Oman Forum 2017 made a strong pitch to nurture SMEs, develop entrepreneurship and create employment opportunities for Omanis. HE Abdullah Al Salmi, Executive President, Capital Market Authority was the chief guest and HE Rashid Ahmed Al Shamsi, Deputy Chairman, Majlis Al Shura, was the guest of honour at the event held at Sheraton Oman on December 20. The Forum is an annual Arabic debate organised by the leading Arabic business magazine Alam al-Iktisaad Wal A’mal (AIWA), published by United Media Services (UMS). The Forum brought together a broad spectrum of stakeholders, to share perspectives and ideas on job creation and sustainability of SMEs.
The 2017 edition comprised two panel discussions on sustainability and survival of SMEs and job creation and skill development. The event looked at how SMEs could stay resilient and survive in the current economic scenario and take on new opportunities aimed at motivating and inspiring entrepreneurs, especially in the backdrop of the Sultanate planning to create 25,000 jobs for Omanis.
heikh Salah Hilal Al Maawali, CEO, SME Development Fund set the stage for an animated discussion with his key-note address. Fourteen institutions are currently supported by the SME Development Fund, Al Maawali said adding that there are no magical or instant solutions to the challenges faced by SMEs. Team work is essential and the government must facilitate the SMEs with resources.
Large corporate houses should give the SMEs at least sub contracts to enable them to sustain and flourish in the market. He stressed that large firms in the private sector should allocate 10 per cent of their projects to SMEs. The SME Development Fund has tailored a set of products that are specially designed to provide SMEs with flexible funding to meet their needs, he added.
Sheikh Al Maawali said that commercial banks, which are unable to achieve a minimum lending of 5 per cent to SMEs should be penalised. Banks should grab the opportunity by extending lending to the SME sector, which constitutes 90 per cent of the corporate sector in Oman,” he said.
Falah Al Lawati, Business Development Leader, EY Oman in his presentation said that education plays a vital part in SME development. Educational strategies should focus on every market sector. People need to be really fast in terms of innovation as there is something new in the market every day. Omani expertise has enhanced due to the growth in education, he said. SMEs must use KPIs (Key Performance Indicator) as a measuring tool to analyse the business outcomes and ROI of the company.
Sami Al Hassan, General Manager, GroFin informed that as per their study, 65 per cent of the projects by SMEs lacked suitable HSE standards; 40 per cent of SME projects are not compatible with government regulations, 70 per cent do not have accounting standards and 40-50 per cent of SMEs capital is at risk. GroFin, he said helps and supports entrepreneurs by providing them with various mechanisms.
Ishraq Al Sheryani, CEO, High Ambition Centre in his presentation on SME-a success story, said that he struggled with a debt of RO60,000, rejections and multiple problems starting the High Ambition Centre in 2012 with RO500. The business will close 2017 with RO500,000 in revenues. “Entrepreneurship is difficult, but possible,” he added.
Oman Oil Company was the strategic partner of the Forum. The event was powered by Genesis (OTE Group). SME Development Fund was the Associate Partner. The support partners included Shell Oman, Better Homes, InstOG, GroFin, Sandan, Taageer Finance, OMIFCO and Takatuf Petrofac Oman (TPO). Times of Oman and Shabiba were the Media partners along with Oman Economic Review. Oman Printers and Stationers was the print partner.
Two panel discussions were conducted in Oman Forum 2017. The sessions were moderated by noted TV journalist Yusuf Al Hooti. The first panel session focused on the subject – “Sustainability and Survival of SMEs,” and the panelists included Sheikh Salah Hilal Al Maawali, CEO of SME Development Fund, Khalid bin Al Safi Al Huraibi, Acting CEO, Riyada, Ahmed Al Hooti, Member of OCCI board and Head of the SME Committee, Said Al Rashdi, CEO, Sandan Development, Ishaq Al Sheryani, CEO, High Ambition Centre and Said Al Sarhani, Head of Supply Chain Management, Oman Oil Company.
Sheikh Salah Hilal Al Maawali said finance companies must provide SMEs with opportunities and fund the youth. There are initial hardships in acquiring a contract; but hardwork and confidence is key.
Khalid bin Al Safi Al Huraibi said, “We are trying our best to enhance the competitiveness of small and medium enterprises so that they can export their products. We encourage them to enter into partnerships with foreign companies.” Riyada encourages SMEs to form clusters. SMEs, he said should develop capability to compete in the international market. “SMEs should be independent and not overdependent on the government. The Government cannot be expected to support all the time.”
Said Al Rashdi said that opportunities exists for SMEs. Entrepreneurs must be motivated to strive for success. The road is not easy but it is not insurmountable, he said.
Ahmed Al Hooti, Member of the OCCI Board and Head of the SMEs Committee said, “Corporates in Oman continue to play a vital role in supporting small and medium companies. However SMEs need to equip themselves by developing the skill sets and offering the services catering to the market.”
Said Al Sarhani, said, “When we ask contractors to give 10 per cent of their contracts to SMEs they ask us to provide them with a list of SMEs, their expertise, contact details and so on in English. There is a need to create a platform for SMEs detailing standards and prerequisites, he said. International firms do not allocate 10 per cent of their contracts to SMEs as there are no legal penalties for big corporates. Subsidised costings provided to SMEs causes them not to collaborate with MNCs. This is one of the major flaws in the SME sector.
Prior to the second panel session, Glen Meek, General Manager, Better Homes in his presentation on Smart offices for SMEs, said that smart offices help in developing SMEs. The smart office set up by the company in Muscat uses solar power and maximum glass usage for natural day light. Staff retention is key to any business particularly SMEs. They are key assets to the company.
Lina Hussein, Head of Communications and Social Impact, Zubair SEC in her presentation, said that there were 27,923 registered SMEs in Oman contributing to 15-20 per cent of the GDP as on June 2017. She further said that 70 per cent of SME owners are less than 35 years of age reflecting a lack of experience and professionalism. According to NCSI, there is a 32 per cent decline in SMEs in Oman. SMEs face a lot of barriers such as lack of support services, access to high costs of finance and limited availability of skilled staff or experienced managers. The ecosystem must strengthen and unify the SME support as a single entity, develop entrepreneurial curriculum and simplify the registration process of SMEs.
Job creation and skill development was the topic for discussion at the second panel session. The panelists included HE Dr. Saleh Bin Said Al Masan, Head of Economic and Financial Committee, Majlis Al Shura, Mohammed Bin Hassan Al Ansi, Head of the Committee on HR Development and Labour Market, OCCI, Simon Karam, Director, Al Sarooj Construction, Aqil Al Ajmi, Senior Consultant for Assessment at Takatuf and Abdul Qader Al Sayari, General Manager (Support Services), Oman Shipping Company.
Speaking at the session, Dr. Saleh bin Said Masan said there is incompatibility between the demands of the job market and the qualifications of Omani graduates and this gap needs to be bridged. Late payment of dues and the adverse economic situation has led to job losses and pressure on SMEs, he said. The private sector has about 1.8 million employees out of which only 200,000 are Omanis. There is improper mechanism of substitution. “We should observe the successful sectors in the market such as Finance, Health, Oil and Gas and adapt their strategies,” he said.
Simon Karam said that economy creates jobs and SMEs and not vice versa. There should be a centralised governance and established training institutes for corporate training.
Mohammed Bin Hassan Al Ansi said, “Today almost all bigger projects are being awarded to foreign companies. We require more public-private partnership to support the SMEs, and the private sector needs to be given more consideration.”
Aqil Al Ajmi said “Omanisation is still in its infancy. There is a noticeable lack in the number of mid-level Omani professionals in various companies.”
Abdul Qader Al Sayari said there exists a huge gap between the skillsets of the Omani graduates and the actual requirements in the job market. Omanization in the private sector is only 11 per cent. In order to create an attractive environment for work, we have to create an attractive environment for investment. 70 per cent of the job seekers in the market are women, who are college graduates and diploma holders. “We need to create an environment for creation of jobs for Omanis.”
“Oman Forum’s primary objective is to promote thought leadership and facilitate a live public discussion in Arabic on the challenges and opportunities facing the economy and society. The 2017 Forum brings key representatives from diverse sectors face-to-face to share their views and lay out a concrete roadmap for enterprises to take on challenges arising out of a fast changing economic environment,” said Khalfan Al Rahbi, Editor-in-chief of Alam al-Iktisaad Wal A’mal (AIWA) in his welcome address.