Transactions between Oman and Qatar increased by 1,000 percent in a single month, and 2,000 percent over three months, according to Oman’s Chamber of Commerce and Industry. The Chamber members announced a trading spike of more than OMR270m between Oman and Qatar, reported Times of Oman.
“From April to July 2017, the total amount of transactions with Qatar which were ratified by Oman Chamber of Commerce and Industry has equated to more than a quarter of a billion Omani rial,” said a Chamber of Commerce spokesman after they released the data online.
Qatar is one of the chief foreign investors in Oman business and infrastructure, having pledged OMR318m at the end of the third quarter of 2016, according to the National Centre for Statistics and Information.
In the last month, there has been an increase of 1,200 percent in the volume of trade between Oman and Qatar, which amounted to OMR215m. In addition, between April and July, Oman had seen a 2,000 per cent increase in the value of transactions with its fellow Gulf state.
The UK continues to remain the biggest foreign investor in Oman, having committed funds worth OMR2.8bn, while the UAE (OMR925m), Kuwait (OMR396m), Bahrain (OMR302.6m), India (OMR289.9m), the Netherlands (OMR230.6m), the US (OMR215.6m) and Switzerland (OMR178.2m) are also major investors in the Sultanate.
This growing exchange of goods and services between Oman and Qatar has been hailed by experts within the Sultanate.
“Given the 2,000 percent increase of trade in last three months, Oman’s economy would be benefited with free trade of goods and services coupled with higher trade exchange,” said Ramanuj Venkatesh, Assistant Accounts Manager at Larsen & Toubro.
“Another matter of importance is the shipping hub, which Qatar would like to relocate to Oman from Dubai,” he added.
“For example, a Qatar-based shipping and logistics company has relocated its regional trans-shipment hub from Dubai to Oman’s Sohar port. This brings in valuable inflow of foreign exchange which can be utilised for improving the quality of Oman’s infrastructure and civic amenities.”
The Chamber of Commerce also shed light on transactions which took place during the individual months, adding, “The most substantial benefit comes from the export of Oman-produced goods, because that is where you get more value added, but also the re-export is a boost to the Omani Logistic industry which is also, a potential benefit to the specific sector.”
Most of Oman’s exports to Qatar are sourced from Salalah Port, the only Gulf port to move up the rankings in this year’s Lloyd’s Maritime Intelligence List, as it rose 14 places to rank 44th among the world’s top 100 ports. This windfall which came Oman’s way was praised by Fabio Scacciavillani, chief strategy officer at Oman Investment Fund.
“Clearly this is a spike that reflects exceptional circumstances, it is not a typical short-term increase, but whether or not this spike has any historical precedent, it is clear that the effects might be long lasting,” he explained. “This unexpected boost for our logistic sector will provide a chance to compete more effectively with other ports in the area.
“It is a welcome boost, a substantial benefit, with profound consequences on the attractiveness of Omani transport and logistics infrastructure,” added Scacciavillani. “If the international operators find that our port provides world class services, that they offer an attractive price-quality ratio, that the facility is top of the line, this could be an element that convinces them to shift some of their opera tions from other ports to Omani ports.”
The main reason for this rise has been due to Qatar funnelling its trade through the Omani ports of Sohar and Salalah, as compared to its previous hub of Jebel Ali. Commercial transactions between Oman and Qatar spiked from 206 in June to 1,448 in July amounting to a 600% increase.
“If the recorded increase of trade with Qatar reflects an increase in the export of Omani goods to Qatar in substitution of those produced in Saudi, Egypt or UAE the benefit is broad-based because a host of Omani companies will increase their output and profits, while if it is just re-export of goods produced elsewhere the benefit to the Omani economy accrues mainly to the logistic sector,” revealed Scacciavillani.
“A food company that sells to Qatar has a direct benefit, its suppliers have an indirect benefit and the stores that sell to its employees also enjoy a so-called multiplier effect,” he added. “Ceramics, cement, building materials, laundry detergents, eggs and poultry are all products likely to be positively affected by the ‘Qatar effect’,” he added.
