OER Business Summit 2017 calls for collaborative efforts and push for public-private partnerships
Industry leaders at the OER Business Summit 2017 called for collaborative efforts between various stakeholders, concerted push for public-private partnerships and transparency to drive forward growth in the Sultanate.
Organised by Oman Economic Review (OER), the Sultanate’s premium and must read business magazine, and attended by who’s who of Oman’s corporate sector including CEO’s, senior executives and business leaders, the main theme of OER Business Summit 2017 was ‘Paradigm Shift: Thinking beyond oil.’ HE Talal Al Rahbi, Deputy Secretary General, Supreme Council for Planning was the chief guest and HE Rashid Ahmed Al Shamsi, Vice President, Majlis Al Shura, the guest of honour at the Summit held at Sheraton Oman.
PDO, the leading oil and gas exploration and production company, Oman Oil company, a commercial company wholly owned by the government of the Sultanate, Omantel, the pioneer of total communications in the Sultanate, Al Jenaibi International Automobiles LLC, the exclusive importer for BMW, Port of Duqm and Areej Vegetable Oils and Derivatives were the strategic partners of OER Business Summit 2017. Bank Sohar, Oman Cables Industry, Taageer Finance, OCTAL, LuLu Exchange Holdings and National Training Institute were the support partners, while Business International Group (BIG), the Light and Sound partner. Oman Air, the national airline of Oman was the official airline. .Times of Oman, Al Shabiba and Bloomberg Businessweek-Middle East, were the Media Partners and Oman Printers & Stationers, the Print Partner.
Raoul Restucci, managing director, Petroleum Development Oman, in his keynote address said, “We do live in challenging times. Never waste a crisis; seize the opportunities to work together to create a more dynamic and more creative national economy. The opportunities are in front of us and we have shown in PDO and any other companies represented here today that we can do it and we can step up.”
“As the global energy requirement is growing significantly, there will still be strong demand for oil. But as many analysts suggest oil prices will be under considerable pressure, due to the ongoing renewable energy revolutions. Five years from now, when you fly over Muscat, 50 per cent of homes may well have solar panels installed. There is a rising exponential drive to secure new energy sources and there is a step change in the technologies and the storage of batteries. The transition train is well underway. We cannot stop it.”
Referring to Oman’s downgrading by international credit agencies, he said, “Major credit rating agencies around the world have downgraded Oman’s credit rating. The more concerning is the negative outlook. Bankers and lenders are willing to inject more capital, if they see the light at the end of the tunnel. At this stage, the business plans does not show light at the end of the tunnel. Therefore, we need to be more creative and more engaging.”
Restucci further added that beyond financial challenges and ratings, the biggest threat for diversification was job creation. “Every year, 50,000 or more Omanis, many of whom are well educated, hit the job market with difficult prospects. We have to take that as a serious challenge and really work together to find out the opportunities.”
“Private sector needs to step up and really make a difference on job creation and Omanisation. The days of quality jobs in the public and government sectors are things of the past. And in fact, the government needs to seriously look at repositioning and reducing its workforce, because it is only through longer term economic sustainability, we can continue diversification,” he added.
Collaborative efforts is the way ahead in the current economic environment and added that diversification is the key to growth. As a socially responsible organisation, PDO has taken up the task to create 50,000 jobs in the non-oil sector and has signed 15 MOUs with several public and private entities, he said.
Khalid Ansari of KPMG in his presentation on ‘Thinking beyond oil: Challenges for growth,” said agriculture and fisheries, logistics, manufacturing, tourism, mining and minerals, which have been identified as key sectors by the government has huge potential. Opportunities are huge especially in the tourism sector and the Sultanate should make use of them Apart from the sun, sea and sand, Oman has something more – desert, mountains, culture and history. If 2 million people transiting through Muscat International Airport spend two to three days in Oman and spend $1,000 per head, the total spent will be $2 bn – the multiplier effect could be five times i.e. $10 bn. The Sultanate needs to ease the visa process for tourists. “We need to break the silo syndrome for the development of tourism sector,” he added.
Fabio Scacciavillani, chief economist and member of the Investment Committee, Oman Investment Fund in his presentation on – ‘State of Oman’s Economy,’ said the oil price drop in the GCC is a wake-up call over the future economic prospects spurring a sense of urgency over the long term strategy. Even if oil rebounds to $80 or 90 per barrel, the demographic trend means that the oil revenues will not be sufficient to ensure a comfortable life for all citizens.
Nima Abu Wardeh, former presenter of BBC’s Middle East Business Report moderated the two panel discussions on Sunshine sectors: Lynchpins of future growth and Public Private Partnership – Private sector as an equal stake partner in development.
Participants in the first panel discussion on sunshine sectors: Lynchpins of future growth, that included Reggy Vermeulen, CEO, Port of Duqm; Dean Cunningham, CEO, Kunooz Holding, Mohammed Mubarak Al-Shikely, Vice President Marketing, Oman Air, Fadi Nasser, Head of ICT, Omantel, Pascal Cange – Director, Legal and Corporate Affairs, OCTAL, Ashok Hariharan, Head of Tax, KPMG in Lower Gulf and Lee Chee Khian, CEO, Duqm Special Economic Zone Authority (SEZAD), opined that Sultanate offered numerous opportunities in diverse sectors. Reggy said all the ports in Oman are working together in synergy. Mohammed Al-Shikely said the ministry of tourism has for the first time unveiled a tourism strategy. The strategy is to develop tourism clusters within the destination. Fadi said public and the private sectors should work in harmony to spur growth. “Communication is key,” said Ashok Hariharan and added that tax and VAT rules should be communicated much in advance. Dean Cunningham opined that “Understanding what the market and customer needs is important.” The panelists said that it was imperative to disseminate information and added that stakeholders should be included in the decision making.
The second panel discussion on public private partnership: private sector as an equal stake partner in development featured Pankaj Khimji, Director, Khimji Ramdas, Shahswar al Balushi, CEO, Oman Society of Contractors, Qais al Zakwani, Executive Director, Authority for Electricity Regulation, Hatem Al Shanfari, Chairman, GBCM and noted Economist and Srinivasa Rao Edupall, Unit Head, Project Finance and Syndication Department, Bank Sohar.
Pankaj said one of the biggest things that define public-private partnerships is trust. However, the element of ‘trust’ is missing in public-private partnerships and added that rules and regulations should be made crystal clear to enhance private sector participation. The government has to don the role of an enabler and should leave a number of sectors for the private sector to operate. Shahswar said the construction sector, which is the largest employer is going through tough and challenging times. A strong construction sector is needed for the growth and development of the country. Projects are dwindling and many firms have been unable to pay salaries to their employees. The society, he said is presently looking at two major projects that will open up business opportunities for contractors. The sector will go out and look for funding, he added.
Hatem Al Shanfari said the success of the public private partnerships in water and power sector should be replicated in other sectors as well.
Qais al Zakwani said a mindset change is required to get the system forward. “We need to push the boundaries.” Srinivasa Rao said banks are well-regulated and added that whatever pressure it is getting from the market, it is being passed on to the customers.
Others who made presentations included Jalal Al Lawati, promotion manager, Duqm Special Economic Zone Authority (SEZAD) on the prospects and opportunities at SEZAD, Mohamed Nayaz, Partner, EY on “Cyber security threat and how companies can secure themselves against such threats,’ Dr. Philip Boigner, CEO, Innovation Development Oman on ‘IDO’s initiatives and fostering innovation in Oman’ and Ali Abdulaziz CEO, Woufra Capital on ‘The Exponential Age’