Question

Write background information about Oman in terms of and not limited to income, population , political environment , social environment, purchaing power, and GDP, and rules and regulation to attract investors from local and out side. (in 3 pages)

Answer 1

Oman is an Arab country. It is officially called as Sultanate of Oman. It is a prosperous & developed country. Oman is one of the least populous Arab countries. The current population of Oman is 4,779,750 (based on United Nations estimates). Arabic is the principal language spoken by Omanis, English is widely spoken as a second language. Oman has developed rapidly from a low income to a high income country. The government focuses on promoting the living standards of citizens and reducing income disparities. The Basic Law prohibits discrimination on the basis of gender, origin, color, language, religion, sect, domicile, or social status. The country performs slightly better on the gender empowerment measure, which assesses women's political participation, decision-making and power over economic resources. Omanis are provided with extensive social services, including insurance against old age, disability and death, maternity and health care.

As far as the political scenario is concerned, Oman is a sultanate (a type of monarchy) with a sultan as the head of state and head of government. His position is hereditary within the Al Bu Sa'id family. There are few checks on the power of the sultan and his decrees form the basis of law. He appoints a council of ministers and can dismiss ministers without reason. There is no prime minister. Senior members of the sultan's family routinely receive important government positions. More distant members of the family serve as ministers, other government officials, and the equivalent of governors throughout the country. Other ministers and senior government officials are chosen by merit and family or tribal connections; Muscat merchant families are overrepresented. There are no political parties and a limited electorate chooses candidates for the Majlis al-Shura, an indirectly elected consultative council dealing with social issues. As part of its efforts to decentralize authority and allow greater citizen participation in local governance, Oman conducted its first municipal council elections in 2012. Oman joined the World Trade Organization in 2000.

Women have significant authority within the family unit and make strong contributions toward family decisions regarding various rites of passage. Outside the kin group, however, women have little authority or privilege. From the early 1990s, the government has made great efforts to include women in government. Women were nominated to run for election to the consultative council in 1997, with two obtaining seats, and several speeches of the sultan emphasized the importance of integrating women into public life. In 2003 women in Oman were allowed to vote for the first time.

The Gross Domestic Product (GDP) in Oman was worth 66.29 billion US dollars in 2016. The GDP value of Oman represents 0.11 percent of the world economy. Oman is one of the world´s biggest oil producing countries and oil and natural gas extraction account for 51 percent of GDP. The services sector represents 37 percent of the wealth. Within services the largest segments are: wholesale and retail trade (8 percent of GDP); public administration and defense (7 percent) and transport, storage and communication (6.8 percent). Manufacturing and mining contribute for 6 percent of GDP, construction and electricity and water distribution for 5 percent and agriculture for the remaining 1 percent. Oman started exporting oil in 1967. Due to rich oil wealth Oman transformed from a poor country to rich one. But at present the revenue from oil is declining. As Oman’s oil reserves dwindle, the government is using enhanced oil recovery techniques to boost production, but it also is focusing on fiscal reform and economic diversification to reduce the country’s heavy reliance on hydrocarbons. After oil, petroleum, and liquified gas, fish and shellfish account for the majority of Oman's export trade. Tourism and gas-based industries are key components of the government’s diversification strategy.

The government plans to reduce red tape to attract investors. A new government public-private initiative called "Tanfeedh" is tasked with developing recommendations on cutting red-tape, encouraging investment and aligning labour requirements in the areas of logistics, tourism and manufacturing. It is likely to be influential in shaping new laws, including the long-awaited revision of Oman's Labour Law. In 2016, Oman made starting a business easier by reducing the minimum capital requirement and streamlining the registration of employees. Labor flexibility is held back by “Omanization,” which requires private-sector firms to meet quotas for hiring native Omani workers. Firing native Omanis is both lengthy and difficult.

Oman actively seeks foreign investment and is in the process of improving the regulatory framework to encourage such investments. In-Country value” (ICV) is the government of Oman's policy effort to incentivize companies, both Omani and foreign, to invest in Oman through their procurement of local goods and services and training of Omanis. The government of Oman includes bidders’ demonstration of support for ICV as one factor in government tender awards. While ICV was first conceived primarily for oil and gas contracts, the principle is now embedded in government tenders in all sectors, including transportation and tourism. This policy aims to increase economic diversification and local capacity building in the long run. The new foreign capital investment law, which is in its third and final drafting stage, will allow 100 per cent foreign ownership and remove the minimum capital requirement to provide foreign investors with an open market in Oman. This is expected to increase investor confidence by ensuring consistency and avoiding conflict with international trade arrangements and agreements. Government openness to foreign investment is above average. The banking sector continues to evolve, and commercial banks are performing well.

Incentives for foreign investors include:

• Interest-free loans to companies engaged in agriculture, fisheries, industry, mining and quarrying and tourism.

• Low interest loans to industrial firms from the Oman Development Bank.

• Exemption from customs duties on imports of equipment and raw materials required for production purposes.

• Exemption from corporate tax for five years for manufacturing companies.

• Planned and serviced industrial plots for setting up factories.

• Recommendation for the reduction of utility charges for qualifying industries.

• Survey of industrial investment opportunities and preparation of feasibility studies important to the national economy.

The government is undertaking many development projects to modernize the economy, improve the standard of living, and become a more active player in the global marketplace.