Middle East and Central Asia > Oman
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Oman has set digitalization as a key pillar of its economic transformation agenda—Oman Vision 2040 —, with various strategic initiatives being deployed to achieve the overarching goal of increasing the contribution of the digital economy to overall gross domestic product from its current level of about 2 percent to 10 percent by 2040. This paper: (i) takes stock of the state of digitalization in Oman, with a view of identifying areas of strength, but also pointing to gaps, notably relative to regional peers; (ii) provides an illustration of potential gains from enhanced digitalization; and (iii) highlights policy priorities that can support the authorities endeavors in advancing their digitalization agenda. The findings suggest that while Oman has progressed well on some aspects of digitalization, such as internet penetration and 4G and 5G population coverage, it still needs to deploy additional investments and efforts to match its GCC peers on several other aspects. Further efforts are particularly needed to raise internet connection speed, increase the prevalence of advanced ICT skills among the population, usher in digital innovation, and promote e-commerce. The analyses indicate that enhanced digitalization, can, in turn, engender substantial gains. Going forward, policy priorities to entrench the digital transformation and achieve its targets include further upgrading the digital infrastructure, increasing R&D spending, and expanding funding opportunities for digital start-ups and SMEs.
The transition to a vibrant economy under Oman Vision 2040 and the urgency to develop a more dynamic private sector that can absorb the entry of a young and educated labor force both stress the need to empower SMEs, which play a large role in supporting job creation and nonhydrocarbon activity in Oman. This note takes stock of the role of small and medium-sized enterprises (SMEs) in Oman, identifies past and current bottlenecks that hinder entrepreneurial dynamism, and documents recent reforms aimed at lowering the costs associated with doing business, facilitating access to finance, and enhancing the integration of SMEs into value chains. The analysis suggests that policies complementing existing initiatives, through a private sector driven credit guarantee scheme, by adapting insolvency frameworks tailored to SMEs, and supporting linkages between SMEs and multinational enterprises in Special Economic Zones (SEZs), could help maximize long-term gains to SMEs and the broader economy.
IMF Country Report No. 25/14
IMF Country Report No. 25/13