Tag: Industrial Electrical Trading in UAE

A partial recovery in oil prices coupled with an ongoing all-out diversification drive and the landmark tax reform, will help the UAE economy to gain increased momentum in 2018 to register 3.3 per cent growth.

After an expected slowdown to 1.7 per cent in 2017, such a vibrant pace of growth predicted for 2018 signifies a virtual turnaround for the economy with a two-fold growth, driven by a rebound in gross domestic product by Dubai and Abu Dhabi, analysts and economists said.

While the ongoing fast-track diversification aimed at further reducing reliance on crude oil revenues will better place the UAE to entrench itself from further volatility in oil fortunes, a five per cent value added tax will help boost state revenues by Dh12 billion per annum, adding about 1.5 to two per cent to GDP.

VAT, which represents a major shift in tax policy, will impact all segments of the economy, leading to a fundamental change in the way businesses operate across around the region.

James Mathew, group CEO at Crowe Horwath (UAE and Oman), said VAT would bring in transparency, which will help the financial sector to differentiate between genuine businesses and suitcase operators. “Obtaining credit facility from banks will become easier for small and medium enterprises in the UAE after the implementation of VAT as companies will have to maintain their books from next year. The genuine SMEs will be able to get more finance because their turnover will not be questioned by the lenders as their records will be clean.”

Mathew said the UAE has been known for its tax-free status and a move towards introducing tax may need a significant overhaul of how the business operates in the region especially for the unorganised SME sector.

“SMEs are going to face challenges implementing the new tax laws as compared to larger organisations which are normally operated with proper operating policies and structures. SMEs are the backbone of the Dubai economy, representing 95 per cent of all establishments in the emirate. Almost half of SMEs in the UAE are in Dubai [45 per cent], while 32 per cent are in Abu Dhabi and 16 per cent in Sharjah. The other emirates account for seven per cent.”

Sultan bin Saeed Al Mansouri, UAE Minister of Economy, said that the outlook for the economy is brightening despite regional and global macroeconomic challenges. “With two years into Expo 2020 Dubai, the economic growth momentum is expected to pick up on the back of a vibrant non-oil sector as the country remains on track to establish a diverse knowledge- and innovation-driven economy,” he said.

Most forecasts show that Abu Dhabi’s GDP growth is expected to pick up in 2017 to 3.9 per cent and 4.7 per cent in 2018 – outpacing the overall UAE’s GDP growth rates over the same period respectively, analysts at Knight Frank said in their UAE Market Review and Forecast 2018.

In Dubai, as the economy diversifies in line with Dubai Plan 2021, GDP growth is expected to grow 3.2 per cent in 2017 and begin to strengthen in 2018 to 3.5 per cent. Hafez Ghanem, World Bank vice-president for the Middle East and North Africa, said Dubai is a good example of how an oil exporter should diversify.

Resilient to global and regional headwinds, the UAE economy has already outpaced the rest of the GCC in economic growth in 2017 by making slow but steady progress. Forecasts by the International Monetary Fund and other institutions endorse the optimism shared by analysts.

The IMF said in its latest outlook that better days are ahead for the UAE with the economy right on track for a rebound with a 3.4 per cent surge in 2018.

Jihad Azour, director of the Middle East and Central Asia at the IMF, projected a 1.3 per cent growth in the UAE’s real GDP in 2017, while the overall GCC growth is expected to bottom out at 0.5 per cent this year, the lowest since the 0.3 per cent growth recorded in 2009 in the wake of the global financial crisis.

A forecast by the Institute of International Finance said the UAE would continue to be the best-managed economy in the region. The UAE possesses large financial buffers – estimated at around $670 billion – on top of its renowned safe-haven status, excellent infrastructure and a relatively diversified business-friendly economy. All these advantages will help the economy cope with the prolonged low oil price environment, the IIF said.

The UAE is firmly on course to be one of the best performers among Middle East and North African economies over the next five years as its vibrant growth continues to be driven by trade and tourism. Garbis Iradian, chief economist at the IIF, said despite predictions of a slowdown in economic growth elsewhere in the region, the UAE’s economic performance would improve in 2017 and 2018 with firming oil prices, an improvement in global trade and the expected easing pace of fiscal adjustment. But headline growth (oil and non-oil combined) will decelerate to 1.5 per cent in 2017 due to oil production cuts under the extended Opec agreement.

The country’s bold and decisive diversification into tourism, non-hydrocarbon trade and financial services will continue to mitigate the adverse impact of low oil prices. At present, hydrocarbon GDP accounts for only 30 per cent of total GDP and oil exports for slightly less than 40 per cent of total exports.

The IIF expects non-oil real GDP growth to accelerate to three per cent in 2017 and 3.5 per cent in 2018, supported by investment and non-oil exports of goods and services. Several high-frequency economic indicators, including the purchasing managers’ index, retail sales and number of tourist arrivals over the first nine months of 2017, suggest improvement in sentiment and private sector activity. The UAE is also pressing ahead with its drive to improve the business environment and competitiveness, even from an already high global ranking by the World Bank and the World Economic Forum.

The PMI averaged 55.8 in the first three quarters of 2017 as compared with 53.8 during the same period of last year (a 50.0 threshold separates expansion from contraction). Non-oil activity in Abu Dhabi is improving after a challenging two years during which deep government spending cuts slowed activity. Key projects, such as the construction of nuclear plants and airport expansion, are progressing, albeit with delays.

In the banking sector, which is well-regulated and supervised, the UAE will witness annual credit growth recovering from 1.7 per cent at end-2017 to about five per cent in 2018.

As the UAE continues to weather the effects of low oil prices and the moderation in non-oil economic activity, inflation is forecast to remain subdued as the continued decline in rents offsets higher imports prices while inflationary pressures from the introduction of VAT early next year will be partly offset by further declines in rents, analysts pointed out.

A joint report by the Institute of Chartered Accountants in England and Wales and Oxford Economics says that the UAE will record an accelerated growth in 2018 to 3.6 per cent from 1.7 per cent in 2017. The momentum will further gain pace in 2019 to post 3.6 per cent growth.

In the latest World Competitiveness Ranking of 63 countries by the IMD World Competitiveness Centre, issued in May 2017, the UAE rose to 10th place, making it the only Arab country to find a place among the super league of the global top nations.

In the most recent edition of the Global Competitiveness Report 2017-2018, issued by the WEF, the UAE topped the Arab world and ranked 17th globally in the global competitiveness ranking.

Source:https://www.khaleejtimes.com/business/economy/look-ahead-2018-bright-outlook-for-uae-economy

Russia’s Ambassador to Iran, Levan Dzhagaryan, announced Sunday that his government offered some support so that the Middle Eastern country revamps the Fordow nuclear facility, located near the northern city of Qom.

In an interview with Russia’s news agency TASS, Dzhagaryan said a delegation from the state-run nuclear agency Rosatom visited the Iran and discussed “certain practical aspects of the project to reconfigure the Fordow reactor.”

These recent Moscow-Tehran conversations are taking place within the framework of the Joint Comprehensive Plan of Action on Tehran’s nuclear program, which was signed in Vienna in the summer of 2015 and involves Iran, Russia, the United States, China, the United Kingdom, France and Germany.

According to the deal, the Persian nation should produce no weapons-grade plutonium and reduce its stockpiles of enriched uranium in return for the removal of international sanctions. After Iran implemented its obligations, former US President Barack Obama lifted sanctions. However, following his announcement of a new strategy towards Iran, President Donald Trump refused to certify the agreement on January 13, 2018 and later on said that Washington would withdraw from it unless the accord’s “disastrous flaws” were fixed.

The US President’s position is a cause of concern in both Tehran and Moscow, the Russian ambassador told TASS. “There are reasons to understand our European counterparts also worry about this, as they had applied much effort to reach the deal,” he said.

As part of the plan, Iran also agreed to convert the Fordow facility into a technology and science center and to give inspectors from the International Atomic Energy Agency access to the site. Early in 2017, IAEA verified the removal of excess centrifuges and infrastructure from the plant. According to NPO Nuclear Threat Initiative, 1,044 gas centrifuges remain installed in one wing of the facility, with IR-1 cascades installed separately for stable isotope production.

Sunday also marked the 39th anniversary of the 1979 Islamic Revolution in Iran and amid pro and anti-government rallies, some protesters burned a white sheet reading “Barjam,” the Farsi acronym for the JCPOA.

Source:http://www.mining.com/russian-iran-revamp-fordow-nuclear-facility/

Iraq is emerging from the destruction and strategizing the rebuilding of the country to position itself as a regional super power, said Frost & Sullivan’s recent research report on Assessment of Industry Sector Opportunities in Iraq.

Bridged between Asia, Middle East and African economies and strategically placed at the mouth of Europe, Iraq possesses immense locational advantage as a nation with opportunities that stand to be untapped.

The country benefits from immense natural wealth in the form of its huge reserves of natural resources. Having been brutally battered first by the Gulf war and more recently by the ISIS conflict, Iraq is just emerging from the destruction and strategizing the rebuilding of the country to position itself as a regional super power.

Newer opportunities are emerging with the return of semblance of political stability and initiation of the nation’s redevelopment and The recent report provides a broad overview of the current status of these high priority sectors, apart from providing a brief peek into addressable opportunity areas.
The recent report provides a broad overview of the current status of these high priority sectors, apart from providing a brief peek into addressable opportunity areas.
reformation plans, according to Frost & Sullivan.

Even as the nation’s re-building opportunity proves to be humongous and unique, investors and businesses alike are in need of business intelligence in understanding the right mode of entry, the most rewarding business model and business opportunity, stated the report.

Iraq possesses one of the largest oil reserves in the world, making it a highly attractive business opportunity.

As the country also focuses on diversification initiatives, opportunities unfurl in sectors such as construction, infrastructure, healthcare, transportation, energy and telecom which are being positioned as high priority development sectors, it stated.

The recent report provides a broad overview of the current status of these high priority sectors, apart from providing a brief peek into addressable opportunity areas.

Ali Mirmohammad, senior consultant for Iraq, Frost & Sullivan said: “With the end of the ISIS war, Iraq is on the path of reconstruction and economic resurrection that calls for sustained investment to the tune of over $900 billion within the next decade.”

“Iraq plans to focus on the Oil & Gas downstream value chain as well as minerals value chain, construction and infrastructure industries, healthcare, energy, tourism and financial services sectors to move the GDP growth rate by 10 per cent annually within the next decade,” explained Mirmohammad.

Following the ISIS war, multiple sectors are in a state of disarray and would need massive re-development and newer investments.

“Oil and gas, housing, infrastructure, industry, minerals, and service sectors will account for 65 per cent of the overall investment in the next 10 years, while ICT, transportation healthcare, water, electricity, tourism and renewable energy will grab the remaining 35 per cent investment in Iraq in the next 10 years,” he added.

Mirmohammad pointed out that the country requires over $30 billion per annum of foreign direct investment (FDI) to achieve its reformation and stabilisation goals within the next 10 years.

“With more than 39 million population, Iraq remains and attractive consumer market with potential of over $40 billion,” he added.

Source:https://auto.economictimes.indiatimes.com/news/industry/iraq-emerges-top-infrastructure-investment-hub/62959957

Those analysts who warned that oil prices can’t go on rising forever now have the chance to tell everyone else “I told you so.” Brent and WTI have fallen by 9 percent since the highs they hit in late January, with the international benchmark slumping to US$64.42 today in midday Asian trade, and West Texas Intermediate falling to US$60.61 a barrel.

The problem with bubbles is that they are so irresistibly shiny while they expand, but sooner or later every bubble pops. Sometimes the bang can be deafening, which is what happened four years ago. This time it was quite loud, too.

Energy analyst Tom Kloza from the Oil Price Information Service warned at the end of January that there is a “tremendous speculative bubble.” He warned that the price is due for a serious correction. Reuters’ John Kemp noted that bullish bets on Brent, WTI, and the four most popular oil product futures are at all-time highs, which also suggests a correction is pending.

Now, the correction is taking place. It may have started with the stock market slip on Monday, prompted by higher bond yields, but it continued with the Energy Information Administration reporting that the United States have breached the 10-million-bpd oil production threshold for the second time since last November—and apparently much earlier than most observers expected.

U.S. drillers produced 10.25 million barrels of oil daily last week, the EIA said in its weekly petroleum report, and prices slumped further as doubts about the global oversupply—which is still lingering—were reignited. But the weekly report was just additional kindling to EIA’s latest Short-Term Energy Outlook, which forecast that U.S. oil production will top 11 million bpd in 2019.

Source:https://oilprice.com/Energy/Oil-Prices/The-Oil-Bubble-Has-Burst-What-Now.html

Increases in both output and new orders contributed to the growth

Saudi Arabia’s non-oil private sector ended 2017 with a sharp improvement in business conditions, according to the adjusted Emirates NBD Saudi Arabia Purchasing Manager’s Index.

The index – a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy – fell fractionally to 57.3 during December, from 57.5. Overall, however, the latest figure showed that expansion remained steep and above 2017’s average.

Additionally, non-oil private sector companies in Saudi Arabia continued to report steep rates of expansion in output, with anecdotal evidence suggesting that domestic demands and an increase in orders from neighbouring countries has contributed to higher output requirements.

Inflows of new business to Saudi non-oil private sector firms were also found to have increased over the course of December. While the expansion was sharp, it remained below the historical average, according to Emirates NBD.

New export orders also expanded at the fastest rate since August, which extended the current sequence of growth to five months. Additionally, non-oil private sector companies continued to hire more staff in December, although at a slower rate than the series’ long-run average.

Average cost burdens in Saudi Arabia were found to have risen significantly during August, and increased demand for raw materials led to higher prices. Despite rising input costs, selling prices only rose at a fractional pace overall amid competitive pressures in the non-oil private sector.

Saudi Arabia’s private sector ends 2017 with strong growth
Increases in both output and new orders contributed to the growth

Inflows of new business to Saudi non-oil private sector firms were also found to have increased over the course of December.
Saudi Arabia’s non-oil private sector ended 2017 with a sharp improvement in business conditions, according to the adjusted Emirates NBD Saudi Arabia Purchasing Manager’s Index.

The index – a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy – fell fractionally to 57.3 during December, from 57.5. Overall, however, the latest figure showed that expansion remained steep and above 2017’s average.

Additionally, non-oil private sector companies in Saudi Arabia continued to report steep rates of expansion in output, with anecdotal evidence suggesting that domestic demands and an increase in orders from neighbouring countries has contributed to higher output requirements.

Inflows of new business to Saudi non-oil private sector firms were also found to have increased over the course of December. While the expansion was sharp, it remained below the historical average, according to Emirates NBD.

New export orders also expanded at the fastest rate since August, which extended the current sequence of growth to five months. Additionally, non-oil private sector companies continued to hire more staff in December, although at a slower rate than the series’ long-run average.

Average cost burdens in Saudi Arabia were found to have risen significantly during August, and increased demand for raw materials led to higher prices. Despite rising input costs, selling prices only rose at a fractional pace overall amid competitive pressures in the non-oil private sector.

On a negative note, business confidence towards future growth prospects was found to have declined slight, even while remaining generally optimistic. An upturn in business conditions and increased marketing activity were expected to underpin output growth in the next year.

“The December PMI survey continued to show a strong rate of expansion in December, and the data suggests that non-oil growth accelerated in the final quarter of 2017, as well as for the year as a whole compared to 2016,” said Khatija Haque, head of MENA research at Emirates NBD.

“Nevertheless, we expect headline GDP growth to be close to zero in 2017 as substantial oil production cuts will offset the expansion in the non-oil sectors of the economy.

“We are more optimistic about growth prospects in 2018 however,” he added.

Source:http://www.arabianbusiness.com/politics-economics/386903-saudi-arabias-private-sector-ends-2017-with-strong-growth

AMMAN, Jordan — The ancient city of Petra, 70 years of regional turmoil and the spiralling Syrian refugee crisis. All spring to mind at the mere mention of Jordan, the Middle Eastern nation that shares a border with Iraq and Syria. Few of us, however, would think of its vibrant garment manufacturing industry.

But look at the labels stitched into clothing made by Gap, Victoria’s Secret, Hanes, Eddie Bauer, Lands’ End or Macy’s and there it is: “Made in Jordan.” Garment exports make up roughly 20 percent of the country’s gross domestic product.

In the arid outskirts of Jordan’s cities sit a growing number of industrial parks that house garment factories quietly churning out clothing for some of the world’s most recognisable brands.

There are currently 75 factories producing everything from towels to t-shirts, fleeces to frilly knickers. They account for 95 percent of the industrial workforce, and 95 percent of apparel exports.

Despite its reputation as the safest place in the Middle East, instability in Jordan is at an all-time high. More than one million Syrian refugees are jostling for shelter and a few Jordanian dinars a day (one dinar is equivalent to $1.41). Jordan is the only Arab country still active in the coalition against Isis, and the threat of destabilisation from Syria and Iraq have authorities working all-out to protect the country’s northern and eastern borders.

Jordan’s political opposition, the Muslim Brotherhood, is breaking apart, allowing the dissenters to slip under the radar. The country’s ruler, King Abdullah, has increasingly relied on financial and practical support from his allies, such as the United States, to support not only his people, but also asylum seekers from Syria, Iraq, Sudan and Yemen. Many diplomats in Amman privately admit they think of a terrorist attack in terms of ‘when,’ not ‘if.’

Yet, somehow, the industry is growing at a time when all common-sense indicators suggest it shouldn’t be.

“When you step into Jordan, you never feel the regional tumult,” says Radhakrishnan Putharikkal, president of the Classic Fashion factory on the sprawling, 118 hectare Al-Hassan Industrial Estate just outside the northern city of Irbid.

Classic is now the leading garment manufacturer in the Kingdom. Its exports accounted for nearly 13 percent of Jordan’s $1 billion garment exports to the United States last year, according to Jordan’s Trade Ministry. Established in 2003, it has grown from a small-scale operation (300 people, 130 machines and $2 million turnover per year) to 15,000 employees, 7,500 machines spinning out close to 200,000 garments each day, and an annual turnover of more than $250 million.

“Jordan’s stability and location made us choose it over Morocco or Tunisia, and our calculations were 100 percent right,” says Putharikkal.

Industry origins

In contrast to its neighbours Israel and Saudi Arabia, Jordan is a poor country, devastatingly dry with few resources: potash, phosphates, concrete and tourism top the list. Oil is imported, along with nearly half the country’s food and the bulk of manufactured goods. Despite the economics, how Jordan became a manufacturing powerhouse is more about politics than purchasing power.

When the 1994 peace accord was hammered out between Jordan and Israel, a key economic element was introduced: the Qualifying Industrial Zone (QIZ). Under this legislation, goods produced in collaboration with Israel could enjoy freer access to the US market. The QIZs were packaged as a “peace dividend,” says Jordan scholar Sean Yom, a political science professor at Temple University in Philadelphia.

“They were presented this way to convince many Jordanians that the 1994 peace accord with Israel would benefit them. It was supposed to catalyse the export sector, spread more jobs and attract foreign investment.”
This happened, but only up to a point: the group that benefited most from foreign investment was merchants and businessmen, people who already had financial capital and could leverage their connections to secure new contracts, and as Yom puts it, “rake in more profit.”

“Most of the jobs initially went to foreign labour anyway, before a backlash forced managers to hire locally,” says Yom.

Some experts say the export potential of the QIZ project became moot in 2000, when the US inked its free trade agreement with Jordan, cutting out the need for an Israel connection. But others say the QIZs served another purpose: fast-tracking the free trade deal with the US.

“Without these factories in the QIZ zones we could never have started the process to attract these Hong Kong and China manufacturers and the US trade,” says Halim Salfiti, the former chief executive of Al Tajamouat Industrial City.

“There was a process of the foreign manufacturers educating the locals by showing them how to do this. The foreign manufacturers started working here, then they started trading. And they had relationships with buyers, so for Jordanian manufacturers starting up, that was a door-opener. It was easy to market,” says Salfiti.

With most of the old QIZ factories growing and new industrial areas springing up under the US-Jordan free trade agreement, business boomed. In 2006 and 2007, the multi-billion dollar business of exporting manufactured goods (mainly clothing) was Jordan’s largest export.

Workforce challenges

One area where the QIZ project failed, and where the garment manufacturing industry under the US free trade agreement is still floundering, is around employing locals, particularly women. Official statistics show that for years, the labour market participation of girls and women aged 15 and above has stagnated at around 12.6 percent, compared to 60.3 percent of men in the same age bracket.

Classic has struggled with this in its urban factories, which employ around 2,000 Jordanian workers. Cultural factors are significant: Jordan is a socially conservative country and in rural areas and smaller cities, like Ajloun, where Classic has a satellite factory mainly employing Jordanians, women tend to withdraw from work upon marrying.

Anecdotally, among Jordanians, factory work tends to be seen as shameful, and even in areas with high levels of unemployment, meeting labour demands with skilled or trainable local staff is challenging.

Classic has set up a crèche as a way of retaining its 90 percent female workforce at its Ajloun factory. But employee turnover is between 15 percent and 20 percent, mainly due to marriages.

Local employees are also more expensive: Jordanian workers receive an additional 80 dinar per month for their living expenses, whereas international workers receive in-kind payment in the form of housing, food and living costs.

Foreign workers typically come to Jordan on three-year contracts and work six eight-hour days, with 125 percent minimum wage pay for overtime and 150 percent for holidays. Many are members of Jordan’s General Trade Union of Workers in Textile Garment and Clothing Industries, which in 2013 saw a landmark collective bargaining agreement on wages, employment conditions and seniority issues take effect.

All of this is a marked improvement over conditions during the sector’s most prolific stretch, around 2006 to 2007. Factory owners and subcontractors were accused of a range of workers’ rights abuses at the factories making clothing for Victoria’s Secret, as well as Levi’s, Gap and Calvin Klein. A New York Times investigation accused Jordan of running sweatshops where workers were abused and even imprisoned.

Imported labour

Better Work Jordan runs a workers’ centre at Al Hassan where foreign workers can access social support, prayer rooms, information on human rights and labour rights, and take part in social activities from holiday celebrations to games. The organisation also offers employers training in labour law and human rights.

Linda Kalash, executive director of Tamkeen Fields for Aid, a Jordanian non-governmental organisation that works to protect migrant workers’ rights, says the situation still isn’t good enough.

“The violations continue,” she told BoF at a meeting in her Amman office. She faces a steady stream of migrant workers in need of help, from making complaints about treatment on the factory floor to requests for legal help with hefty fees incurred for breaking contracts early. Kalash says grievances are fewer and less egregious than in past years, but she and her team are still run off their feet.

What next?

As Jordan’s tourism industry collapses in the face of regional chaos, revenue from garment manufacturing is becoming more valuable. Growing the sector and employing more locals and more women is the next challenge. And here, progress begets progress: nine months ago Jordan’s Ministry of Labour inked a deal to establish a new, partly-subsidised factory in the country’s deprived Husseiniya district. The project guarantees 500 jobs for local women.

With a busy, high-functioning port in Aqaba on the Red Sea and access to Israel’s Haifa port through the Allenby Bridge crossing, Jordan is well placed to be a global manufacturing hub. Shipping from Jordan to the US is quicker and cheaper than shipping from Southeast Asia, and as Classic’s Putharikkal points out, Jordanian factories are developing a reputation for good work delivered on time.

As regional tensions ratchet up, it’s undeniable that some sort of change is coming. But in Jordan’s factories, for now, at least, it’s business as usual.

Source:https://www.businessoffashion.com/articles/global-currents/made-in-jordan-garment-manufacturing-industry

As part of PAM’s responsibilities in sector governance and organisational structure, the primary objective of the law is to address the factors that have historically hindered foreign investment in Omani mining. Drafting was reportedly completed in 2015, with the legislation submitted to government ministries for review.

Priority Issues
Subject to final approval, the new mining law is expected to decrease complexity in the sector and make operating in Oman easier and more transparent for potential investors. The draft law envisages, for example, longer mining leases, making it attractive for investors to enter the sector. It is also expected to centralise a process of licensing applications that currently involves multiple agencies.

Stakeholders are hoping that the regulatory revamp will lead to increased legal clarity. “Mining has huge potential in Oman, but we have yet to see a large-scale project be undertaken in the country, and thus regulating the industry is still a work in progress,” Ernst Grissemann, managing director for Bauer Nimr, a German construction firm, told OBG.

To create the draft legislation, PAM reviewed mining sector regulatory frameworks from around the world, reportedly focusing on provisions including local content, investment incentives, investor clarity, extending the duration of licences, penalties for lack of investment and benefits for local communities. Fixed royalties and tax rates are expected to be purposefully left out of the new law in favour of adjustable royalties that can incentivise investment by triggering lower rates during periods of very low commodity prices. Hilal bin Mohammed Al Busaidy, PAM’s CEO, has suggested that local content development will be a priority objective once the new law comes into force.

The new law is also intended to implement more regulations to protect the mining sector and prescribe heftier fines and jail terms for violations, a concern regularly raised by members of the Majlis Al Shura, the lower chamber of the Council of Oman.

“Oman’s mining law needs more teeth to combat evaders of royalty. The government is losing tens of millions of rials in revenue from this sector,” said Tawfeeq Al Lawati, a member of the Majlis Al Shura, speaking to local press in 2015. “Although the government has put in place a ban on exports of mining products in the form of raw materials, there are several companies and individuals that do the opposite,” he said. Al Lawati attributes a sharp rise in construction material prices on the local market to poor regulation, which enables exploitation by companies.

Sector Impact
Despite the anticipated positive effects of the new law on the sector, the immediate impact of PAM’s draft legislation has been to slow down the licensing process. Even well-capitalised companies report having difficulties obtaining licences for new projects, with the authority seemingly holding off on many applications until the new law is ratified.

However, the longer-term implications of the law are expected to be more positive. By rationalising the mining sector and streamlining unnecessarily bureaucratic licensing processes, PAM is providing real incentives for investors looking to enter the mining sector in Oman.

“What sector players want more than anything from the anticipated mining law is a clear and concise framework under which we can operate,” Dean Cunningham, CEO of Kunooz Oman Holding, told OBG. “This should be established based on international benchmarks and best practices in order to ensure the attractiveness of the sector to global capital,” Cunningham added.

Source:https://oxfordbusinessgroup.com/analysis/improved-regulation-sight-new-legislation-expected-address-stakeholder-demands

Muscat: Experts discussed the importance of the industrial sector to the Sultanate’s future, ahead of Oman’s Day of Industry, tomorrow.

“The industrial sector is a pillar of the national economy and contributes to the creation of employment opportunities for Omani youth,” Managing Director of Sohar Steel Group Khalid Tawfiq Abdul Rasoul said.

The industrial sector has become the backbone of Oman’s drive to become a manufacturing-based economy because of the government’s prioritisation of localising industries and diversifying away from oil.

Numerous initiatives were launched to achieve this objective, including the establishment of a bus factory and other projects designed to build local capacities in multiple areas.
“Industry remains at the forefront of the world’s economic sectors and plays an important role in increasing the income levels of countries and establishing sustainable job opportunities for its youth,” Dr. Said Al Mahrami, a member of the State Council, said.

Economic and industrial experts stressed that Oman was steadily moving towards achieving sector-wide development, leading to the construction of specialised industrial zones, new roads, and ancillary services. “Industry has the benefit of three revenue streams, which are difficult to sustain in other sectors, due to its ability to add value to oil, mining, farm and other sectors.

“In addition to achieving financial returns through export or supplying the local market with commodities and keeping the largest amount of money inside the country, which in turn contributes to the expansion of the economic cycle and doubling of trading,” Al Mahrami added.

The use of technology in national industries has become necessary to reduce costs and compete globally. Oman’s successful push on both fronts drew praise for industrialists.

Industry Day

“Since the founding of Omani Industry Day, we have witnessed an increase in the number of factories, a growth in the finance of industrial projects, as well as funds for SMEs,” Kamla Al Awfi, CEO of World Natural Stones, said.

Sulaiman Al Rashedi, Chief Executive Officer of Raki, said: “The industrial sector has contributed to the progress of many countries, such as Singapore and Japan, which despite having few natural resources are among the strongest economies in the world, thanks to their industrial prowess.”

“We look forward to seeing large industrial cities in the time to come,” he added.