As we look back on the developments in 2007, one message comes out clearly–though Oman is integrating with the international market and strengthening bilateral relationships, it is not doing so at the expense of surrendering its sovereignty and national pride. Despite persuasion and pressure from neighbouring states, Oman refused to be part of the GCC monetary union. Given the most conservative growth among the GCC member-states, analysts believed that ‘Oman seemed certain to benefit from the much vaunted “catch-up effect” of the monetary union and Oman was not struggling to meet the negotiated requirements in terms of fiscal policy-budget deficits’. HE Ahmed bin Abdulnabi Macki, Minister of National Economy, categorically stated that Oman had reservations over the lack of progress made on obtaining pre-requisites for a successful union by 2010 and expressed aversion to surrendering the nation’s economic sovereignty. Analysts can always argue the pros and cons of Oman’s decision to withdraw but the move shows the tough character of the Sultanate and proves that it will not buckle under pressure from regional or international communities to safeguard its own interests.

In another exemplary case, Oman withstood the onslaught of nature’s fury when Cyclone Gonu hit its shores in June, leaving behind a trail of mass destruction of infrastructure and loss of lives. Despite relief offers from across the border, Oman relied on its own strength to bring life back to normal and as we close the year, the impact of Gonu on the gross national income seems to have been minimal.

But, as we look back, we find that the year certainly had its share of pitfalls for Oman. Despite signing the free trade agreement (FTA) with the US in record time, Oman has not been able to implement it so far. The cost of living has gone up substantially as a result of ‘imported inflation’ due to higher oil prices and US dollar erosion. To make matters worse, rents are hitting the roof. The authorities’ repeated warnings to retailers to keep consumer prices under control and introduction of rent cap has had a limited impact.

No wonder, Omanis are attracted to higher pay packets in other countries. Many expatriates, specially from India, the traditional feeder market for GCC countries, are moving back to their native place. If we speak to any senior manager in Oman, he states that his/her biggest challenge is to attract the right talent from India as savings’ propensity for an expat in Oman has eroded considerably. This talent crunch is pinching the corporate sector hard, as the economy is in a high gear.

Though it has been heartening to see women gaining more prominence in driving the country forward, but it was painful to find that the Majlis Al Shura elections failed to elect even a single woman member. Perhaps, talented women with a mass appeal need to come forward in enough numbers to bring women power to the fore.

On the positive note, as you read ahead, you will see that Oman has made substantial progress in key sectors in 2007. More projects have been announced and existing tourism projects have made a major headway. The telecom industry has continued its excellent performance by extending its penetration. The industries have been the real star of the year, as Omani exports reached record levels. The financial market is on a roll, with the MSM at an all-time high and banking attracting foreign players with its strong performance. As per data available up to September 2007, net oil revenues have gone down significantly which is a cause of worry. We now take sector-wise look at how Oman has fared during the year.

 

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