may flee suddenly in huge sell off waves that adversely impact the stability of the stock market. Hence, CMA endeavours to enhance the efficiency of the regulatory and legislative frameworks of the capital market, introduce advanced trading systems and develop more products.

The new Foreign Capital Investment Law enacted by Royal Decree No.50/2019 which includes a number of incentives is expected to attract more direct and indirect investments to the Sultanate to become a destination for investments. To meet the needs of foreign investors in the Omani capital market, the CMA conducted study, gathered data and held meetings with investors to find out the effect of the income tax related to dividends and interests on the foreign investors in the stock market. The outcome was the Government agreed to suspend the 10 per cent tax imposed by the Income Tax Law enacted

by Royal Decree No.9/2017 for three years as from May 6, 2019 extendable. To enhance the confidence of owners of the local and foreign capital in MSM, CMA conducted study in 2019 for all public joint stock companies whose capital is eroded to know the actions taken to ensure the companies compliance with Article 147 of the Commercial Companies Law. The law contains provisions for preservation of the share capital for the protection of investors and stakeholders.

The law obliges the board of directors to take actions which secure the preservation of the share capital early without waiting until the losses reach 75 per cent of the share capital as was applicable previously. The legislature obliged the board to take action if the company loses 25 per cent of the share capital to remedy the situation. To protect the rights of investors and stakeholders in the company, the law allowed CMA to convene the extraordinary general meeting of the company if the board fails to convene the meeting.

CMA will continue, in the next year, as part of its strategic plan for the period 2020-2024, a number of projects and initiatives based on the Vision 2040.

CROWN JEWEL - OMINVEST

A TRACK RECORD OF VALUE CREATION OMINVEST HAS AN UNFAILING COMMITMENT TOWARDS DELIVERING BUSINESS EXCELLENCE WHILE DEEPLY CARING FOR THE WELL-BEING OF THE SOCIETY AND ENVIRONMENT

Since its establishment in 1983, OMINVEST has come a long way. Its growth journey has been among the most prominent corporate success stories during the Renaissance period in the Sultanate of Oman. As the nation is moving to the next phase of economic growth and social development under the visionary leadership of His Majesty Sultan Haitham Bin Tarik, the company is well placed to continue its journey to becoming an eminent investment group in the Middle East & North Africa (MENA) region with a significant global reach and impact.

Built on strong foundations, a successful history, and a strategic growth orientation, the company has managed to withstand challenging socioeconomic dynamics over the

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years, including the ongoing pandemic, low oil prices, and tight market liquidity.

The impressive financial performance in the first three quarters of this year on major growth parameters is yet another testimony of the prudent strategies adopted by the company and the effective stewardship of its Board of Directors and the Management team.

In 2014, OMINVEST evolved its strategy to diversify and grow. In the following years, major deals were executed to enhance profitability and create shareholder value. For instance, during 2015, OMINVEST was able to transform itself completely through a merger with ONIC Holding which resulted in a bigger company with a diversified asset base and significant synergies.

During 2014-2018, OMINVEST

strategically positioned itself in the banking, insurance and leasing sectors by building stakes in Bank Muscat, Ahli Bank and National Finance Company.

In 2016, OMINVEST supported its flagship insurance subsidiary National Life and General Insurance by boosting its capital for growth initiatives. This led to the successful IPO of National Life & General Insurance in 2017. To diversify into international markets in 2019, OMINVEST’s private equity arm Jabreen Capital entered into a strategic partnership with EastBridge Partners, an experienced private equity firm in Singapore. The partnership supported Jabreen Capital and OMIVNEST’s vision to diversify its portfolio and expand into the global markets. Finally, in 2020, OMINVEST’s subsidiary Oman Arab Bank completed its merger with

Net Revenue Growth & Diversification FY 2014 RO 18 Million

FY 2019 RO 50 Million

Real Estate 10%

Jabreen Capital 45%

Associates 10% Investments -2%

ORIS 1% National Finance 7% Oman Arab Bank 33%

Oman Arab Bank 82%

National Life 14% Net revenues (after group adjustments) are based on profit contributions from each of the businesses

19%

16%

75%+

Annual Growth in Net Income (2001-2019) RO 32.1 Million – 2019

Annual Growth in Cash Dividends (2001-2019) RO 20.2 Million - 2019

Omanization (at group level)

Alizz Islamic Bank, a landmark deal in Oman’s banking sector. The merger transaction also attracted substantial foreign direct investment (FDI), boding well for Oman’s overall economy.

The milestone transactions outlined above have strengthened OMINVEST’s balance sheet and created sustainable value for all stakeholders and the economy at large. The diversification of OMINVEST’s income sources over the years is reflected in the contribution of its longstanding investment Oman Arab Bank which used to account for 82% of OMINVEST’s total income in 2014 but reduced to 33% in 2019, despite significant growth in Oman Arab Bank’s income.

Since 2001, OMINVEST’s profits have risen rapidly at an annual growth rate of 20% and cash dividends to shareholders at an annual growth rate of 16%. OMINVEST’s performance is reflected in its stock price and has provided its shareholders with an annualized total return of 12% since 1996 as compared to only 6% from Muscat Securities Market and 9% by USA’s S&P 500 Index.

Moving forward, OMINVEST is looking to further diversify into growth sectors and markets, consolidate its existing portfolio companies and transform them into highly efficient and tech-savvy businesses. Through its subsidiaries, OMINVEST Group is also building new capabilities in the areas of investment banking and asset management.

While delivering business excellence, OMINVEST operates as a proactive corporate citizen, scaling up its positive impact across the years.

In support of human capital, the company nurtures Omani youth by hiring young talents and enhancing their productivity.

Profound career development schemes are implemented to empower employees for senior designations. The company strongly believes in the importance of small and medium enterprises and entrepreneurship to the sustainability of the economy; as such many entrepreneurs have benefited from OMINVEST’s support through various initiatives such as Zubair Small Enterprises Centre and Injaz Oman.

On the environment front, OMINVEST

has been a strategic partner of the Environment Society of Oman across various initiatives for years. As part of its concerted efforts in combating the Novel Corona Virus (Covid-19) pandemic, OMINVEST and its affiliated companies have made significant contributions to “The Endowment Fund to Support Health Services”, while ensuring continued services, relief measures, and proper health and safety protocols are in place.

While the world still grapples with the Covid-19 pandemic, some of the global healthcare companies are making remarkable progress and coming up with vaccines to effectively combat the pandemic. This could bring normalcy back into our lives, and, OMINVEST sees glimmers of recovery going into the next year. As OMINVEST marches ahead towards achieving its long-term vision, the Group and its portfolio companies remain profoundly grateful to the nation’s leadership and the enabling ecosystem in the Sultanate that have been pivotal for the Group’s success over the decades.

INSURANCE

VALUE ADDITION The Unified Health Insurance Policy (UHIP) scheme will drive the growth of insurance premiums in the Sultanate

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man’s insurance market is estimated to reach $1.3bn in 2024, registering a compounded annual growth rate (CAGR) of 2.7 per cent from 2019, according to the GCC Insurance Industry report published by Alpen Capital (ME) Limited, a Dubaiheadquartered investment

banking advisory firm.

The life segment is estimated to grow at a CAGR of 6.1 per cent while the non-life segment is estimated to grow at a CAGR of 2.1 per cent between 2019 and 2024. Growth in life segment is expected to be the highest in the region and is supported by rising population, which is projected to grow at a CAGR of 3.1 per cent between 2019 and 2024.

The paid up capital of insurance companies in 2019 was about RO 253.95mn compared to RO 248.66mn in 2018 with an increase of 2.1 per cent. The paid up capital of national insurance companies was about RO 125.36mn in 2019 compared to RO 124.83mn in 2018 increasing by 0.4 per cent.

The paid up capital of foreign insurance companies was about RO 128.60mn in 2019 compared to RO 123.83mn in 2018 with 4 per cent increase.

The audited financial statements of insurance companies indicated that the total assets of insurance companies have increased by 1 per cent in 2019 reaching RO 1.125bn compared to RO 1.113bn in 2018, which include RO 791.34mn for general insurance and RO 334.30mn for life insurance. In 2018, the general insurance business recorded RO 812.10mn and RO 301.27mn recorded for life insurance business. Assets of the national insurance companies represented 72 per cent of total assets at RO 810.34mn compared to 28 per cent of the total assets at RO 315.31mn for foreign insurance companies.

The total investments of insurance companies at the end of 2019 were RO 624.124mn including RO 399.195mn investments

Sustained economic growth, increase in population and substantial infrastructure development are among the leading factors that will facilitate growth of the insurance sector

of national insurance companies and RO 224.930 investments of the foreign insurance companies compared to RO 618.112mn at the end of 2018 which were RO 385.161mn for the national insurance companies and RO 232.951 for the foreign insurance companies. Audited financial statements indicate that the investments of national insurance companies were concentrated in 2018 and 2019 in banking deposits (general and life) as investments in banks deposits (general and life) comprised 66 per cent in 2019 and 67 per cent in 2018. On the other hand, investment of the national insurance companies in other instruments collectivity were not more than 34 per cent in 2019 and 33 per cent in 2018.

With regards to investments of the foreign insurance companies they were concentrated in bank deposits (general and life) at 58 per cent in 2019 compared to 61 per cent in 2018 followed by investment in government bonds at 25 per cent and 23 per cent in 2019 and 2018 consecutively. Investments of foreign insurance companies in all other investment instruments were not more than 17 per cent in 2019 and 16 per cent in 2018.

INSURANCE

Audited financial statements for the year 2019 shows variations in performance compared to the previous years whereas the contribution of the insurance sector in the GDP was 1.66 per cent.

Gross written premiums have increased by 5 per cent to reach RO 486.582mn at the end of 2019 compared to RO 463.595mn at the end of the previous year. They also indicate that health insurance premiums comprised 35 per cent of the total premiums and motor insurance premiums, both comprehensive and third party, comprised 27 per cent of the total written premiums.

The audited financial statements for 2019 indicate Takaful premiums have increased by 20 per cent. Gross direct premiums of Takaful were RO 64.167mn at 13 per cent of the gross direct premiums of the insurance in 2019, and 12 per cent of the gross paid indemnities in the same year. Premiums collected by insurance brokers were 27 per cent of the gross insurance premiums which is an evidence that brokers have active role in the performance of the industry. Insurance agents collected 6 per cent of the gross premiums.

The introduction of a Unified Health Insurance Policy (UHIP) scheme will drive the growth of insurance premiums in the Sultanate. Its phased roll-out will have beneficial implications not only for the domestic health care sector, but the wider national insurance sector as well. “Implementation of the scheme and issuance of the UHIP coincides with the remarkable growth in health insurance products. The share of health insurance in the total insurance portfolio was 33 per cent in 2018 due to growing market awareness and belief in the importance of the health insurance and its key role in reducing the costs of treatment in case of illness or injury,� the CBO stated in its 2019 Financial Stability Report (FSR). The relatively low levels of insurance penetration level and insurance density point to the presence of unserved and underserved markets in the Sultanate, which represent opportunities in themselves, the report noted.

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It however stressed the importance of better awareness of insurance products and services among to help drive growth in this key sector.

The implementation of mandatory health insurance from 2020 and continuation of health cover by employers will support the growth of the non-life segment. The number of employees covered under the new mandatory health insurance scheme is expected to surpass two million, in addition to Omanis working in the private sector and visitors to the Sultanate. Furthermore, Oman is witnessing a series of construction projects as the government diversifies away from its traditional sectors.

In 2019, the government allocated $9.6bn for infrastructure development, industrial and services projects and, today, the country has approximately 2,410 active construction projects with a combined value of over $190bn.

The strong infrastructure developments are likely to expand the underwriting base for non-life commercial lines. However, insurance penetration and density in the country are expected to slightly drop to 1.4 per cent and $259.3 by 2024.

According to the report, the GCC insurance market is projected to grow at a CAGR of 4.3 per cent from $29.2bn in 2019 to $36.1bn in 2024. Sustained economic growth, increase in population and substantial infrastructure development are among the leading factors that will facilitate growth of the sector. Additionally, governments’ efforts to strengthen regulations, introduce mandatory lines and diversify the economy are also likely to drive GWP for the insurance industry.

The gradual slowdown of the insurance industry witnessed over the past two years is likely to continue until 2024. However, GWP is expected to improve relative to the subdued levels of growth recorded in the recent past, as long-term growth prospects continue to remain positive.

EDUCATION

HIGH PRIORITY The Sultanate’s education sector is on a sustainable growth path supported by both the government and private sector

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is Majesty Sultan Haitham bin Tarik in his Royal Speech on February 23, 2020 said, “On top of our national priorities is the education sector, with all its types and levels. It will receive full attention, and it will be provided with the supporting environment which motivates research and innovation. We will also provide it with all means of empowerment, since it is the base upon which our children will be able to participate in meeting the requirements of the coming phase of development.”

The government’s budget 2020 allocated RO1.59bn to education which was 12 per cent of the total expenditure of RO13.20bn. This reflects the commitment and weightage accorded to education by the government

The Educational vision in Oman is to equip human resources with the values, knowledge and skills to enable them to be productive in the world of the knowledge economy, keep pace with the continual changes in the world, maintain their national identity and intrinsic values, and contribute to the advancement of human civilisation.

The vision was formulated on six components - maintaining Arabic and Islamic culture; reinforcing national identity; diversifying educational paths; supporting research, innovative and creative capabilities; promoting work ethics; and being effective in the world’s knowledge economy. A Royal Decree issued in August 2020 renamed the Ministry of Higher Education as the Ministry of Higher Education, Research and Innovation reflecting the new Vision.

Blended learning The outbreak of the COVID-19 has necessitated the Ministry of Education and other organisations to come up with a blended learning model to ensure that students can continue with their education without endangering their health. The new academic year with a mix of classroom and online learning began on November 1, 2020 for students of government and private schools in Oman.

The Ministry of Education took a number of steps to guarantee the safety of students, teachers, and other staff. It is expected

that around 676,943 students including 334, 889 girls will take part in the blended education under the guidance of 56,613 teachers.

The Ministry of Education has worked with telecommunications companies to provide Internet packages for schools.

Staggered school timings have been introduced to avoid crowding. School hours for students in Grades 1-4 are between 11 am and 2 pm, Grades 5-11 between 8 am and 11 am, and for Grade-12, between 8 am and 2 pm. Oman TV telecasts lessons for Grade 12 daily on weekdays between 2:30 pm to 6:30 pm. Schedules for school classes on TV are available at the ministry website. It is estimated that around 82 per cent of schools have implemented an e-learning system, while 10 per cent will follow blended education, and the rest will have

EDUCATION

full attendance in schools. The health protocol includes clear precautionary measures provided by the MoE such as checking the temperature, sterilizers, face masks, and a one and a half feet physical-distancing in classes.

Larger goal Oman’s government continues to prioritise education as part of its broader plans to modernise the economy and provide jobs for its growing population. In recent years the focus at the primary, secondary and tertiary levels has been on innovation, as well as greater regulation and oversight of education quality. As it pushes for greater Omanisation in the local economy, the government is increasingly working to equip Omanis with the necessary skills to enter the job market. At the same time, it is encouraging the implementation of new academic and training programmes to keep abreast of the dynamic, knowledge-based global economy.

The education system has seen major developments since 1970. At that time, there were only three schools and a total of 900 students in the country. By the 2018-19 academic year the number of public schools had reached 1124, offering education to 579,000 students and employing 56,400 teachers, while the number of private schools had reached 730, with 105,700 registered students. Furthermore, there were 63,800 students enrolled at international schools in the country, bringing the total number of students enrolled in primary and secondary education to over 700,000. Net enrolment rates in primary education stood at over 98 per cent with female students accounting for 60.8 per cent of the total.

Oman’s higher education system has undergone similarly dramatic developments since SQU was established in 1986.

Total tertiary enrolment rose from 95,100 in 2011 to 126,100 in 2017, the most recent year for which government data is available. The gross enrolment ratio at the tertiary level reached 44.6 per cent in 2016, up from 27 per cent in 2011.

The government’s budget 2020 allocated RO1.59bn to education which was 12 per cent of the total expenditure of RO13.20bn. This reflects the commitment and weightage accorded to education by the government.

The size of the private primary and secondary education market exceeds $1bn and is growing steadily. Between 2011 and 2016 the number of private schools in Oman grew at a CAGR of 5.5 per cent, while public schools recorded a CAGR of 0.9 per cent, according to the “GCC Education Industry” report by investment bank Alpen Capital.

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Similarly, at a CAGR of 8.3 per cent, enrolment at private schools has increased at a far greater rate than in public schools (1.2 per cent). Looking ahead, Oman’s private school market value is expected to grow from $1bn in 2016 to $1.8bn in 2023, according to global management consulting firm Boston Consulting Group. This will be driven by a significant increase in enrolment growth. Only 23 per cent of school students are enrolled in private sector institutions, notably lower than the GCC average of 30 per cent, indicating that there is plenty of room for growth.

In 2017 the MoE issued a raft of regulations and re-established the Private Schools Rating Office (PSRO) to address this issue.

The PSRO is tasked with the responsibility of classifying Oman’s private schools into groups based on the quality of education through a neutral assessment process. An initial experimental stage of classification was undertaken in the 2018/19 academic year. The primary goal of the assessment is to both rank schools and draw a roadmap for how private institutions can consistently improve their offering.

One of the top priorities of NES 2040 is to support the use of IT and e-learning in schools and HEIs. Thus far, the uptake of education technology has been limited, but authorities are working to make Oman a regional centre in this regard.

In September 2019 Oman hosted the MENA Innovation Conference in Muscat, which welcomed ministers and senior officials for education, ICT, science and technology, and higher education from Oman and throughout the region, along with representatives from schools and universities, and ICT private sector actors.

The MoE works with partners like Cambridge University to retrain teachers and redevelop curricula to promote studentfocused learning that uses education technology to strengthen two-way communication. The MoE and the Ministry of Higher Education, Research and Innovation aim to roll this out across schools and HEIs in Oman.

Meanwhile, SQU has led the way among HEIs in adopting e-learning strategies. It has piloted a series of Massive Online Open Courses, most recently launching a short, well-received online Arabic-language course on digital citizenship. With a growing private sector and sustained demand for quality education that meets international standards, Oman is an attractive prospect for foreign investment.

Heartiest felicitations to His Majesty Sultan Haitham bin Tarik and the people of Oman on the joyous occasion of the 50th National Day of the Renaissance

S.J.Abed & Al Sulaimi Catering Group L.L.C is one of the Sultanate’s major industrial catering service & facility management providers.

First established and commencing operations in 2008 in Oman, we are ISO 9001 / 14001 / 22000 & 45001 certified, and a company that has been recognized and awarded several local and international quality & safety awards. OPAL & JSRS registered, all our operations strictly practice the highest international standards of HSE, HACCP and QA/QC guidelines and procedures.

We are specialized in working with large organizations especially in the Oil & Gas sector and have vast experience in the fields of industrial catering, housekeeping, laundry, janitorial, general maintenance, facility management, camp and permanent accommodation along with all other services related to life support services including waste management, pest control and medical services. We are capable of executing turn-key, EPC & BOO projects.

We are experienced in operating in harsh, remote and challenging environments such as onshore, offshore, island, swamp and desert areas. Wherever the location and whatever the required scope we always cater to our clients’ needs.

P.O.Box 1043, Postal Code 130, Azaiba, Sultanate of Oman. Villa No. 118, Way No. 65, North Al Hail, Muscat.

Telephone: +968 2428 9922, +968 2428 856, Email: info.sjabedalsulaimi.com Website: www.sjabedalsulaimi.com

INFRASTRUCTURE

COMPREHENSIVE AND ROBUST UNDERPINNINGS Successive five year plans, complemented by strategic longer-term developmental blueprints have helped channel billions of Omani rials in investment in the development of essential infrastructure

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ive decades of steady and judicious investment in the country’s infrastructure development has bequeathed for Oman and its people healthy foundations – some more robust and comprehensive than others – benefitting all facets of economic and social life in the Sultanate. While some sectors, notably road transportation, education and healthcare, for example, have been elevated to world-class levels, others continue to develop and strengthen in line with the country’s evolving priorities and growth needs. Indeed, no sector of national import can claim to have been neglected or discriminated against in the allocation of funds and resources based on strategic priorities and objectives. In the upshot, Oman currently enjoys a relatively high degree and standard of infrastructure development, spanning every conceivable realm of the country’s social and economic life. This includes road, maritime and air transportation, power and water services, education and healthcare, environment, vocational training and skills development, social and cultural services, women and child care services, security, telecom and broadband, agriculture and fisheries, industry and manufacturing, R&D and scientific innovation, and so on.

This longstanding commitment to the country’s allencompassing infrastructure development has been reaffirmed by the government in its recent report to the United Nations, outlining progress made in the achievement of the UN Sustainable Developmental Goals (SDGs). This commitment is enshrined in SDG-9, which calls upon nations to ‘Build resilient infrastructure, promote sustainable industrialization and foster innovation’.

Superior road network Exemplifying the high standard of Oman’s infrastructure development is the country’s road network, which has witnessed continuous growth through the implementation of arterial carriageways and secondary roads, supplemented by a programme of dualisations, construction of overpasses and underpasses, and so on. The network countrywide has been progressively upgraded and modernized to enhance motoring safety and efficiency. In addition to the expanding network of paved roads, rural areas of the country are being linked to urban centres by relatively well-maintained graded roads, thereby contributing to social connectivity and economic development.

Also benefiting from sustained investment are the country’s three main maritime gateways at Sohar, Duqm and Salalah. All three have registered significant upticks in cargo throughput, fuelled in part by investments in, among other things, remote controlled giant cranes with the ability to cater to the largest

cargo ships in operation, and new technologies that enable digital and paperless import and export procedures. The overall competitiveness of these ports has been enhanced as a result.

Indeed, a recent international report on sustainable economic development progress places Oman is in the second quartile globally when it comes to well-being. In the report by BCG, Oman outperforms other GCC countries in the dimensions of economic stability, civil society, governance and environment, but is losing ground across other dimensions, particularly employment and income. The report found that wealthier countries show higher well-being levels; overall, Oman’s wellbeing performance is good and improving. The country is on par with the global average when it comes to converting wealth into well-being, and of countries with a similar starting level of well-being, Oman is in the 3rd quartile of change. Oman is improving in infrastructure, education, economic stability, governance, and employment. Conversely, the country is good but losing ground in income – it continues to outperform global counterparts in this dimension, it noted.

Land use strategy With a view to sustaining Oman’s infrastructure and economic development well into the future, the government has embarked on the formulation of the framework for a national and regional land use strategy. The National Spatial Strategy, as it is called, is a billed as a landmark project that will have a huge impact on the future spatial development of Oman. The project will enable decision-makers and planners to, for example, identify the best suitable locations for urban development, investment in infrastructure, such as roads, public transport, electricity, water and sewage, and so on. The erstwhile Supreme Council for Planning, now integrated into the Ministry of Economy, is setting up in a participatory way a solid framework for guiding the above, through the development of the Oman National Spatial Strategy (ONSS). This first ever initiative of its kind will contain a national strategy on the desired key spatial developments till 2040 with elaborated regional strategies for all governorates.

It will also include implementation programmes and proposals for a legal planning framework, a new planning information system and capacity building programmes.

Enhancing prosperity with improving the environment when completed, the ONSS will provide a comprehensive spatial framework for directing, organizing and implementing sustainable high quality urban and rural development in the Sultanate of Oman for the next 20 years. It is intended to provide incentives for enhancing socio-economic prosperity and improving environment for future generations. In short, a new solid framework for a national and regional land use strategy must ensure a more balanced sustainable socio-economic and spatial development in the Sultanate. It will also provide guidance and directions for local structural and detailed plans to be developed later, as well as for the consecutive five-year

INFRASTRUCTURE

national development plans. As part of the ONSS, regional spatial strategies for each governorate in the Sultanate will be elaborated. Each regional spatial strategy will comprise a single development plan with related regulatory instruments at the local level. The regional spatial strategies will be important building blocks of the ONSS, which aims to integrate them into one national strategy with one vision, regulatory instruments and tools for implementation.

Infrastructure fund With government expenditure increasing constrained by the slump in oil export revenues, a key infrastructure fund is preparing to step in to finance critical public sector projects, among other initiatives, in partnership with the private sector.

Oman Infrastructure Fund (Rakiza) was established by the erstwhile State General Reserve Fund (now part of the Oman Investment Authority in 2018 to work alongside international financial investors in the implementation of infrastructure projects across a number of strategic sectors in the Sultanate.

The Fund – the first of its kind in the Sultanate – has been uniquely structured to enable foreign equity investors to explore opportunities in Oman’s infrastructure growth story.

Rakiza has a unique sort of proposition – a fund structure that allows equity investors to participate in strategic investment areas such as Renewables, Oil & Gas, Social Infrastructure, Power and Water, Telecommunications, Transport & Logistics, and the Environment.

Illustrating the increasingly important role being played by the private sector in fuelling economic and infrastructure is the example of Khazaen Economic City. This new integrated economic city, under early stages of development at Barka just outside Muscat Governorate, will be the home of Oman’s first dry port, besides multi-mix residential units, entertainment facilities, retail outlets, international schools and modern health care centers. Khazaen will be linked through the proposed railway project in the future, making it an ideal location with multimodal transport options. Khazaen is the ideal logistics, warehousing, light industrial and commercial hub linking the main modes of transportation in and out of Oman. The capital region itself is set to host an equally ambitious development integrated with its ultramodern new Muscat International Airport. Oman Airport Cities is an initiative of Oman Aviation Group (OAG) to create new economic clusters around the nation’s international and domestic airports, opens up an array of investment opportunities encompassing logistics, cargo storage, light manufacturing, processing, hospitality and ecommerce, among other areas. Oman Airport Cities will offer world-class commercial, retail, hospitality, MICE, leisure

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and logistics hubs and clusters in close proximity to Muscat International Airport, Sohar International Airport and Salalah International Airport. Oman Aviation Group was set up by the government to spearhead the development of a thriving national aviation ecosystem in the Sultanate in alignment with the nation’s long-term economic development. Part of its broad-based strategy is to build Airport Cities around Muscat and Salalah international airports, harnessing investments already made by the government in state-of-the-art passenger terminal and air-cargo infrastructure, while also leveraging Oman’s strategic location in the region. Muscat Airport City – the Group’s signature project – features as many as five different clusters each centring on a specific investment theme.

The biggest of these is the Free Zone set on a 152-hectare site extending along the southern boundaries of the airport complex. Investments targeted within the Free Zone cluster include general light industry and assembly operations that are dependent on air transport, high value fish processing, pharmaceutical distribution hubs, ecommerce activities, and regional distribution hubs for aircraft manufacturers. Also envisioned within the Airport City are dedicated clusters for Logistics (24 hectares), Hospitality (12 hectares), Aviation (53 hectares), and Business (114 hectares).

Digital transformation Importantly, Oman’s infrastructure development is not limited to physical structures such as highways, ports, power grids and telecom networks. It also includes digital infrastructure that is indispensable to the Sultanate’s aspirations to build a knowledge economy, support the growth of e-commerce and fintech, and generally ensure it is fully integrated into the global digital and cyber ecosystem. Noteworthy is the example of the Oman Digital Strategy, which aims to transform the Sultanate into a sustainable knowledge society by enabling the Information and Communications Technology (ICT) sector to enhance e-government services, enrich the business sector, and empower individuals to digitize. The strategy focused on six main axes that are integrated to implement Oman’s Digital Vision through a set of key objectives including initiatives and projects to support the country’s drive towards a knowledge-based economy.

As part of the implementation of the Digital Oman Strategy, several projects and initiatives have been implemented, including the provision of next-gen IT and telecom infrastructure, establishment of e-payment gateway, the national data center, the Oman Governmental Network, the Innovation and Support Center, the provision of electronic certification, the electronic submission of tenders (e-Tendering), information security, broadband, and e-government and smart services.

Warmest Greetings to His Majesty Sultan Haitham bin Tarik and the people of the Sultanate of Oman on the joyous occasion of the 50th 50 th National Day of the Renaissance

CONTRIBUTING TOWARDS THE NATION BUILDING FOR THE PAST THREE DECADES

Civil Construction Highways & Highway Structures Airports & Concrete Pavements Sewerage networks & STP Electromechanical Works HT Electrical Networks Water Supply Networks Aluminium & Glazing Joinery GRC & Welding

P.O. Box: 2053, Postal Code: 111, Seeb, Central Post Office, Sultanate of Oman Tel: +968 2450 2581/82/83 • Fax: +968 2450 2532, Email: alwatanyiah@alwatanyiah.om • www.alwatanyiah.om

MANUFACTURING

INDUSTRIAL UPSURGE The industrial sector’s longstanding contribution as one of the main pillars of Oman’s economic development is set to be ramped up once the Manufacturing Strategy 2040, an ambitious blueprint for the sector, is implemented in earnest with effect from next year

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eginning life as a nascent economic sector at the dawn of Oman’s modern renaissance, the country’s manufacturing industry is on the cusp of a ‘coming of age’ moment. Over the next decade, the Sultanate is set to add, among other things, automotive vehicles, high-end pharmaceuticals and potentially even seagoing ships to its manufacturing base, representing a sea-change from its current focus on predominantly run-of-the-mill products, such as foodstuff, marble tiles, cables, and so on.

Indeed, the manufacturing sector has been growing at a healthy clip since the 1980s, when the foundation stone was laid for the country’s first industrial cluster just outside the capital region.

Four decades on, the Sultanate boasts a network of eight industrial parks, and counting. At least three new clusters are planned for development at key locations around the country, while existing ones are being progressively expanded to make way for sustained investment inflows. Total investment in the manufacturing and industrial sector (outside of free zones and economic zones) topped RO 6.57 billion by the end of 2018. This includes around RO 1.6 billion in foreign investment. The sector’s contribution to the gross domestic product (GDP) has reached an impressive 9.6 per cent, generating RO 4.3 billion in export revenue for the country in 2018. Manufacturing also sustains the livelihoods of 32,335 Omani nationals. (as of end-2019)

Industrial Cities Overseeing the Sultanate’s thriving network of industrial cities is the Public Establishment for Industrial Estates (Madayn). These are located at Rusayl, Suhar, Raysut, Nizwa, Sur, Al Buraimi, Samayil and Al Mazyona Free Zone. As of end-2019, they were collectively home to over 2,300 industrial and manufacturing units, including around 1,800 that are fully operational. Pursuant to the government’s decision to designate the manufacturing sector as one of five thrust areas to drive Oman’s economic diversification, Madayn has begun formulating its own Vision 2040 strategy – a blueprint aligned with the objectives set out in the overarching Oman Vision 2040 roadmap. The goal is to support the development of world class business cities that resonate with Oman’s distinctive identity. Madayn also envisions a major role for the private sector in the development and operation of integrated business cities based on the PPP model.

Al Rusayl Industrial City: The nation’s first industrial park, Al Rusayl Industrial City is now home to 334 factories set up with an investment totaling RO 733 million. More than 21,000 people are currently employed in this cluster, which extends over an area of more than 10 million sqmetres. The hub also exemplifies a landmark effort by Madayn to bring in private players to operate and manage its industrial parks. Oman Investment and

Development Holding Company (Mubadrah), which was recently assigned operation and management of Al Rusayl Industrial City, is currently implementing several infrastructure enhancement projects at a cost of RO 32 million. In addition to redeveloping and modernizing the entrances to the hub, the company is also supporting logistics and land rehabilitation initiatives.

Suhar Industrial City, the biggest of Madayn’s industrial parks by investment, is among the most diverse as well. By the end of 2019, as many as 416 factories were in operation or development in the cluster, bringing in investments totaling RO 2.2 billion.

Located in the close proximity of Sohar Port and Freezone, the hub has been pulling in new industrial investment at a healthy pace. Madayn is now focused on adding a seventh phase to its capacity, underscoring its strong investment appeal.

Sur Industrial City is set to grow by leaps and bounds over the next few years. Madayn announced recently that it is currently evaluating new project applications involving investments totaling in excess of RO 1 billion. Proposed projects in the pipeline include a major petrochemicals venture, and mining and technology-related investments. As many as 127 projects, including a number of world-scale plants, are currently located within the industrial park. Sur will also host a first-ever cluster dedicated to Small and Medium Enterprises. Separately, the private sector has been invited to invest in a number of value-adding facilities, such as a labour township, integrated engineering workshop, facilities building, and shipyard complex.

Raysut Industrial City has seen a steady uptick in investments given its proximity to the transshipment and logistics hub at Salalah. More than half of the 205 industrial and manufacturing units assigned plots within the cluster are now fully operational, with a further 44 under various stages of development. Total investment in the cluster has reached RO 438 million as of end2019. The hub hosts a thriving food processing sector. As many as 30 factories are involved in, among other areas, in fish freezing and canning, flour and pasta, frozen chicken, vegetable oils, drinking water packaging, biscuits, and potato chips. A further 55 factories produce buildings materials, such as cement products, gypsum products, pipes and tanks, packaging materials, marble, and industrial stones. Pharmaceuticals production is a promising new segment in the cluster, with three plants in various phases of development and operation. Other factories operating at Raysut Industrial City focus on the production of agricultural fertilisers, plastic products, paper products, recycling, dry storage, commercial projects, oil and petrochemical projects, aluminium products, animal feed, and boat-building.

Nizwa Industrial City has pulled in RO 369 million in industrial investment to date. Covering an area of 3 million sqmetres, the hub is home to nearly 150 units. Spurred by strong investment interest in the park, Madayn has begun working on the third and

MANUFACTURING

fourth phase expansions, designed to add a further 1 million square metres to the cluster.

Buraimi Industrial City has seen strong investment inflows in recent years, fuelled by its geographical proximity to neighbouring UAE. Samayil Industrial City, one of Madayn’s newest additions, has attracted 155 projects to date with investments totaling RO 85 million.

Al Mazuna Free Zone: Administered by Madayn, this free zone straddles the border between Oman and Yemen in Dhofar Governorate. A significant uptick in the flow of commercial goods through this facility has prompted Madayn has set up a dry port within the free zone.

Business-friendly Seeking to enhance the investment appeal of its industrial cities, Madayn recently overhauled its regulatory regime to make it more business-friendly. New regulations now play a key role in setting rules, procedures and legislative frameworks to organise the process of attracting local and international industrial developers to invest in building, managing and operating specialised investment cities; determining the period of usufruct contracts and investment agreements for developers to be 99 years according to the project; and opening the way to attract global and regional experiences and expertise in the field of building, managing and operating economic cities, and organising the contracting with them according to management and operation agreements of up to 25 years.

Long-term strategy For its part, the Ministry of Commerce, Industry and Investment Promotion – the principal policymaker for the sector - has been quietly putting into shape a long-term strategy that seeks to entrench the sector’s contribution to economic development and GDP growth. The ambitious Manufacturing Strategy 2040 seeks to support the delivery of the country’s economic growth objectives enshrined in the Oman Vision 2040 blueprint. Phase 2 of the Manufacturing Strategy 2040 is being developed in collaboration with the United Nations Industrial Development

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Organization (UNIDO). Phase 1 focused on, among other themes, industrial diagnostics, which identified upcoming manufacturing priorities across knowledge-driven (high-tech), capital- and resource-intensive industries; and the enablers of governance, technological and human capital to promote those priorities. The current second phase has its sights on 15 policy areas and will focus on how and when to achieve those manufacturing priorities.

Phase 2 of the landmark strategy will seek to make an estimate of the manufacturing investment required to achieve the socioeconomic goals set out in the roadmap. Additionally, it will look at technical and vocational education and training (TVET) programmes necessary to upskill and reskill the workforce in order to enhance the readiness of Omanis to the upcoming demands of the Fourth Industrial Revolution (4IR). There will be incentives to encourage R&D, in-country value and entrepreneurship (SMEs) as well as mechanisms to attract and adapt advanced foreign technologies, such as, 3D printing, Internet of Things, robotics and energy-efficient solutions will be devised to increase the efficiency of the Omani productive structure. As part of Manufacturing Strategy 2040, the Ministry is also developing a smart incentive scheme to attract foreign and local investment into strategic manufacturing areas. The Ministry considers international good practices and trade regulations (such as WTO) as reference points for developing a smart incentive scheme to ensure the Sultanate’s manufacturing development and trade are inclusive and competitive.

The smart incentive scheme covers the areas of import duty, corporate income tax exemption, procedure of licensing, financial and tax incentives. To this end, the Ministry is working closely with other government agencies, namely, the Tax Authority, Ministry of Finance, Oman Chamber of Commerce and Industry, Royal Oman Police, Public Authority for Special Economic Zones and Free Zones, among others.

Boding well for the sustained growth of the industrial and manufacturing sector in the Sultanate is the recent Royal Decree 105/2020 establishing the Public Authority for Special Economic Zones and Free Zones.

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PORTS AND LOGISTICS

A NEW GROWTH ENGINE FOR OMAN

Oman hopes to leverage the country’s highly developed port and maritime infrastructure to sustain the growth of a new, hugely promising economic sector – logistics

Sebastian Castelier/Shutterstock

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s global supply chains ground to a halt in response to drastic measures adopted by countries to halt the spread of the coronavirus, imperilling the flow of desperately needed foodstuff and other essentials, Oman looked to one sector to keep the country relatively well-supplied during the pandemic: Ports and Logistics. Indeed, with all but a handful of flights grounded at the height of the global lockdown, the port and logistics sector served as a vital lifeline for life-sustaining trade flows.

Although a fledgling sector currently, the logistics industry is being positioned by the Omani government to become an engine of economic growth in its own right, potentially rivalling energy as the country’s economic mainstay. This ambition is the centrepiece of the Sultanate of Oman Logistics Strategy (SOLS) 2040, which enshrines a vision to secure a place for Oman among the world’s top 10 logistics-centric economies by the year 2040. It is currently ranked 43rd in the World Bank’s Logistics Performance Index (LPI), up from 62nd in 2012.

SOLS 2040 sets out a number of objectives designed to boost the share of the logistics sector in the GDP to reach RO 14 billion in 2040, alongside the creation of 300,000 jobs in the sector. It seeks to leverage the Sultanate’s many competitive advantages, notably its strategic location, as well the country’s modern roads, ports, airports, free zones and industrial estates.

Spearheading Oman’s transformation into a global logistics hub is Asyad Group, a wholly state-owned umbrella organization representing government stakes in various port, shipping and repair, road and maritime transport, ferry services, terminal operations and free zone developments in the Sultanate. It was under Asyad’s auspices that shipping and maritime links with countries around the world were dramatically ramped up during the pandemic to ensure timely flows of goods in and out of Oman. As many as 200 weekly maritime services were operated to 86 commercial ports across more than 40 countries at the height of the pandemic. Supported by enhanced technological capabilities, world-class clearance procedures and strong safety measures, the services enabled the direct import and export of a variety of goods, commodities, vegetables, fruits and meat globally -- linking the Sultanate’s ports to other key Gulf, regional and international ports.

Traders and importers were invited to take advantage of Asyad’s direct services, which supported an increasing number of merchants and importers in bringing goods to Oman. They availed themselves of Oman’s excellent facilities and benefited from reduced shipping, handling and unloading charges.

Direct services were operated to key international shipping routes that included 14 weekly services to nine ports in the US, three in the UK, three in the Netherlands, five in Germany, and further European ports in Italy, Spain, France, Turkey, Belgium, Malta, Romania, Ukraine, and Russia. Across Asia, Oman operated a wide network of direct routes, including 29 weekly routes to eight commercial ports in China, 21 weekly routes to Indian ports, and services to ports in South Korea, Singapore, Japan, Malaysia, Pakistan, Sri Lanka and Thailand.

Enhanced connectivity In line with the Omani government’s strategy to build a global logistics hub in the Sultanate, Asyad has been striving to establish new alliances with international shipping companies to harness the full potential of Oman’s ports and provide trusted global shipping solutions. Direct shipping routes operated from Omani ports now serve several ports in Africa, the Mediterranean and the Red Sea including; Port Said and Damiettain Egypt, ports in Djibouti, Kenya, Tanzania, Madagascar and Sudan in addition to Morocco and Beirut. The direct shipping lines schedule also includes 60 services to GCC ports.

Furthermore, Omani ports continue to provide importers with highly efficient customs clearance. Importers benefit from concessions on handling, shipping and unloading fees and extended free storage periods for goods destined for local markets. Furthering their commitment to their customers, alongside the Oman Chamber of Commerce and Industry, Asyad recently launched a call center for all customer inquiries and requests.

In addition to its mandate as the logistics sector’s flagship, Asyad also seeks to foster investment opportunities in this promising industry. It has set up a dedicated arm, named ‘Marafi’, to operate and manage port developments and related investments in Oman and the wider region. Marafi currently has Port Sultan Qaboos, Port Khasab, Shinas Port, and Suwaiq Port in its portfolio.

Recently, Asyad announced the launch of the first shipping line between Oman ports and Iraq’s Umm Qasr Port. The move

PORTS AND LOGISTICS

bolsters the Group’s efforts to expand the maritime transport network between Oman and the world, facilitate cross-regional trade, boost direct export and import and provide logistics solutions to its customers.

This direct line will start operating a weekly trip connecting Oman ports (Salalah, Duqm and Suhar) with Iraq’s Umm Qasr Port. The service affirms Oman’s well-established position as a logistics hub and seeks to shore up direct export and import of goods from their countries of origin. The newly introduced direct line not only will increase the volume of intra-regional trade, but it will also open up new investment prospects between Oman and Iraq.

Logistics supply chain At the same time, several recent decisions taken by the Omani government have helped accelerate the pathway to achieving the Sultanate’s logistics ambitions. In September, the government ratified its accession to the Convention on the Contract for the International Carriage of Good by Road (CMR) and the Additional Protocol on the Electronic Consignment Note (e-CMR) under the Royal Decree 114/2020. The accession to e-CMR marks a significant step forward for Oman’s wider global adoption of digital transport and logistics systems – including customs transit. Oman recognizes that the e-CMR will support the efficiency of logistics supply chain-enabling a streamlined and a more secure flow of goods. By joining this UN Convention, Oman will stand at the forefront of digitalization of road transport, standardizing contracts both locally and internationally.

CMR is another building block towards the finalization of national frameworks and legislations designed to enhance Oman’s transport system and help reach the goal of more effective GCC trade integration. Thanks to a standardized bill of lading and clear-cut responsibilities among the contracting parties, CMR will help regulate the international road transport operations of the private sector in Oman. CMR keeps pace with the rapidly changing global supply chain, addressing the operational hindrances of trade by road, reducing error rates and increasing overall efficiency of logistics.

The UN Convention ratified by 55 countries provides a competitive environment for carriage of goods among the member states and the rest of the world. This is enabled through the various contractual partners including freight forwarders, transit operators as well as road transport and customs stakeholders.

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Just earlier, Oman became the latest country in the GCC region to operationalise TIR – a global treaty that enables goods to be shipped from a country of origin, through transit countries, to a country of destination in sealed load compartments that are controlled by customs via a multilateral, mutually recognised system. TIR offers the easiest, safest and most reliable way to move goods across multiple international borders, saving time and money for transport operators and customs authorities.

The timely activation of the convention, coming against the backdrop of a 19 per cent decline in turnover for operators across the Middle East – stemming from the COVID-19 pandemic – is seen as opportune for Omani road freight operators, according to the IRU, the world’s road transport organisation representing bus, coach, truck and taxi operators globally.

The Sultanate had committed to becoming TIR operational at the 2018 IRU World Congress held in Muscat. Since then, IRU, Oman Customs and IRU members Asyad and Sinyar (the integrated brand of Mwsalat Oman and National Ferries) have collaborated closely to successfully implement TIR in Oman.

Vital lifelines Central to the success of Oman’s logistics growth aspirations are its three principal maritime gateways at Sohar, Duqm and Salalah. All three hubs continue to play a critical role in the development of a robust logistics sector, on the one hand, and fuel Oman’s economic development, on the other.

Port of Duqm, the newest of the three gateways, is preparing to commence full-scale commercial operations – a move that will unlock its full potential as an enabler of growth across the adjoining Special Economic Zone (SEZ) and the wider Wusta Governorate. Conceived initially as a multipurpose port anchoring a mega industrial and economic hub, the port now has ambitions to become a major transshipment hub for a range of cargoes.

Duqm Port aims to become a major transshipment hub for containerised, dry bulk, liquid bulk and automotive cargoes as well as promoting its position to feeder operators and main liners. Furthermore, the port seeks to become a transit port connecting the East with the West.

With the imminent completion of the commercial berth, Port of Duqm will be equipped to provide a wider range of services.

Currently, Port of Duqm has a yard capacity of approximately

Heartiest felicitations to His Majesty Sultan Haitham bin Tarik and the people of Oman on the occasion of the 50th National Day of the Renaissance

• Handling Container Vessels, Break bulk, RO/RO, Cruise Vessels, Heavy Lift & Tankers • Handling Vessels at Duqm Dry Dock • Clearing & Forwarding • Transport • Ship Chandling • Air-Freight • ISO 9001:2015 Certified

Pakistan National Shipping Corporation

HEAD OFFICE P.O Box 1068, Ruwi 112 Sultanate of Oman Tel: +968 24714221 Fax: +968 24711114

MUSCAT Delivery Order Office Tel: 24711713, 24711358 Fax: +968 24715212

Email: bhacker@bhacker.com

SOHAR Tel: 26752500 Fax: 26752505 Email: sohar@bhacker.com

SALALAH Tel: 23211687 Fax: 23210243 Email: salalah@bhacker.com

DUQM Tel: 25218887 Email: duqm@bhacker.com

PORTS AND LOGISTICS

40 hectares and a berth length of 1200m available at its commercial berth for carrying out port and terminal services to various industries. For now, it is primarily focusing on project and break bulk cargo, dry bulk cargo and containerized cargoes, as well as the accommodation of various navies. By the end of this year, the yard at the commercial berth will increase to 70ha, and Port of Duqm will get full access to the 2.2km berth.

Significantly, 2019 was a record breaking year for the port. The port handled about 1.3 million metric tonnes (MT) of cargoes, comprising around 600,000 MT of exports and 700,000 MT of imports. The port also received 606 vessel calls, an increase of 45 per cent over the previous year. Small numbers of containers are also being handled at the port, thanks to an Express Feeder Service operated by Oman Shipping which calls Duqm on a weekly basis. Volumes are expected to grow as various industries envisaged at the SEZ commence operations.

In the north of the country, Sohar Port and Freezone, the Sultanate’s principal commercial gateway, has benefited from the implementation of a sound business continuity plan that has helped the logistics hub maintain its operations and deliver high-quality services to its tenants and vessels despite the impact of the pandemic.

Q2 2020 saw an increase of 112 per cent in ship-to-ship (STS) throughput, compared to the values of Q2 in 2019. This has resulted in a growth of STS operations by 16 per cent and anchorage calls by 4 per cent, a rise that is the result of Sohar’s strategic location as a gateway between the East and West and a myriad of direct connections to ports around the world.

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The second quarter of 2020 saw several key highlights, including the introduction of two new services that facilitate ease of setting up business at the Port or Freezone and attractive land lease opportunities at Sohar Port South and Terminal 2D. C Steinweg Oman, the operator of the multipurpose general cargo terminal at Sohar Port and Freezone, also signed an agreement with Sohar Flour Mills for the handling of shipments of wheat and grain at the port – a move that will also aid Oman’s efforts to strengthen the country’s food security.

In the south, Port of Salalah too reported strong growth during the first half of this year, handling 2.199 million TEUs compared to 1.941 million TEUs during the same period in 2019, which is an increase of 13%. Revenues from the Container Terminal also grew by 3% compared to the same period last year. The General Cargo Terminal handled 7.308 million tons of cargo.

Significantly, the port secured three additional shipping line calls during Q2, 2020, at the peak of the COVID-19 situation.

These services add increased connectivity to and from Salalah enabling the local trade access to some key regional markets.

Mediterranean Shipping Company (MSC) has added a call to Salalah on its premium Himalaya Express which provides additional direct connectivity to North Europe, while the JJS service of Global Feeder Shipping has enhanced connectivity to ports in the Red Sea like Djibouti, Saudi Arabia and Jordan.

Global Resources and Shipping, a niche operator, has also commenced a regular service into Yemen with plans to expand to other ports where traditional shipping lines cannot serve.

We salute the vision and leadership of

His Majesty Sultan Haitham bin Tarik

and extend our greetings to His Majesty and the people of Oman on the occasion of the 50th National Day of the Renaissance

Al Oruba International Co LLC

P.O. Box 618, P.C. 130ŘŒ Muscat, Sultanate of Oman Tel: (968) 24590927, Fax: (968) 24593872ŘŒ Mobile: (968) 99478858 Email: oruba@omantel.net.om

REAL ESTATE

THE BUILDING BLOCKS OF A MULTIFACETED ECONOMY

As the Sultanate’s promising real estate industry gears up to formulate a synergy with the oil and gas sector to build on the nation’s GDP, it must weather shrinking residential demands and a challenging post-pandemic-era to present an upturn in ROI

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s a year chock-full of ups and downs, 2020 has been nothing short of a global battle of wits. And while the Sultanate has been at the helm of the region’s fight against the Novel Coronavirus (COVID-19), the nation has also had its own set of challenges to overcome – from implementing resilient strategies to cope with a global recession arising from the pandemic and dwindling oil prices, and stabilising a quivering labour market – all while looking ahead to achieve the goals set under Oman Vision 2040.

The multi-billion Rial-strong real estate market has long been touted as an extenuating asset that Oman could potentially bank on as it aims to shift its focus from a hydrocarbon-funded economy to a diversified knowledge-based economy. This would mean leveling the current playing field where the oil and gas sector contributes up to 37 per cent of the nation’s overall Gross Domestic Product (GDP), while also plugging a 16.7 per cent budget deficit that is, as per reports published by the International Monetary Fund (IMF), expected to upsurge to 19 per cent by the end of 2020.

Building on the foundations of the real estate sector are activities such as the sale of land and properties, grants, inheritance, exchange, mortgage and mortgage redemption, usufruct (which includes a newly-implemented ministerial usufruct law focusing on expat investors), and divisional transactions that encompasse sactivities in integrated tourism complex (ITC) projects aimed at attracting foreign and local investors.

Volatility in the sector arising from the oil price crash of 2016 instigated the infamous property trade value drop of 2017 –but the sector has slowly and steadily negotiated turbulent times to create an asymptotic average property trade value year-onyear as its values closed at RO2.7 billion in 2019, which was a 4.9 per cent increase from its closing in 2018.

This growth – though marginal – is continuing to fuel new projects in Oman. The RO400 million Naseem A’Sabah project currently sits atop Oman’s pool of high-value real estate projects, which are collectively rated at RO61 billion as per a report published by Ventures Middle East. While news on the project is scarce, the premium waterfront ITC project is expected to take shape by the Al Mawaleh region in Seeb over the coming decade.

This is followed by the RO360 million Quriyat ITC tourism complex, which is expected to begin construction this year.

The 15-year project will include the Governorate’s first water park, alongside a fully-equipped golf course, star-rated hotels, and 3,000 residential units – all comprised within 1.3 million

sq.m of real estate. Other notable ITC projects that are taking shape include the RO246 million Al Nakheel project in Barka;the RO120 million Sur Gate project;the Ras Al Hadd Resort project, which will house a total of 700 residential units;and the Hawana Lagoons Salalah project.

Existing ITC projects include developments by Al Mouj; Barr Al Jissah; Jebel Sifah, Saraya Bandar Jissah Muscat Bay, Salalah Beach Resort; and Muscat Hills and its developments such as the Muscat Hills Golf and Country Club, Muscat Hills Resort, Dive Center, the recently-completed Pearl Muscat residential complex, and the Links at Muscat Hills. Meanwhile, Sandan Development launched its first RO6 million beachfront residential project in February 2020. The project, which is titled ‘Al-Seef’, brings 75 luxury waterfront villas over an area of 24,000 sq.m in Al-Ashkharah.

However, sought-after ITC developments are expected to receive strong competition from other privately funded projects after the Ministry of Housing and Urban Planning announced in October 2020 their decision to grant non-Omanis usufruct rights for ownership of limited lands and properties in multistorey buildings dedicated to commercial and residential purposes in some sites around the Governorate of Muscat.

The sites offered for usufruct include Phases 1, 2 and 3 in the Wilayat of Baushar; Phase 2 of Al Khuwair; Phase 2 of Wattayah; Phases 1 and 2 of Ghala Heights; Phase 2 of Misfat; Phase 5 of the Wilayat of Seeb and Al Mawaleh al Janoubia; Phase 2 of Al Khoud; Phase 7 of Mabelah al Janoubiia; Phase 1 of Al Hashia in Al Amerat, Al Mahaj; and Phases 2,3,4 and 5 of Madinat al Nahda.

While the ministry hadn’t revealed more details on whether expats and foreign investors will receive incentives on visas such as residency rights at the time of publishing, the government is reportedly banking on this decision to fillip real estate investment projects that are capable of causing a qualitative shift and establishing a lucrative business environment in the sector by pumping in liquidity. The minimum price for expats to purchase these properties in Oman has been set at RO45,000, and those who buy these flats can either live there personally or allow relatives of the first-degree to reside within.

The government has also made value-added tax (VAT) exemptions on the resale of real estate properties and leasing of residential properties and have reduced real estate fees from five per cent to three per cent to further incentivise the sector.

Whether this could stabilise the reeling local rental market – with rental rates dropping by 25 per cent in 2019 as per an Oxford Business Group report – is yet to be seen; however, the onset of the pandemic, coupled with oversupply and an exodus of expat workers could hamper an instant boom in the renting market.

REAL ESTATE

A National Center for Statistics and Information (NCSI) report shows an exodus of qualified expats since 2016. The number of highly qualified expats dropped by 17.6 per cent between 2016 and the Q1 of 2020, while the total number of expat employees dropped by 6.8 per cent during the same period. Expats, who now comprise of 42 per cent of the overall population,play a significant role in influencing rental demand rates.

The market is also expected to receive an additional supply of residential properties between 2020 and 2021 as per Cavendish Maxwell’s ‘Property Market Report 2020-2021’. This includes the Habitat project with 44 residential units, 44 retail units, and 118 office units in Al Khuwair; The Myriad Muscat; Phase 2 of the Al Hail Green Residential Development; the Al Muna Gardens in Baushar; and The Residences at Mandarin Oriental.

On the contrary, this spells well for renters. We learn that rental values in high-grade localities such as Madinat As Sultan Qaboos, Azaiba, and Ghubrah North declined by around 30- to 40-per cent in 2019, when compared with the rates in 2014.

The average rents for a one-bedroom apartment in Al Mouj currently hover around the RO500 mark, while a two-bedroom villa or townhouse will set renters back RO790.

Some landlords and real estate companies are also offering better maintenance services and other incentives (such as absorbing utility charges and offering free internet connections) to keep tenants in their properties. But with increased availability, tenants and buyers are now moving into more sought-after areas in Muscat and other cities.

But, new residential projects are aplenty. A new 3,500-house project in Liwa is expected to provide accommodation to those affected by the activities of the Sohar Port. The project, which is based out of the Naber region in Oman, will include schools, mosques, a health center, power generation stations, two filling stations, parks, playgrounds, and lands for commercial establishments such as malls.

According to NCSI, the value of traded contracts in December 2019 stood at over RO263 million, while the fees collected

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amounted to over RO7 million. The total value of sale contracts in 2019 stood at over RO70.6 million through 4,674 sales transactions. Meanwhile, the total value of mortgage contracts rose to 13.5 per cent from RO1.6 million in December 2018, when compared with RO1.8 million in the same month last year; albeit, through unchanged contracts.

The first eight months of the year also witnessed a 40.8 per cent drop in the total number of residential plots allotted to Omanis, when compared with the 17,833 plots that were issued in the same period in 2019. Some 500,000 Omanis are currently awaiting land to be allotted by the ministry.

Interestingly, Oman’s growing number of small-and-mediumsized enterprises (SME) have set in motion a healthy synergy in the real estate sector – and the market has responded effectively to their requirements; such as offering flexible working and lowcost commercial spaces, as the nation observes an increase in the number of business centers and other office spaces within the capital city.

The average rates (per sq. m) of office spaces in Qurum currently range between RO5 and RO8, while upscale areas such as Shatti al Qurum register monthly rates anywhere between RO5 and RO10.

Oman’s growing retail industry has also fronted growth in the sector. The coming of premium shopping locations may pave way for oversupply in the short run, but is expected to boost the retail industry in the coming years as retail spaces are occupied to serve the growing population, states the Cavendish Maxwell report.

A long-term approach to development has spearheaded Oman’s real estate sector – and while the returns may currently seem austere, experts believe that the key to sustainably developing the sector and procuring sizeable dividends to their investments lie in how investors pay careful attention to macroeconomics and changing market climate over the coming decades; and more importantly, how they negotiate a post-COVID-era.

TELECOM

CHANGING LANDSCAPE

The telecom sector is poised for growth due to changing consumer habits, enhanced competition and a National Broadband strategy

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he Sultanate of Oman has established a progressive mobile sector which comprises substantial coverage of both 3G and 4G LTE networks. There have also been trials conducted, networks upgraded, and spectrum allocated, in readiness for 5G. In particular, the Telecom Regulatory Authority has allowed the major mobile operators, Omantel and Ooredoo the right to use a 100MHz 5G spectrum and both operators have a sizeable market share. In addition, Oman already offers a competitive mobile landscape with MVNOs being introduced over the last decade, and they have captured a small market share.

The launch of a third mobile network operator in Oman in 2020 will increase competition further. The regulator signed a strategic MoU with the Vodafone Group, along with a local consortium of investors, to form a third mobile network operator in Oman, which will be branded as Vodafone. In early 2020 the consortium agreed to lease mobile towers from Oman Tower Company.

While Oman’s fixed broadband infrastructure penetration is considered low, it is being improved upon with the building of fibre-based networks as part of Oman’s National Broadband Strategy. By 2040 it is hoped that all homes and businesses will be connected to the national broadband infrastructure

While Oman’s fixed broadband infrastructure penetration is considered low, it is being improved upon with the building of fibre-based networks as part of Oman’s National Broadband Strategy. By 2040 it is hoped that all homes and businesses will be connected to the national broadband infrastructure.

National Broadband Strategy The Oman Broadband company is the government arm mandated with building and developing the necessary broadband infrastructure in the Sultanate as stipulated in the third pillar of the National Broadband Strategy. Oman Broadband works in tandem with the concerned authorities and private sector partners to deliver that vision, thereby future proofing the online economy and investing in the digital potential of the nation.

The Company has translated the ambitious goals of the National Broadband Strategy into development plans that take into

consideration the required network framework and expected implementation timeframe. The development plan benchmarks current broadband services in the Sultanate in comparison with the regional and international best practice standards, both in terms of e-readiness and the ready availability of broadband services within populated areas.

The plan to rollout the broadband infrastructure also takes into consideration key usage patterns, population densities and projected statistics that chart the future demand for hispeed broadband services in the Sultanate. Oman Broadband’s

TELECOM

development plan aims to rapidly increase Oman’s international ranking in terms of the availability of fixed broadband services and the distribution of broadband services per 100 capita in comparison with the international and regional average.

The rollout of the broadband fibre-optic network will create the necessary infrastructure in all governorates to enable service providers to provide high speed and high capacity connectivity to citizens and residents, as well as for enterprises and government institutions. Oman Broadband aims to meet the evolving needs of the market in order to keep pace with the rapid advancement of ICT technologies.

Sector’s performance The year 2020 has been a difficult year for the telecom sector owing to the COVID-19 pandemic, but despite the challenges Omantel and Ooredoo Oman have put up a robust performance.

Omantel’s proactive measures and cost optimisation efforts enabled it to post a healthy growth in gross revenues during the first half of 2020. Omantel’s Group revenue for the period ended June 2020 reached RO 1,242mn compared to RO 1,258.9mn for the corresponding period in 2019. The Group’s revenue include the acquired business of Zain Group, which

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contributed revenues of RO 961mn.

Omantel’s domestic revenues recorded a growth of 11 per cent reaching RO288.1mn compared to RO 259.8mn for the corresponding period in 2019 with the growth coming mainly from the wholesale international business and device revenues, which are typically of low margin compared to core revenues.

Adjusted for the above, core revenues for H1-2020 is RO 221mn compared to RO 232.5mn in 2019, a decrease of five per cent, which impacted overall margins. The Group achieved an after tax net profit of RO 100.5mn compared to RO 126.5mn in 2019.

Zain Group contributed RO 94.8mn to the net profit (before noncontrolling interest) of Omantel Group in H1-2020 compared to RO 114.8mn in H1 -2019, a decline of RO 17.4 per cent. After adjusting for non-controlling interest, Zain group contributed RO 18.2mn in H1-2020 compared to RO 21.4mn in H1-2019.

Omantel’s domestic operation witnessed a 19 per cent decline in net profit in H1-2020 compared to H1- 2019. The results were achieved against the backdrop of the significant challenges posed by COVID-19 pandemic and an overall reduction in economic activity in the country on account of lower oil prices,

etc. However, proactive cost optimisation measures taken by the management has positively contributed in achieving a six per cent reduction in operating and administrative expenses YoY. Group Earning per Share (EPS) for the period ended 30th June 2020 is RO 0.032 compared to RO 0.044 for the corresponding period of year 2019.

Omantel’s total domestic subscriber base as of June 2020 (including mobile and fixed businesses) was 3.2mn (excluding mobile resellers) compared to 3.4mn of the corresponding

period of the previous year, recording a decline of six per cent over the last period. Total subscriber base with mobile resellers reached 3.9mn.

Omantel’s mobile market share (including mobile resellers) is 53.7 per cent with a revenue share of 59.1 per cent. The fixed telephone (post & pre-paid) market share is 69.1 per cent with a revenue market share of 81.1 per cent.

Ooredoo Oman registered a net profit after tax of RO 10.1mn

during the first half of 2020, down by 43.3 per cent from RO 17.8mn in the corresponding period of 2019. The company’s revenue decreased by 4.2 per cent and stood at RO 133.3mn, year-on-year, by the end of June 2020.

COVID-19 had a negative impact on the first half of 2020 revenue, primarily due to a decrease in prepaid mobile business and roaming revenues, fewer sales due to retail outlet closures, as well as the free local call offers extended to the community in support of the national ‘Stay at Home’ initiative.

This reduction in revenues was partially offset by a lower general and admin expenses compared to the same period in 2019. However, depreciation and amortisation increased

by RO 5.5mn with additional assets and new license fee amortisation. Commenting on the results, CEO Ian Dench said, “Despite a challenging quarter, we have accelerated our digital transformation with services available through our App, eShop, WhatsApp and Social Media.”

“The Ooredoo Group has been entirely engaged in extending its full support to key public sector institutions and other customers as a response to the COVID-19 pandemic. This included

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providing free services for health and emergency services workers, support to various educational institutes to enhance distance learning by providing zero rating for educational websites special support to hospitals across Oman. We signed an agreement with the Ministry of Education to provide an online portal to student and teachers for the 2020-21 academic year. In the B2B area we supported businesses in Oman with various initiatives including extension of credit terms to small and medium enterprises,” he added. “The role of the Ooredoo family in making the transformation to working from home, while keeping our business running effectively, has been tremendous.”

Overall, given the circumstances that the economy is going through Ooredoo Oman has put up a good performance, while shouldering its Corporate Social Responsibilities.

Looking ahead, Oman’s telecom sector is poised to recover and grow strongly from here. Some of the key developments in the sector like Omantel’s launch of an initial 5G network in late 2019, awarding of 15 year licenses to two mobile network operators (MNOs) in 2019; rise in VoIP subscriptions augur well for the sector. Finally, Oman is well positioned to be a technology hub in the Middle East as it is well located between Asia, Africa and Europe and has access to several submarine cable systems.

TOURISM

DESTINATION OMAN

The coming of new mega-projects, visa exemptions for citizens of over 100 countries, and a robust health tourism strategy, are all expected to revitalise Oman’s promising tourism sector as it eyes for the top spot in the MENA region

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tanding proudly as the jewel that crowns the Middle East, the Sultanate has for long charmed tourists with its enchanting forts, peaking mountain ranges, azure waters, pristine fjords, and picturesque valleys.

Little wonder, then, that Oman is a nation fondly bruited as the ‘Pearl of Arabia’. And as we enter the new decade, we witness a Sultanate that is en route and on the threshold of building an economy driven by industries away from oil and gas and more by those pertaining to tourism and sectors closely associated with it.

A strong message was sent when the nation proudly clocked 3.5 million tourists in 2019. This marked an 8.2 per cent increase over the numbers from 2018 – and as per the National Center for Statistics and Information (NCSI) has positively impacted the sector’s contribution to the Gross Domestic Product (GDP) for the year.

The onset of the Coronavirus (COVID-19) may have pushed the plug deep on major tourism developments but combined efforts by the government and private players are expected to keep Oman afloat on the tourist map as countries around the globe begin rethinking their strategies to continue building their international clout as tourism hubs.

But His Majesty Sultan Haitham Bin Tarik has called to “streamline procedures, encourage investment, promote the private sector and develop the tourism sector” in his speech that envisaged growth through the newly-revealed MediumTerm Fiscal Balance Plan 2020-2024.

This includes a new law that will allow citizens of up to 100 countries to visit Oman without a tourist visa. While details on the new law are currently scarce and the list of exempted countries haven’t been enlisted at the time of publishing this article, the rule is expected to spell well for the country as it looks to fortify its tourism sector.

The nation proudly clocked 3.5 million tourists in 2019. This marked an 8.2 per cent increase over the numbers from 2018 – and as per the National Center for Statistics and Information (NCSI)

Couple the new visa rule with an ever-expanding aviation sector, and Oman could well be en route to securing transit tourists like its GCC neighbours – the United Arab Emirates and Qatar.

The proposition builds a stronger case as Oman Air, the country’s national carrier, recently snagged the ‘Middle East’s Leading Airline of the Year’ award; and budget-airline SalamAir continues to widen its horizon and connect newer destinations with its new fleet of trusty Airbus A320neos and A321neos while keeping Oman as its local hub.

The roadmap of the Medium-Term Fiscal Balance Plan is devoid of other specifics that highlight tourism developments at the time of publishing this story, but emphasizes on the commencement of a healthy cooperation between public and private establishments to complement projects that are currently in full swing through tax cuts and exemptions, and other incentives that will allow more foreign investors to capitalise on the nation’s strong stance to build the sector.

While Oman heavily relies on leisure, adventure, and cultural tourism – the influx of tourists during the Khareef season, the

TOURISM

Even as Oman actively continues to stage its cultural roots through nature tourism to the global market, the nation is inexorably on the cusp of a major tourism overhaul

Muscat Festival, and eco- and adventure tourists thronging the mountains of Al Hajar or the golden sands of Al Sharqiyah – the nation is now heavily investing to attract business, sports, and health tourists.

One flagship tourism project that is expected to make news in the coming months is the multi-billion-dollar mixed-use Mina Sultan Qaboos Waterfront development, which will transform the face of Muttrah and the Sultan Qaboos Port with a plethora of luxury star-rated hotels, entertainment activities, and retail and premium residential complex offerings.

While the development is currently under reassessment by the Oman Tourism Development Company (OMRAN), it is understood that the government company has acquired 100 per cent stake in the project.

Other key tourism projects include a four- and five-star-hotel in Yiti (which is currently under construction), the five-star-rated Alila Salalah coastal resort in Dhofar (which is due for a 2020 launch), a four-star integrated adventure tourism project in Jebel Akhdar, and a hotel at Bassa Beach in Khasab.

On the entertainment front, construction of a Safari Park is underway in Adam. The project, which has remained silent for much of 2018 and 2019, includes a zoological park that has

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reportedly hit the 60 per cent completion mark. Other similar leisure projects include the Sur Gate project, Snow Park in the Mall of Muscat, and a Mega Theme Park in Barka.

Despite the financial and logistical challenges posed by COVID-19, the number of tourism projects expected to open this year stands at 96, as per the Oman News Agency, with preliminary approvals issued for 71 hotels. This includes three notable five-star hotels and seven four-star hotels.

This will add to the 25,408-room capacity offered by 492 hotels from 2019, and should further help the country offer premium housing for tourists. The number of breaks, camps, and green and guest houses also increased in 2019.

All of this should help Oman build an outline for its tourism sector as it begins investing in the health industry. It is understood that Oman witnesses an outflux of 100,000 patients every year to foreign countries for medical tourism owing to long waiting lists for specialised surgical procedures and surgeries.

But with the planning of three specialised hospitals in Khasab, Suwaiq, and Salalah by UK-based International Hospitals Group (IHG); and the coming of the long-awaited IdealMed Muscat Hospital in Ghubra this year, the health industry – along with the support of prevailing hospitals, clinics, and medical centers

– will undergo a thorough upgrade as it aligns itself with the government’s long-term Health Vision 2050 strategy.

The latter project, which is brought to Oman by the Oman Brunei Investment Company, Suhail Bahwan Holding Group, and IdealMed Group is due to begin serving patients this year as per media reports. A 700-bed Sultan Qaboos Hospital is also scheduled to begin construction soon to further strengthen the sector.

Oman’s tourism sector reportedly contributed up to 2.9 per cent of the nation’s GDP in 2018, and pre-COVID-19 was expected to anchor the nation’s goal to grow the non-oil economy by an ambitious 1.5 per cent in 2020 with a diversification strategy.

This long-term plan aims to boost the sector’s individual GDP contribution by six to 10 per cent by 2040, by attracting up to 11 million local and international tourists, and creating up to 50,000 jobs for locals through an investment that amounts to RO19 billion.

Fifty-five percent of the investment will go to building hotels and resorts, while 41 percent will be dedicated to tourism infrastructure, and three percent to tourist experience systems.

It is understood that visitors spent a total of RO679.2 million on their accommodation in 2019, which represented 31 per cent of

the total GDP earnings and an overall year-on-year increase of 15.6 per cent. Albeit, 68 per cent of the total tourist spending was on leisure activities, and 32 per cent was on businessrelated activities.

Aside from their contributions to the GDP and generating employment opportunities for the country’s citizens, the tourism industry, as per a Cavendish Maxwell report, is also expected to help up to 1,200 SMEs and stimulate the overall economy to ready it for future growth.

Of the 3.5 million tourists that visited Oman last year, official statistics revealed by the NCSI reveals that 1.4 million were visitors from other GCC countries. Meanwhile, 436,000 travellers were from India and 107,000 were from China – marking 21.8 per cent and 141 per cent increases, respectively.

It is also worth noting that Wadi Bani Khalid welcomed 220,320 visitors in 2019, which was a 17.8 per cent increase when compared with numbers from 2018.

Even as Oman actively continues to stage its cultural roots through nature tourism to the global market, the nation is inexorably on the cusp of a major tourism overhaul; one that unifies the best of Oman’s culture and heritage with modern niceties and a dollop of entertainment projects that will anchor the country as an all-round tourist destination.

AVIATION

SOARING HIGH The aviation sector has witnessed a lot of changes in the past decade. The emergence of low cost airlines has given the passengers more choices, flexibility and affordability

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n 2019, Oman’s aviation sector contributed over RO1.69bn to the country’s GDP, that is RO217mn in direct contribution and RO152mn in indirect contribution. In addition, RO478mn was generated in supporting industries and RO847mn in tourist spending and visitors exports. Oman’s aviation sector is an important and economic catalyst that enables the development of allied strategic sectors such as tourism and logistics. Oman Airports currently oversees a portfolio of seven airports in the Sultanate, comprising the international airports in Muscat and Salalah, regional airports in Suhar and Duqm, and the three airports of Petroleum Development Oman (PDO) in Marmul, Qarn Alam and Fahud.

The Muscat International Airport, managed and operated by Oman Airports, became the first airport in the Middle East to achieve the Airports Council International (ACI) Airport Health Accreditation, based on a programme designed to assist airports by assessing new health measures and procedures introduced as a result of the COVID-19 pandemic. This certificate recognises Muscat International Airport’s commitment to prioritising health and safety measures in accordance with the industry’s best practices and international health and safety protocols. This accreditation is a recognition of all the COVID-19 measures that Oman Airports have been implementing at Muscat International Airport since the onset of the pandemic.

It also consolidates Oman Airport’s commitment to upholding the best standards of health and safety at all airports of the Sultanate of Oman and when serving its customers. Over the past months, Oman Airports has invested heavily in developing, implementing and improving health and safety measures across all airports of the Sultanate to safeguard the health, safety and wellness of its employees, partners, customers and the general traveling public.

Oman Airports marked another achievement with Duqm Airport earning the (ACI) Airport Carbon Accreditation Certificate – level 1 (Mapping), which was also earned three years ago by Muscat International Airport and Salalah Airport (level 3). Airport Council International (ACI) has ranked Muscat International Airport and Salalah Airport seventh and fourth globally in two different categories. Muscat airport secured the recognition in the ‘15-25 million passengers’ category, while Salalah Airport got the award in the under 2 million passengers category.

Muscat International Airport ranked 7th place worldwide in the 2019 Airport Council International (ACI) Best Airport Awards recognising airports in the ‘15-25 million passengers’ category.

Salalah Airport continued its progress ranking 4th in the airport

category for under 2 million passengers.

In 2015, Oman Airports had set its sight on being the top airports in the world as part of its role in the Sultanate’s overall renaissance. Consequently, the organisation devised a strategy defining a clear vision of reaching the top 20 airports goal by 2020. Within the same year, Oman Airports adopted ACI’s Airport Service Quality (ASQ) programme to be a measure of their services for both Muscat International Airport and Salalah Airport.

The year 2016 served as a starting point for improvement with Muscat International Airport ranking 71st. The transfer to the new terminal building in 2018 served as a launch pad for improvement in services. The year 2019 saw further progress and getting recognition as 7th by ACI. The new Salalah Airport terminal was inaugurated in 2015 with the airport starting its ranking at 9th in the ASQ ranking category for under 2mn passengers per year. The airport saw substantial improvements every year. The year 2019 saw the airport ranking 4th in the same category.

Despite global challenges in the aviation sector, both Muscat International Airport and Salalah Airport’s rankings are incentives for investing in the future. Oman Airports currently manages Muscat International Airport, Salalah Airport, Suhar Airport, Duqm Airport, Qarn Alam Airport, Marmul Airport and Fahud Airport.

Oman Air achieved one of its best ever on-time-performance (OTP) rate of 90 per cent in 2019. The achievement makes it one of the best performing airlines globally in 2019 in terms of flight punctuality. In 2019, Oman Air flew 69,656 flights, 34,225 of which departed from Muscat International Airport. SalamAir, the fastest growing airline in Oman has been rapidly expanding its range of destinations. Salam Air, which launched in 2016, currently operates flights to over 20 destinations, including Dubai, Doha, Jeddah, Karachi, Multan, Sialkot, Shiraz, Kathmandu, Khartoum, Dhaka, Alexandria, Riyadh, Kuwait, and Abu-Dhabi, in addition to Tehran, Istanbul and Trabzon. The airline also operates domestic routes to Muscat, Salalah and Sohar.

The aviation sector has witnessed a lot of changes in the past decade. The low-cost airlines have significantly increased their market shares. The emergence of low cost airlines has given the passengers more choices, flexibility and affordability. The Government’s comprehensive vision, its heavy investment to develop tourism and hospitality infrastructure such as airports and hotels in the country and the Sultanate’s growing stature as an eco-tourism destination are all contributing to the growth of aviation sector in the country.

ADVERTORIAL - WATER MANAGEMENT

OPTIMUM UTILIZATION OF NATURAL RESOURCES WATER- A RESOURCE THAT IS EARTH’S GREATEST TREASURES AND THE BASIC NECESSITY IN LIFE, NEEDS TO BE JUDICIOUSLY MANAGED AND SECURED FOR THE VERY CONTINUITY OF OUR ECOSYSTEM

There is huge increase worldwide for treatment of water through nonconventional water sources and the main three types of processes in use are Reverse Osmosis (RO), Multi Stage Flash (MSF) and Multi Effect Desalination (MED)

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Clean, fresh water is a limited resource.

With all the severe droughts taking place globally coupled with climate change, rapid urbanization and industrialization, the limited supply of fresh water is fast becoming one of our most precious resources. Hence the use of strategies that include reducing wastage, preventing water pollution, and improving our water management are critical and essential for the future well being of the planet.

While almost 70% of the earth is made up of water, many parts of the world suffer from clean water shortage.

Only 2% of the earth’s fresh supply of water is locked in ice caps and glaciers, the vast chunk of about 97.5% of the earth’s water is saltwater and requires treatment prior to beneficial usage applications, which is an expensive and an energy intensive process.

In Oman, WATER IS A NATIONAL WEALTH. Oman’s vision is to develop water resources and preserve it through optimal utilization as a vital element necessary for the sustainable economic development. The main objectives of water management include securing potable water sources, development and conservation of water resources. This is achieved through a balance between water use and available resources, protecting water against depletion and pollution while rationalizing water consumption through a national awareness program.

As Oman lies in an arid region, rainfall is limited and irregular over much of the country. Mean annual rainfall in the coastal plains and desert areas is relatively low, less than 40mm.

In mountain areas, however, where rainfall is greater, up to 350mm, it provides a source of natural recharge to a number of aquifers including those in the interior and coastal areas. On an average per capita consumption is 200 liters of water every day.

Therefore each person is responsible for the consumption of approximately 20,000 gallons of water per annum.

There are two main types of water resources in the Sultanate - natural conventional water resources including surface and ground water that represent about 87% and non-conventional water resources including desalination water and treated wastewater that represent about 13%.

The natural water resources comprise

of two main resources - renewable and non-renewable. The renewable resources replenish from rainfall and is stored in underground water aquifers, which is generally suitable for domestic and agricultural purposes.

However, groundwater becomes brackish and saline towards the coastal areas, and there is similar deterioration of water quality in the interior regions, particularly in the lower reaches of the wadis. The non-renewable resources comprise of underground fossil water located at carbonate formations within the Interior basin. The storage is very large but their renewable yields are low.

There is huge increase worldwide for treatment of water through nonconventional water sources and the main three types of processes in use are Reverse Osmosis (RO), Multi Stage Flash (MSF) and Multi Effect Desalination (MED). To augment the water needs of Oman due to the increase in per capita demand, as well as expansion of industrial activities and the development of tourism, since 1976, several desalination plants were constructed for the production of drinking water for domestic and industrial use from the brackish and sea water intake systems.

Desalination has now become the preferred technological solution of choice to produce fresh water to meet the demands. Although major improvements have been made in water treatment processes, the energy requirements remain quite high.

The total desalination capacity in Oman in 2010 was nearly 600,000 m3/d and in 2018, that figure increased to 1.3 million m3/day. However, one must bear in mind that this comes at a great cost, both economically as well as in terms of its impact on climate change.

Despite the technological advances and successes in reducing energy requirements desalination remains an energy-intensive process.

Energy-efficient methods for water desalination are increasingly being adopted as the growing number of projects may soon have an impact on energy requirements in the country. A typical 500 m3/day seawater RO plant can serve a population of about 2500 people. The power consumption of such a plant would be around 1500kWH. The major consumer of power in an RO plant is the high-pressure pumps which forces water through the membranes.

Globally, pumps account for no less than 10% of the world’s entire energy consumption. If every business switched to high efficiency pumps, this number would be reduced by 4%. This saving would equal to the electricity consumption of 1 billion people. One of the options for reducing electricity consumption in a RO plant is the use of solar power. As we are blessed with sunshine all year round, we can harness this energy for treatment of water.

There is also a significant movement towards recovery and reuse of waste water fueled by growing environmental concerns coupled with stronger legislation and increasing scarce water supplies. Recycle and recovery are being seen as a way to achieve environmental norms while at the same time to supplement fresh water sources that are becoming increasingly stressed.

Recognizing this facet of water being the most essential component of life, both government and private sectors have positioned themselves as an integral contributor to the Water Industry in Oman. With these objectives in mind, solutions are being provided for accessing clean water, and the disposal of waste water in an environmentally sustainable manner. This task drives the water sector towards new technology in water management which ultimately enhances the quality of life.