The esteemed members of the Shura Council affirmed on Wednesday during their hosting of His Excellency Dr. Said bin Mohammed Al Saqri, the Minister of Economy, who presented a ministry statement that the contribution rates of economic sectors to the Gross Domestic Product (GDP) are modest and grow at weak rates compared to the set targets. They pointed out the necessity of examining the mechanisms, procedures, and executive plans drawn by the ministry to overcome the challenges hindering the growth of various economic sectors. This is especially important given the strategic location of the Sultanate of Oman and the natural resources it possesses, which constitute attractive local, regional, and international potentials to enhance the five economic sectors (manufacturing, transportation and logistics, tourism, agricultural wealth, and mining).
This came during the fifth regular sitting of the Council for the first annual session of the tenth term (2023-2027), chaired by His Excellency Khaled bin Hilal Al Maawali, the Council's president. The esteemed members of the Council and His Excellency Ahmed bin Mohammed Al Naddabi, the Council's Secretary-General, attended the sitting.

The sitting began with a statement from His Excellency the Chairman of the Council, who welcomed the Minister. Following that, the Minister of Economy presented a statement comprising three main axes. Firstly, the performance of the Omani economy and the key initiatives and projects of the Ministry of Economy were highlighted. The overall economic performance was evaluated until the midpoint of the tenth Five-Year Development Plan (2021-2025). The third axis addressed the role of the Ministry of Economy in confronting regional and international economic variables.

His Excellency, the Minister, stated in his statement that the preparation period for the tenth Five-Year Development Plan, representing the first executive plan for Oman Vision 2040, witnessed numerous challenges and local and international variables. This primarily included the spread of the COVID-19 pandemic in 2020, which had negative repercussions on various development programs and the national economy. The Gross Domestic Product (GDP) decreased by 3.4% in 2020, equivalent to OMR 1.176 million.

In response to these challenges, the government implemented various policies and measures to facilitate the economic recovery from the pandemic's effects. These measures included economic stimulus packages such as tax exemptions, low-interest financing, direct financial support for affected institutions, and other initiatives. Additionally, the government provided easy loans for projects to help overcome the economic impact of the pandemic. Direct support was also extended to vital sectors such as health, education, and essential services.

Furthermore, the Minister emphasized that economic and financial indicators demonstrated Oman's economy transitioning from recovery to a growth phase. The economy achieved significant growth rates due to these policies, procedures, and improved oil prices. The Omani economy experienced rapid positive developments during the tenth Five-Year Development Plan (2021-2023), achieving real growth rates of approximately 2.6% and 9.6% in the first two years.

The Minister added that proactive government measures contributed to protecting the Omani economy from inflation, maintaining it within safe limits despite the substantial global inflation rates, which averaged around 6% in 2023. Oman's inflation rate did not exceed 1% during the same period. This was a result of policies implemented to control price increases, including stabilizing fuel prices and expanding the list of VAT-exempted goods.

The statement also addressed the labor market and employment as crucial issues in the tenth Five-Year Development Plan. Efforts were focused on employing and accommodating Omani citizens in the private sector, either through training and education to enhance their required skills or through flexible employment conditions.

Moreover, the Ministry's statement covered various detailed statistics and economic indicators, including expectations that developmental expenses for civilian ministries in 2023 would exceed OMR 1.1 billion. Total investments in Oman were projected to exceed OMR 4.5 billion in 2023, distributed among various sectors. The statement also highlighted certain practical challenges facing economic diversification, such as weak intersectoral relationships, insufficient focus on integrated clusters, and limited reliance on value chains in planning strategic programs.

Discussions of the Honorable Members of the Council

Following the presentations, the Honorable Members of the Council raised several observations and inquiries regarding the Ministry's statement, which included indicators and data. Their focus was on the hedging policies implemented by the Ministry to mitigate economic crises, especially in the face of fluctuations in oil prices. They emphasized the dominance of oil and gas revenues as the primary sources for the state budget.


The Honorable Members affirmed that the targeted percentages set in the Tenth Five-Year Plan for the growth and contribution of the five economic sectors (manufacturing, transportation and logistics, tourism, agricultural wealth, and mining) are modest. These percentages do not align with the expected contributions of these sectors to the national economy. They questioned the reasons for the slow growth and meager contributions of these sectors to the Gross Domestic Product (GDP) and sought clarity on the Ministry's plans to overcome challenges hindering their economic growth.

In the same context, the Honorable Members proposed a focused and integrated approach, suggesting concentration on one or two economic sectors during the Eleventh Five-Year Plan. They advocated allocating all necessary resources to make these sectors effective contributors to the GDP and achieve the desired economic, social, and service objectives. However, they clarified that this focus should not neglect other sectors; instead, it aims at concentrated efforts until the selected sectors reach their potential.
Additionally, in response to the Minister of Economy's statement about the Omani labor market in 2022, which witnessed a significant increase in employment, the Honorable Members raised concerns about the annual decline in employment rates from 2021 to 2023. They inquired about the Ministry's strategies, executive plans, and measures to address the challenges hindering the growth of various economic sectors and stressed the need for a strategic plan to manage human resources in Oman.

Furthermore, the discussion touched upon the importance of distributing development credits sector-wise. Despite acknowledging the significant allocation to infrastructure in previous five-year plans, the Honorable Members emphasized the need to shift focus towards service sectors. They argued that while infrastructure spending is essential for development and investment climate improvement, the current developmental planning requires emphasis on service sectors for broader financial gains.

The Members praised the Ministry's integrated economic clusters as part of the National Economic Diversification Program. They requested detailed information on the costs and timelines for the implementation of these projects. Moreover, they questioned the ability of relevant authorities to attract foreign funding and direct or indirect foreign investments to boost investment activity and contribute to the GDP during negative savings gaps.
In terms of legislative enhancements, the Honorable Members suggested a review of laws related to foreign capital investment, economic development, and other economic legislations. They urged the continuous monitoring of the implementation of plans and strategies outlined in the Tenth Five-Year Plan.
In conclusion, this ministerial statement discussion marks the first within the tenth period. The discussion of ministerial statements is a tool available to council members, as per Article 69 of the Oman Council Law, allowing them to propose and deliberate on the government's agenda for each annual session.