Long-termism is Oman’s biggest asset
It may not be plain sailing for the Sultanate’s construction sector at present, but if the Construction Week Oman Awards are anything to go by, the long-term future looks bright
There’s no getting away from the fact that these are tough times for the Gulf’s construction community, and the current crop of challenges – which stem largely from ongoing oil-price stagnation – have hit Oman harder than most.
Numerous obstacles are hampering progress, not least the fact that the cost of extraction in the Sultanate is higher than it is elsewhere in the GCC. As crude prices continue to wallow in the doldrums, Oman is still having to pay top dollar to retrieve the black stuff.
But it’s not the low price of oil per se that is challenging Oman’s construction sector; rather a selection of difficulties that are either the result of, or exacerbated by, reduced national revenues.
Take Omanisation as an example. In contrast to its GCC neighbours, expats account for a comparatively small 35% of the Sultanate’s resident population. Within this context, few dispute the importance of encouraging the employment of locals.
However, several sections of the private sector, including construction, have found it difficult to attract Omani nationals. Furthermore, some industry leaders have voiced concerns over the apparent mismatch between the skillsets of those entering the job market and the recruitment needs of construction outfits.
Although not directly linked to the price of oil, such challenges would be easier to stomach in a healthy economic climate. Yet it is generally accepted that the pace of construction in Oman has slowed significantly during the past 18 months. With the government rethinking its immediate priorities, the short-term future of the country’s large-scale infrastructure projects no longer seems as clear as it did before the petrodollar plummeted.
But it’s not all doom and gloom in the Sultanate. If you want proof, look no further than the Construction Week Oman Awards 2016 (page 18 onwards). Granted, an awards ceremony is likely to give a somewhat skewed view of the market; after all, finalists and winners tend – by definition – to comprise the best-performing projects, firms, and individuals. Even so, whilst current challenges were acknowledged at this year’s event, there was also a willingness to look towards future opportunities.
And in my opinion, this long-termism is Oman’s chief advantage. Other GCC states may boast more diversified economies than the Sultanate, but many of their largest projects are tied to landmark events that will take place before the mid-2020s. Yes, policy makers are devising innovative ways to prolong development beyond these milestones, but Oman is already one step ahead in this respect.
The Sultanate’s largest projects boast development periods that span decades. When Oman’s shorter-term challenges – subside – which they will – its long-term approach to construction will offer an enviable backdrop to the resultant uptick in smaller-scale building activities.