Developmental milestones
Developmental milestones
Road Sector
Roads figure among the most vital elements of infrastructure and they are considered a measure of a country’s development in terms of economy, industry and public services because of their role in ease of movement of people, goods and raw materials. Also, because they connect a country’s districts, towns and villages, roads play a significant role in achieving economic enterprise and commercial prosperity. The road sector, like other sectors in the Sultanate, has witnessed remarkable growth during the past years of the Omani renaissance. The Ministry of Transport and Communications has been keen on building a vast road network with world-class specifications, so that this sector could keep up with the country’s economic development and merge smoothly with road networks of neighboring countries. The Ministry of Transport and Communications keeps expanding the Omani road network on a regular basis, working at different levels at the same time: While progress is being achieved in dual carriageways and city masterplans aimed to achieve swift traffic and road safety, work is also in full swing in side roads connecting city quarters and towns. The Ministry is also carrying out a programme to link rural areas with urban centres, and this realizes a number of social and economic objectives. The Ministry is also building tarmac, as well as dust roads in the districts of the country, always bearing in mind the concept of road safety and ongoing maintenance. The development of the road sector goes hand-in-hand with the government’s plans and strategies for the country’s comprehensive growth of all sectors. In 2018, Al Batinah Expressway—a long stretch of 270 kilometers—was opened, linking the governorate of Muscat with North Batinah governorate and South Batinah governorate. This expressway aims to achieve logistic connection of all land, sea and air terminals. It provides access to major markets and industrial estates and free zones. In 2017, a number of roads were opened, including the last 90-km segment of Sharqiyah highway (whose total length reaches 248 km), the Sinaw-Mahout-Duqm highway (which constitutes the first and second batches of a 181-km road), the dualization of Taqah-Mirbat road (35 km), and the dualization of Nizwa-Ibri road (47 km). Major road network expansion work in 2018 included the completion of Al Sharqiyah Expressway, the dualization of Adam-Thamrait road (320 km), the dualization of Barka-Nakhl road (38 km), the dualization of Al Rustaq Cliff road (14 km), the Abaila Fayadh road in Buraimi governorate (41 km) and the 34-km dualization of Ibri-Yanqul road—all projects being executed by the Ministry of Transport and Communications. The Sultanate won first place in 2018-2019 Best Trip Destination Award, Middle East, conducted by Condé Nast Traveller's magazine, and this reflects the prominent place of Oman in the world tourism map. By 2018, the Sultanate had set up a modern road network of 15,230 km. The highlighted and served the country’s tourism hotspots and the country’s diverse topographical areas, accessible by road, along the beaches, the mountains, the valleys and the desert camps—all giving an unforgettable experience to in-country visitors and foreign tourists.
Financial Activity
The Banking Sector The Central Bank of Oman (CBO) works to provide an enabling environment for the finance sector in general and the banking sector in particular, supporting its vital contribution to economic growth and diversification, as well as maintaining the purchasing power of the national currency, the Omani Rial, both internally and externally. In April 2017 the Central Bank was recapitalised to one billion Omani Rials to enhance the ability of the bank to function smoothly and to cope with domestic and global monetary and financial developments. Keeping abreast of constantly evolving international accounting standards, the CBO issued a circular to banks on 13 April 2017 directing them to apply International Accounting Standard No. 9 bearing on transactions involving financial instruments. The directive was a response to the lessons of the global financial crisis. This standard is considered to be a qualitative leap forward in accounting for financial instruments, especially as relates to default. In a pre-emptive action to protect the banking and leasing systems, and to increase flexibility in their working procedures, financial institutions have been directed to reassess the terms of restructured loans and to bring dividend distribution in line with capital adequacy ratios. Typifying the flexible approach taken by the CBO in its banking policy, the directives for reassessing the terms were adjusted downwards to 5% and 10% for 2016 and 2017 respectively, with the first application of the full 15% rate deferred to 2018. This step was calculated to reduce the vulnerability of borrowers to challenges associated with the current slowdown in economic activity and to guarantee a flow of credit to the productive sectors. Meanwhile the capital adequacy ratio has risen further, to 17% at the end of December 2016. The ratio of nonperforming loans remains low, at 2%. Credit issued by conventional and Islamic banks and other depository companies rose 10.1% to a total RO22.1 billion at the end of December 2016. Credit granted to the private sector rose by the same rate to RO19.7 billion. Total deposits with the banking sector grew by 5.2% to RO20.4 billion at the end of 2016. The Capital Market The Capital Market Authority (CMA), which supervises the capital and insurance market sectors, is constantly looking at innovative and competitive financing alternatives that will guarantee optimal recruitment of capital and then link it to productive projects that raise the efficiency of the national economy. The capital market has characteristics and attributes that qualify it to play a pivotal role in project financing. It is hoped that the capital market will play a greater role in financing initiatives adopted under the national programme for economic diversification, Tanfeedh, given the particular suitability of this form of long-term financing for large projects, as well as being a means to involve all segments of society by channelling private savings into these projects. During 2016, the capital market provided RO1.6 billion towards financing the establishment or expansion of investment activities in various sectors, including oil, services, industry, transport and others. In 2016, the Authority announced several new relevant pieces of legislation and amendments to existing regulations. Most notable among these updates were the stipulations around sukuk, or Islamic bond, transactions, along with several amendments to executive regulations of the Capital Market Law and a reclassification of markets raising the number of markets categorised by capitalisation and liquidity to six: the regular market, the parallel market, the followup market, the third market, the securities and sukuk market and the preferential rights market. This trend comes at a time when the sector is witnessing an expansion in the quality of financial products on offer and which are expected to be more popular in the coming period. Muscat Securities Market Trading on the Muscat Securities Market in 2016 was valued at RO959 million, compared with RO1.4 billion in 2015. There was positive interest from local investors, who were responsible for 82.6% of the volume of purchases and 73.6% of sales. The main index rose 7% to close the year at 5,782 points, up 376 points on the year. The market value of listed companies at the end of 2016 was RO17.3 billion, compared with RO15.7 billion at the end of 2015. In the first half of 2017, trading volume was down somewhat to RO471.3 million, as against RO560.4 million for the corresponding period of 2016. Market capitalisation at the end of June 2017 stood at RO17.6 billion, up RO322.4 million from the end of 2016. Insurance Sector The Takaful Insurance Law was introduced in 2016 to provide the legislative and regulatory framework for the sector, and brought with it a variety of insurance products tailored to market needs and emerging individual and institutional trends. Takaful (‘mutual responsibility’ in Arabic) describes sharia compliant insurance system. Proposed amendments to the Unified Motor Vehicle Insurance Policy document were adopted, offering greater protection and transparency to policy holders. Additional benefits and options became available, commensurate with increasing sophistication in customer demand. Meanwhile, in 2016, the CMA published a guide to quality standards applicable to insurance policy products. The guide outlines the minimum quality standards expected of insurance companies and brokers in the Sultanate. The overall volume of direct insurance premiums grew 2% in 2016 to RO450 million, from RO442 million in 2015. Of this total, Takaful policies were responsible for RO42 million, or 9.3% of total direct premiums.
