As Oman is attempting to diversify its economy beyond exploiting oil resources, which has been its main engine for growth for many decades, it has to empower the private sector to create more jobs for its growing young population, an expert has said.

Julio C. Saavedra, senior policy adviser at the Office of the Adviser for Studies and Research at Oman’s Diwan of Royal Court, said the Omani government had been the largest investor in infrastructure and in the provision of services in the country.

The private sector built the infrastructure, he said, but the government had always been the contractor. Such an over-reliance on the government as the sole engine would create some limitations to the economy, he argued.

“You can create only so much infrastructure, but at some point you need to begin to extract value out of it. At that point, the private sector has to take over,” he said at a conference held by the Omani government in Muscat, Oman, in January.

However, the overreliance on the government was so great in Oman, he said, it left a private sector that was rather weak and unable to create added value.

“If you remove from the picture all the companies that have a heavy dependence on the government, there is not much left but traders and small companies, with some notable exceptions like Omani multinational companies and some others,” he said.

“Traders, by definition, do not create much added value.”

Members of the private sector in Oman voiced their opinions in a survey conducted in 2013. Saavedra mentioned the surveys results, which revealed that the private sector felt the government “does not know what we are going through”.

He said private sector players wanted a relationship with the government that was more transparent, more open and based on trust, pointing out that the former still considered the latter’s attitude as “us versus them”.

To break through the barrier, he said Oman had created a public-private partnership (PPP) task force called the Sharaka Task Force, as the Arabic word sharaka means “partnership”. The team, which consists of top level representatives of ministerial officials and the private sector, aims to be a venue for both parties to understand each other in order to create better policies.

One example of a policy devised by the task force is the draft of a bill for a law that would enable the creation of an authority responsible for managing PPP projects, Saavedra said.

He said empowering the private sector was important as Oman would have between 30,000 and 50,000 young people entering the labor market every year and they would mostly be employed in the private sector.

“You have to give these young people a sense of purpose; you have to give them meaningful employment,” he said. “And that means that youth have to become the focal point of economic and social policy making in Oman for the next 10, 20, 40 years.”

The next course for Oman in transforming its economy, he said, would be to prepare young people to have attitudes of openness toward new ideas and technological innovations, so that they could become future assets rather than part of the problem.

The emphasis on innovation as a way to develop a more vibrant economy in Oman was also raised by Ricardo Hausmann, director of Harvard’s Center for International Development. At the conference that he stressed the importance of building a society full of people with different kinds of know-how to build more industries, rather than just relying on certain knowledge.

“Implementing a technology involves putting together a team of people with all the complementary skills necessary to produce that,” he said.

“Societies don’t grow by making more of the same. This is, for example, China’s market share of the world in garments, electronics and machinery. China started in garments then moved into electronics, then to machinery. They don’t grow by making more of the same.”

The Omani government has laid out its transformation plan in the Oman Vision 2040, a road map that seeks to improve various socio-economic areas in the country by implementing a broad set of regulatory and bureaucratic reforms.

The road map document, which can be accessed on the government’s official website, sets out 13 areas as national priorities, including economic diversification and fiscal sustainability, as well as the labor market and employment.

“There’s a need to change from an economy depending on oil and gas into a more diversified economy,” said Abdullah bin Salem Al-Salmi, head of the Oman 2040 economy and development committee at a press briefing on the sidelines of the two-day conference.

In the conference, the Omani public and private stakeholders, as well as foreign experts, exchanged ideas to complement the road map formula, which is to be drafted into a five-year plan for 2021 to 2025.

The forthcoming five-year plan would be a stepping stone for reaching the goals laid out in the 2040 vision, said Talal bin Sulaiman Al-Rahbi, chairman of the Oman 2040 future vision technical committee.

“We focus a lot on the rules and regulations that need to be adjusted, updated or changed to allow the [economic] sectors to flourish in the country,” said Al-Rahbi, who is also a deputy secretary-general of the Omani Supreme Council for Planning.

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The Jakarta Post was among the media outlets invited by the Omani government to send journalists to the Oman Vision 2040 national conference in Muscat, Oman, in late January.

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