[Oman-L] Oman's non-oil exports to top RO 1 billion

[Joachim Duester]

Oman's non-oil exports to top RO1b   
Source: Khaleej Times, 27 September 2007

Oman, which gives the highest priority to diversifying
its economy, will celebrate a success in this respect
with the country's non-oil exports set to top the RO 1
billion mark for the first time in 2007.

Non-oil shipments have been steadily rising over the
past several years, thanks to a vigorous and joint
government-private sector effort and incentives to
exporters. Their value increased to RO 555 million in
2005 from RO 262 million in 2002.

And last year, the growth was a hefty 46 per cent — to
RO812 million.

"Oman is set to cross the RO 1 billion mark in non-oil
exports in 2007 riding on the growing popularity of
'Made in Oman' products," the Oman Centre for
Investment Promotion and Export Development (OCIPED)
said in its newly-released quarterly bulletin 'Al
Mihwar'.

"In fact, the strong growth recorded by exports of
non-oil products of Omani origin has been one of the
most impressive aspects of the country's macroeconomic
performance in 2006," it added.

Last year's growth was driven to a large extent by a
327.9 per cent increase in exports of mineral
products, mainly cable pipes, iron and steel products,
followed by the chemicals and allied industries
sector, which registered a surge of 55.5 per cent over
and above the 218.6 per cent increase seen in 2005.

The strong performance of this sector was primarily
due to the export of fertilisers by the Oman India
Fertiliser Company (OMIFCO), which began operations in
2005.

The upsurge in these two areas overshadowed negative
growth in other product categories such as live
animals and animal products, vegetable products and
foodstuffs, reflecting the growing demand for these
commodities within the economy.

Export of textiles and garments continued to exhibit
the negative trend that started in 2004, owing
primarily to the impact of termination of the multi
fibre agreement (MFA) related quotas under the WTO.

"The growth of 46.3 per cent achieved in 2006," the
Central Bank of Oman (CBO) recently noted in its
annual report for last year, "cannot be seen as a
blip, since in the last three years, annual non-oil
export growth had consistently been above 30 per cent
in every year, and going by the prospects of a large
number of export-oriented industrial projects starting
actual operations in the near future, the momentum on
the non-oil export front could be expected to be
sustained over time."

Also in 2006, for the first time, non-oil exports of
Omani origin overtook re-exports, valued at RO 767
million.

The UAE and India together accounted for 55 per cent
of Oman' s non-oil exports in 2006. Such shipments to
the UAE registered a growth of about 65 per cent. As a
result, the share of UAE in total non-oil exports
increased from 34.9 percent in 2005 to 39.5 percent in
2006.

India emerged as the second most important market for
Oman in 2005 with a share of 12.7 per cent, which
further increased to 15.3 per cent in 2006 on account
of higher export of fertilisers by OMIFCO.

Despite the growth in trade between the US and Oman,
the share of the US in Oman's total non-oil exports
has been going down. From 7.6 per cent in 2004, it
declined to 3.4 per cent in 2005, further to just 1.9
per cent in 2006.

But with the US-Oman FTA expected to come into force
shortly, the trend is expected to change, as more
Omani exporters will target the US market," OCIPED
said, adding: "Similarly, exports to other advanced
countries, whose currencies had exhibited significant
cumulative appreciation against the US dollar since
2002, such as the Euro-area and the UK, did not show
much increase.

"These were also not the leading destinations for
Oman' s non-oil exports. In fact, the potential
competitive advantages that should have arisen
following the sustained depreciation of the US dollar
were not there."

OCIPED said on the basis of past performance and
reports that cyclone Gonu, which struck the country in
June, was not expected to make a significant dent on
the economy, non-oil exports would exceed RO1 billion
this year.

The centre is targeting the figure to touch RO 2.75
billion by 2010. "That means an almost five-fold
growth in the period 2005-2010, with a compounded
annual growth rate (CAGR) of 38 per cent," it said,
adding that it had drawn up a "strategic framework" to
achieve the goal.