Oman Hosts Seminar to Propel GCC Economic Diversification
In a significant move to reshape the economic landscape of the Gulf Cooperation Council (GCC) countries, Oman recently hosted a two-day seminar titled “The Role of the Private Sector in Economic Diversification in GCC States.” Organized by Oman’s Ministry of Economy, the event underscored the critical need to reduce reliance on oil revenues and foster a robust, competitive private sector capable of thriving on the global stage.
A Collaborative Effort for Economic Integration
The seminar commenced under the patronage of Dhafir Awad Al Shanfari, Chairman of the Economic and Financial Committee at the State Council. It brought together policymakers, industry leaders, and economic experts from across the GCC to deliberate on strategies for economic and development integration within the region. The discussions aimed to identify mechanisms to establish a dynamic private sector that can lead economic diversification efforts and compete internationally.
Key Discussions and Objectives
Central to the seminar’s agenda was exploring how the private sector can drive initiatives, projects, and programs aligned with GCC economic integration goals. Participants examined various approaches to empower private enterprises, enhance competitiveness, and create an environment conducive to innovation and investment. The insights and recommendations generated from these discussions are set to be compiled into a comprehensive report for submission to the Permanent Preparatory Committee at the Ministerial Level of the Economic and Development Affairs Authority.
Oman’s Commitment to Diversification
Oman’s proactive stance in hosting this seminar reflects its broader commitment to economic diversification. The nation has been implementing strategic initiatives to reduce its dependence on oil and gas sectors. Notably, in the first quarter of 2024, Oman’s manufacturing sector experienced a remarkable real growth rate of 9.2%, a significant rebound from a 2.2% decline during the same period in 2023. This surge elevated the manufacturing sector’s contribution to the gross domestic product (GDP) to 10% at constant prices and 10.5% at current prices. The 10th Five-Year Plan (2021-2025) aims to further increase this contribution to 12.2% by its conclusion.
Dr. Salem bin Abdullah al Sheikh, spokesperson for the Ministry of Economy, attributed this growth to successful economic diversification efforts. He highlighted that these initiatives have bolstered industrial performance, expanded exports, and attracted investments in industrial, free, and private zones. Strategic projects, such as the Duqm Refinery, have been pivotal in driving this progress. The refined petroleum products industry, in particular, witnessed an impressive growth rate of 67.6% during the first quarter of 2024.
Regional Efforts and Initiatives
The seminar also provided a platform to discuss regional efforts aimed at economic diversification. Saudi Arabia’s Vision 2030 and the accompanying National Transformation Program (NTP) were highlighted as ambitious blueprints designed to reduce the kingdom’s dependence on oil. The NTP outlines strategic objectives, including public sector reforms, economic diversification, and social reforms, with a goal to increase non-oil government revenue and expand the private sector’s contribution to GDP.
In line with these objectives, Saudi Arabia’s non-oil private sector demonstrated robust growth in early 2025. January saw the sector’s most substantial expansion in over a decade, driven by a surge in new orders and vigorous business activities. The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) climbed to 60.5 from 58.4 in December, marking the highest level since September 2014. This growth was fueled by favorable economic conditions, new infrastructure projects, and government initiatives aligned with Vision 2030.
Challenges and the Path Forward
While these developments are promising, the GCC countries recognize the challenges inherent in transitioning from oil-dependent economies to diversified ones. The seminar emphasized the importance of creating a conducive environment for private sector growth, which includes regulatory reforms, access to financing, and investment in human capital. Collaboration among GCC member states is deemed essential to share best practices, harmonize policies, and foster a competitive regional market.
The role of the private sector is increasingly seen as pivotal in this transformation. By driving innovation, creating employment opportunities, and attracting foreign investment, private enterprises can serve as the engine for sustainable economic growth. The seminar’s discussions underscored the need for public-private partnerships and the development of small and medium-sized enterprises (SMEs) as critical components of the diversification strategy.
Conclusion
Oman’s initiative in convening this seminar highlights a collective resolve among GCC countries to redefine their economic futures. By empowering the private sector and fostering regional collaboration, the GCC aims to build resilient economies less susceptible to oil market fluctuations. The insights and strategies emerging from this seminar are poised to guide the region toward a more diversified and sustainable economic landscape.
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