quotes The future potential between Oman and Saudi Arabia

18 July 2021
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Updated 18 July 2021

The future potential between Oman and Saudi Arabia

The Kingdom of Saudi Arabia and the Sultanate of Oman are considered to be the largest countries in the Arabian Gulf in terms of land area.
As such, their age-old civilized history forms a similar context that contributed to the identity of the Arabian Gulf area, which was led by the necessity of political, economic, and social geography to establish the Gulf Cooperation Council (GCC) system.
This has resulted in current Omani-Saudi efforts to seek everything that brings advancement to citizens and institutions in both countries, under political leaderships that pursue integration and cooperation at a time when it is an inevitable, urgent, and historical necessity.
Back to political history, and we find that the destinations of both Sultan Qaboos and Sultan Haitham for their first official visit was Saudi Arabia. The visit by Haitham, through a generous invitation from King Salman, was met with warm hospitality at an official and public level.
It might be worth passing by some general challenges and obstacles facing the GCC, but the most notable ones include the US presidency of Donald Trump, the Qatari crisis, the Yemen conflict, the Syrian crisis, US-China trade wars, the Iranian nuclear agreement, and oil.
The economic indicators of both countries indicate a willingness for transformation, sought through Oman Vision 2040 and Saudi Arabia Vision 2030. Both programs have the same perspectives, especially the economic aspect despite the massive difference in the size of the two economies.
It is worth noting that the sultanate seized a 7.32 percent share of the total non-oil trade volume between Saudi Arabia and the Gulf countries in the first quarter of 2021. Almost 1,079 Saudi companies have invested in the sultanate across the trading, construction and service sectors.

The economic indicators of both countries indicate a willingness for transformation, sought through Oman Vision 2040 and Saudi Arabia Vision 2030. Both programs have the same perspectives, especially the economic aspect despite the massive difference in the size of the two economies.

Dr. Yousuf Mohammed Al-Bulushi

An Omani Economic Ministry briefing this month reported that the annual growth rate for Saudi imports was 6.94 percent during the last five years. This increased to 16.6 percent during 2020, while the annual growth rate of Omani exports to Saudi Arabia was 7.4 percent. The volume of registered Saudi investments in the sultanate is OMR188 million ($488.94 million).
Integration with the sizable Saudi economy, which compensates for the limitation of the Omani economy, is one of the solutions or exits that should take this hoped-for economic relationship to a productive level. Whereas the gross domestic product (GDP) of the sultanate’s economy is OMR24.8 billion, Saudi Arabia as a member of the G20 has a GDP of SR2.531 trillion ($674.93 billion). By looking at the big difference between these numbers, it is clear how many opportunities can be made use of.
Financially, everyone knows what the current challenges facing the sultanate are and one of the biggest is public debt.
Access to the G20 market is a massive chance to supplement the GDP with non-oil income and that is through economic expansion, not just diversification. This will give Oman the possibility of greater empowerment of the private sector, employing the surplus of knowledge between the two markets and activating it. This will significantly address the Omani economy, especially since it will help to balance economic growth and financial stability.
We have to put into our consideration that these strategic partnerships usually aspire to common goals, sometimes integrated, and sometimes competitive. As much as every country seeks to bring in foreign investment, maybe we should build our expectations with more reality and optimism, seeing that the global impasse is the same. This will lead us to define the integrated role between the two countries to be translated to a tangible reality with the aspect of winning for everybody.
Saudi Arabia is a big chance for the expansion of Omani trade. There are also opportunities for joint support of small and medium-sized enterprises (SMEs) in both countries, with two tracks available. The first is governmental, through the transfer of the Saudi experience in the SME sector, while the second is through businessmen making cross-border connections.

• Dr. Yousuf Mohammed Al-Bulushi is an Omani economic analyst. Twitter: @yosufmohd