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Saudi Arabia Considers Establishing Industrial Zone in Oman

Saudi and Omani officials discussed prospects for cooperation and integration opportunities in the special economic zones in the Kingdom and the Sultanate. (Asharq Al-Awsat)
Saudi and Omani officials discussed prospects for cooperation and integration opportunities in the special economic zones in the Kingdom and the Sultanate. (Asharq Al-Awsat)
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Saudi Arabia Considers Establishing Industrial Zone in Oman

Saudi and Omani officials discussed prospects for cooperation and integration opportunities in the special economic zones in the Kingdom and the Sultanate. (Asharq Al-Awsat)
Saudi and Omani officials discussed prospects for cooperation and integration opportunities in the special economic zones in the Kingdom and the Sultanate. (Asharq Al-Awsat)

Saudi Arabia is considering developing an industrial zone in Oman, and the two Gulf states have discussed the possibility in investment talks, the Saudi Press Agency reported.

Saudi and Omani officials met earlier this month to discuss investment opportunities.

Discussions this week tackled “prospects for cooperation and integration opportunities in the special economic zones in the Kingdom and the Sultanate,” SPA added.

Saudi Arabia is in the midst of an ambitious economic development plan (Vision 2030) to wean the economy off oil, while Oman recently introduced a medium-term plan to rein in its debt that has grown at breakneck pace in recent years.

Both are also keen to attract foreign investment as part of their reform efforts.

“The meeting also discussed studying the possibility of establishing a Saudi industrial zone in Oman, where the Saudi side would develop, operate and manage the zone and build logistical routes to transport goods between Saudi and Omani special economic zones,” SPA said.

Oman announced Wednesday it will start granting long-term residence visas to foreign investors.

The country has been hit hard by the COVID-19 crisis and the associated drop in oil prices and is looking for means to boost its state revenues and drive investment in the country.

Oman’s initiative, effective from September, grants foreign investors and retirees the right to reside for long periods in the Sultanate, the Ministry of Commerce, Industry and Investment Promotion explained.

The latest move to boost foreign direct investment into the Sultanate, will see Oman grant investors residency for five or 10 years, which is subject to extension.

Expatriates make up around 42 percent of Oman’s population, government data from 2020 showed. The country has a long-standing workforce nationalization policy, known as Omanization, to create employment opportunities for its citizens.

It has pushed forward its program of replacing foreign workers with Omani citizens to ease pressure on the job market but youth unemployment is relatively high at over 10 percent.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.