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How Sultanate’s Ports Supporting Government’s Economic Diversification Goals

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Sultanate's Ports

In the year following the global pandemic that hampered the growth of several industries across the globe, Oman’s ports achieved significant growth, commercial operations, and high volumes of direct imports. This kickstarted 2021 for Oman and their port infrastructure reinforced the fact that they will play a crucial and significant role in the Sultanate’s plans of economic diversification. These plans by the Oman government have been well thought out as they leverage Oman’s strategic geographical location and giving several shipping companies in Oman an opportunity to scale their operations. Sensing a lot of opportunities in the logistics and ports infrastructure, the Omani government charted out different plans to bolster the economic diversification that also freed them from over-dependence on oil. Over the years, Oman has invested heavily in developing a world-class port system and thus far has been successful in establishing itself as a global logistics hub. 

Unlike its other GCC neighbours, Oman is less hydrocarbon-rich, which is why the government’s economic diversification plans are now looking at various other industries like tourism, mining, manufacturing, fisheries, and logistics being its mainstay. These have been identified as the key areas where the government will mainly be focusing on developing Vision 2040 as the driving force of their economy. 


To bring about this economic diversification, the Oman government has focused on three key areas: 


  • Inviting foreign investment and expertise into sectors other than oil. This is being done by strategic collaborations, creating newer reforms, and infrastructural investments. Sectors like logistics, tourism, manufacturing, and energy are high on the priority
  • Leveraging Oman’s unique geographical location and developing its ports into regional logistics hubs. The government also aims at spilling over the port’s advantage to further enhance the economic growth of other domestic sectors 
  • Enhancing local labor forces and procurement requirements on foreign firms. This aims at bringing more to the local market


Till now, of all other industries, ports have been the biggest contributors in catapulting Oman’s economy and the kind of investment that has gone into developing the ports, it is sure that they will continue to be the forerunners in the years to come. Omani ports ranked first globally in Port Calls and Port of Salalah was ranked sixth worldwide in operational efficiency. These are big achievements for a country that only recently started diversifying its economy into other verticals. While there are definite reasons for such brilliant performance, one of the major contributors for this exuberant growth is that a number of cargo service providers in Oman have pushed to make things better for the ports. These groups, working closely with the government organizations, introduced several initiatives and offered attractive incentives so that Omani ports could continue with their strong operational and logistics performance. 

This has resulted in the sustainable economic growth of the ports through increased direct shipping lines and creating global connectivity with all major ports around the world. The overall idea has been to export homemade products to global markets, build, develop and sustain international business ties with global giants and reinforce Oman as a global logistics hub. And the efforts are yielding all the right results. If numbers are to be believed, Oman’s ports handled nearly 2.5 million containers in the first half of 2021 and another 28.8 million tons of general cargo. This is an almost 18 percent rise in performance as compared to the first six months of 2020. The liquid commodity handling also grew by 12 percent compared to last year. All these figures are indicators that ports are slowly and steadily driving the economic diversification in the Sultanate. 


While no such humungous plans are devoid of challenges, several similar obstructions will hamper the growth of economic diversification for Oman. But the government has shown strong resolve to overcome these challenges and sail through them with strategic planning and development policies. Sectors like natural gas, tourism, construction, and industrial exports are the industries that will drive the blues away, feel the experts. 


Apart from every effort that the Oman government is making, there have been dedicated efforts in developing the ports and their consequent infrastructure. Their major economic plan for 2040 aims at making the ports the main flagbearers of diversifying the economic growth. Strategic objectives have been planned in the transportation and logistics sector by easing out congestion, enhancing logistics business capacity, upgrading technology, and developing ports, airports, railroads, and roadways networks. The Sultanate is also investing heavily in making their different ports more advanced by using the high-end technological intervention. 


It is clear from all the steps that the Oman government is taking that ports will become the driving force for its economic diversification. In recent years, there have been several initiatives taken by the government that is making things more streamlined. Doing business is becoming easier as the government has initiated a government-private sector partnership to enhance the business environment. Several government agencies have been brought under one roof at various ports so that all kinds of permissions, access, etc can be provided with ease. The custom regulations have been regularized to reduce the wait time and automation is driving efficiency. Through these well-planned steps, the Oman government is all set to achieve its goals of becoming a powerful logistics hub that will create an economic turnaround and reduce its dependency on oil.


So, what does this mean for the economy of Oman? The rise of port infrastructure and other related sectors will create more jobs, bring more international investments, manpower, and strategic collaborations. This is sure to bring the government’s goal of economic diversification closer to realization. As the ports in the country are becoming global logistics hubs, more and more international giants are looking at Oman for business ties driving the local economy upwards. And even though other sectors are being developed to fulfill the dream of economic diversification, the ports are currently the driving force and will continue to remain so in the decades to come. 

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