MUSCAT: Dr Hilal bin Hamoud al Sawai, a leading expert on sustainability and social responsibility, highlights the pivotal role of In-Country Value (ICV) in Oman’s economic future. In an interview with the Observer, Dr Al Sawai described ICV as a strategic economic principle that strengthens local economies by maximizing the use of domestic resources.

“ICV is about leveraging local raw materials, employing national talent, and developing competitive industries that can meet both domestic and international demands,” he explained.

Introduced in Oman in 2013, ICV initiatives initially focused on the oil and gas sector, achieving notable successes in job creation and local resource utilization. By 2024, these policies expanded to government tenders, forming a key part of the national agenda.

Yet, challenges persist. Dr Al Sawai pointed to issues such as capital leakage, private sector constraints, and bureaucratic inefficiencies as barriers to fully realizing ICV’s potential. He argued that overcoming these obstacles is critical for Oman to build a self-sufficient and resilient economy.

ICV CHALLENGES

One of the primary challenges facing ICV in Oman is capital leakage, where funds flow out of the local economy, reducing domestic demand, investment, and government revenue. This outflow weakens Oman’s economic resilience and hampers the strength of the local currency.

Additionally, Oman’s private sector faces structural constraints. Family-owned businesses dominate the economy, often resisting transformation into public joint-stock companies. This limits their ability to attract investment and grow. Meanwhile, intense competition from foreign companies puts further pressure on local enterprises.

Lastly, bureaucratic inefficiencies slow the pace of progress. Lengthy procedures for obtaining permits and financing approvals hinder business growth, particularly for small and medium enterprises (SMEs), which are vital to Oman’s economic fabric.

SOLUTIONS TO STRENGTHEN ICV

Dr Al Sawai outlined several strategies to bolster ICV in Oman:

Develop Local Industries: Investing in research, technology, and workforce training can enhance the competitiveness of local industries.

Reduce Import Dependency: Campaigns promoting locally made products and incentives for domestic industries could significantly reduce reliance on foreign goods.

Support SMEs: Simplifying regulations and creating a more business-friendly environment would empower SMEs, which form the backbone of a thriving economy.

Dr Al Sawai stressed the importance of reducing Oman’s reliance on oil and gas revenues by diversifying into sectors like manufacturing, tourism, and technology. These investments are essential to achieving Vision 2040’s goals of economic resilience and sustainable growth.

“Diversification is not just about reducing oil dependency; it’s about building an economy that can adapt and thrive in a rapidly changing global landscape,” he said.

NATIONAL FRAMEWORK FOR LOCAL CONTENT

Experts agree that Oman needs a national framework to prioritize local content development and optimize public investments. Such a framework would focus on several key objectives:

• Boosting Non-Oil GDP: Diversifying the economy would reduce reliance on volatile oil markets, ensuring greater stability.

• Enhancing Self-Sufficiency: Strengthening local production capabilities would create jobs and address unemployment.

• Attracting Foreign Investments: A strong industrial base would position Oman as a competitive destination for international investors.

• Optimizing Public Spending: Redirecting funds to sectors that support local content would increase economic flexibility and sustainability.

• Reducing Import Dependency: Developing domestic industries would help bridge the gap between local production and foreign supply.

As Oman invests heavily in its future, it stands at a crossroads. The $60 billion spent in 2022 reflects an ambitious vision for economic growth, but achieving sustainable development requires more than just spending—it demands a strategic approach to local content.

By prioritizing ICV and adopting a robust national framework, Oman can harness its local resources, build a resilient economy, and secure a sustainable future in line with Vision 2040. As Dr Al Sawai aptly noted, “The path to self-reliance begins at home, with the empowerment of local industries and the people who drive them.”

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