Next to some of its Middle Eastern neighbors, Oman at first glance appears an unlikely contender in the entrepreneurial stakes. But on closer inspection, the Sultanate, renowned for its heritage and natural beauty, is worthy of a second look. In a list of 22 MENA countries—which also includes Iran and Malta in this instance—the World Bank’s Doing Business 2015 research ranks Oman, with Muscat the point of reference, a respectable sixth in terms of the ease of conducting business.
Nestled between Tunisia in fifth place and Morocco in seventh, Oman is proving a solid player across the ten criteria that range from starting a business to enforcing contracts. But it is in the area of registering property that the Sultanate excels, ranking third in the region, behind the UAE in first place and Bahrain in second.
The statistics, however, belie a worrying development. While Oman’s position points to a regulatory environment that is as welcoming as its famously friendly inhabitants, comparisons with years gone by present cause for concern. The Sultanate’s economy may be experiencing continued—yet muted—growth, with GDP forecast to rise to $81.64 billion next year up from $80.54 billion in 2014 according to IMF estimates, the nation of 3.63 million people has slipped down the Doing Business scale on almost all counts this year.
Globally, the Doing Business ranking compares a total of 189 economies benchmarked to June 2014, with Oman in 66th spot this year overall, down from 60th the year before. Amongst the forces weighing down on the country’s standing are the challenges of setting up shop, which translate to a six place decline, from 117th to 123rd, for starting a business specifically. Hooking up to electricity, accessing credit and protecting minority investors have proved challenging of late too, with the country dropping seven, five and four places, respectively on the global stage.
World Bank: Doing Business
The statistics add weight to the frustrations of Oman’s budding business minds over the state of its entrepreneurial landscape. “Life as an entrepreneur isn’t easy, not least in Oman—the market of two ‘S’s: slow and small,” says Qais Al Khonji, Omani entrepreneur and Chairman of Genesis Projects and Investments. “Completing an order from start to finish is a long process and often has significant cost implications for business owners,” he adds. Meanwhile, the country’s size presents other obstacles. “Muscat is way too small for many businesses to take off, sustain themselves and grow. In a city of around 800,000 people, and with competition high, it is not easy to stand on your own two feet unless you have a very unique idea,” he asserts.
The entrepreneurial climate by all accounts is tough, but on the bright side, Oman has jumped one place on the construction permit front to 49th globally this year, while the country’s contract enforcement landscape remains the same, landing it in 130th place for the second year. And while the country’s Doing Business status has suffered a blow over the past 12 months, a little perspective can go a long way. Despite a small population and weak oil prices, which place the petroleum-fueled economy under pressure, the Sultanate of Oman still resides in the top half of the global table and counts as one of the top ten countries to do business in the MENA region. There is work to be done to be done, but as the country embarks on broad schemes of economic diversification with tourism and transport at the top of the national agenda, with a little help, it may yet earn its place amongst the world’s entrepreneurial elite.