Oman's SMEs failed to benefit from stimulus packages

Published 22 Sep,2021 via Muscat Daily - Muscat: A new study on the impact of COVID-19 on Oman’s economy has found that the government must devise more effective mechanisms to provide fiscal stimulus packages to companies affected by the pandemic. Many small and medium-sized enterprises revealed that they did not benefit from these schemes.

The study also highlighted the need for more coordination between the Ministry of Labour and the Ministry of Higher Education, Research and Innovation to address the mismatch between required skills and level of education imparted. It found that many job vacancies were not filled following the departure of expatriate workers due to lack of technical skills among nationals.

Titled ‘The Impact of COVID-19 on the Omani Economy’, the study was led by Dr Ashraf Mishrif, Oman Chamber of Commerce and Industry Chair in Economic Studies at Sultan Qaboos University, and funded by the COVID-19 Research Programme of the Ministry of Higher Education, Research and Innovation.

Mishrif and his team aimed to provide an in-depth analysis of the impact of the pandemic on the sultanate’s economy and its consequences on key sectors such as transportation, logistics, SMEs, manufacturing, labour, insurance and finance.

‘The findings of this study were based on primary and secondary data gathered through survey questionnaires as well as semi-structured interviews with government officials, corporate executives, business owners and managers from Oman,’ stated a press release.

Hydrocarbon sector

According to Mishrif, the impact of the pandemic has been severe as the economy heavily depends on the hydrocarbon sector, which accounts for 30 per cent of the GDP. “The lockdown and travel restrictions resulted in significant reduction in performance and activities of factories and commercial centres due to decrease in demand of products and services. Initial investigations have shown that most manufacturing and non-manufacturing sectors suffered significant revenue and workforce losses as a result of frequent border closures, service interruptions, drop in demand and supply shortages.”

Mishrif has made recommendations for the government and the business sector, based on the findings of the study, for Oman’s economy to flourish.

His recommendations include significant investments by the government and private sector enterprises in innovation and digitalisation in order to upgrade the economic and civil institutions in a way that accelerates engagement with the technological advancements of Industry 4.0.

“The government has to find more effective mechanisms to distribute fiscal stimulus packages to companies affected by the COVID-19 pandemic, as many SMEs interviewed by researchers complained that they did not benefit from these schemes.”

He also recommended that the Ministry of Higher Education, Research and Innovation initiate and support innovation schemes at universities and research centres to encourage knowledge generation and technological development that will give Oman a competitive edge in the ensuing years.

The study also called for a higher level of coordination between the Ministry of Labour and Ministry of Higher Education, Research and Innovation to prepare a national workforce with the right skills to work in areas such as artificial intelligence, big data mining, and the Internet of Things.

Mishrif also recommended that government officials and company executives put in place alternative strategies to deal with unexpected circumstances and be prepared to effectively deal with natural disasters, biological war and global financial crises in order to minimise the impact of such events in the future.

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