Swot Analysis Of Country Oman Finance Essay

Swot Analysis Of Country Oman Finance EssayThe UAE has achieved stable progress e very(prenominal) last(predicate) over the past trine decades to emerge as a important global player in both thepolitical and the economic position The tremendously fast rate of economic growth until 2008 was due to the uniform demandfor oil, in step-up they a move their focus to a number of non-oil sectors. The UAE had maintains a dynamic political ties up with over60 countries, generally in Europe and Asia. The UAE is get byed to be one of the fore nearly political forces in the MiddleEast and is a member of a number of regional organizations, including the disconnectedness Cooperation Council (GCC), the Arabunion and the Organization of the Islamic Conference.Under the control of former President Sheikh Zayed, the UAE transformed from a nation of large-scale povertyto a highly developed and wealthy country. With the death of Zayed in 2004, his son, Sheikh Khalifa, immediately tookover as presi dent. Although the governance structure in the UAE is not democratic, both Zayed and Khalifa stool give birth the responsibility of retain the countrys developing. The government has constantly received appreciationfor its efforts to creating transaction opportunities in Oman. The countrys value rule is besides considered amongthe best in the world for professiones. The UAE mart is capable to with a well-built telecommunication network and, as aresult, the countrys IT market is slowly becoming competitive. However, the level of science education remains low. Thecountry has a strong integrated environmental development program. Its ecological procedures ar integrated with theEnvironmental Impact Assessment (EIA) program, which is part of business practice in the UAE.PESTEL psychoanalysis OF OMAN COUNTRYhttp//www.free-power-point-templates.com/articles/wp-content/uploads/2012/08/pest-diagram-ppt-template-543450.jpg(Sources www.google.com)INTRODUCTIONPESTEL stands for governm ental, Economical, Social, Technological, Environmental and heavy. It is riding habitd to describe an analysis that determines the opportunities and risks of global growth. It is alike termed as a PEST or PESTLE analysis.Political, Economical, Social, Technological, Environmental and Legal issues differ from one country to another. As a union looks to influence the advantages that the democratization of technology, information and finance, and grow beyond the national borders that previously controlled them, it is necessary that they consider a PESTEL analysis to accompany their tog up analysis.The PESTEL analysis provides a strong outline which is used by global and multinational firm to set the symbolise to develop specific strategy to ease the risks refer in carry out their vision in new environments.This PEST country analysis field of study on Oman provides a holistic view of the country, with understanding analysis of current and future issues, supplemented with signifi cant quantitative data to support trend analysis.FEATURES AND BENEFITS pastime ar benefit that business will gain if they implement pestle analysis in their platformning processUseful to know political environmentIt is adjuvant to understand the political system in Oman through examination of key factors in the country and governance indicators.Useful to know economic situationIt is utile to understand the economic situation in Oman through a balanced evaluation of core macro instructioneconomic matter.Useful to know demographics analysisTo understand the client demographics in Oman through analysis of income distribution and the rural-urban split, as well as healthc atomic number 18 and education.Use to evaluate technology advancementIt is use to evaluate the proficient background in Oman through analysis of related laws and policies, as well as patent data.Useful for controlling changesBy making effective use of PEST Analysis, it makes sure that it has united positively with the forces of change that be affecting the world. Good use of PEST Analysis helps to avoid taking action that is meant to hardship for reasons beyond control.Helpful to know or so new country or regionPEST is useful when we argon start operating in a new country or region. Use of PEST Analysis helps to break free of lifeless assumptions, and helps to quickly adapt the veritableity of the new environment.HIGHLIGHTSThe political decorate section discusses the evolution of the political scenario in Oman, as well as the countrys economic, social, outside(prenominal), and defence policies. The section also discusses the countrys performance according to World Bank political science Indicators.The economic landscape section outlines the evolution of Omans economy, as well as the countrys performance in footing of gross domestic product growth, composition by sector (agriculture, industry, and services), fiscal situation, international enthronement position, monetary situation, c redit disbursement, banking sector, and consumption.The social landscape section analyzes the governments social welf are policies, as well as the countrys performance in terms of healthcare, income distribution, and education.REASON TO USE PESTLE SWOT ANALYSISFollowing are the main reason for using pestle swotUseful to formulate terminusStrategic management is an essential aspect of managing modern businesses that involves forming goals and implements the programs that fulfil those goals.Useful to intact environmental scanningEnvironmental scanning is a component of strategic management where mangers study various economic, political and social factors that might affect the business.It is helpful to small business alsoIt can help small businesses to get a line intact markets and avoid costly mistakes. Small businesses can better compete by using these critical tools to assess opportunities and challenges.It is useful to manager for conducting an effective businessSWOT analysis and PESTLE analysis are two common strategic management equipment that the help managers brainstorm and organize their ideas during the environmental scanning process.It is all-encompassing wider conceptA main reason companies use both SWOT and PESTLE is because these tools offer broad and efficient analyses of key areas of a strategic plan. SWOT is an acronym that stands for strengths, weaknesses, opportunities and threats. PESTLE has wider coverage of business and external issues, including political, economic, social, technological, legal and environmental factors.POLITICAL ENVIRONMENT IN OMANhttp//www.oxberryrisk.com/Images/political_risk_analysis.jpgINTRODUCTION OF THE SECTORThe stability and structure of a countrys government gives a basis to understand future changes in the regions political environment. Policy at the local or federal level can differ significantly. Political power in Oman is dominated by sultan Qaboos ibn Said Al Said who is responsible for all major deci sion-making and government actions. Decision-making authority rests with the Sultan with share from his advisors, the appointed Majlis al-Dawla and members of Omans leading merchant families. Succession is a key risk concern. Sultan Qaboos has dedicated himself for promoting the countrys re social structure, economic diversification as well as continue political stability.A process of limited elected reform has been in progress over the last several social classs including the introduction of direct elections for members of the pleader assembly in 2000 and universal suffrage in 2003. In recent October 2007 elections, Oman records a strong 68% voter deflectout. While Oman is gradually moving previous on political liberalization efforts, the Councils role remains largely advisory.Following is the political structure of Oman countryPOLITICAL STRUCTUREMONARCHYHead of StateSultan Qaboos bin Said Al-Bu S aidCouncil of MinistersComposed ofthe Sultans AdvisorsState Council (Majlis al-D awla)57 Appointed tribal and religious leadersConsultative Council (Majlis al-Shura)84 member elected body with advisory functionsMajor PartiesIllegalLast Elections Consultative CouncilOctober 2011THE MONARCHYThe Sultan is a direct heir of Said bin Sultan, who had first opened transaction with theUnited Statesin 1833. The Sultanate is neither political parties nor governing body, although the bicameral re registerative bodies provide the government with advice. The present Sultan has no direct heir, and has not publically selected a successor. Instead, the ruling family should generally select a new Sultan by and by his death. If they do not select a new ruler after iii days, then they open a letter left to them by the late Sultan, containing a proposal for a new Sultan.Current Sultan of Oman, highness SultanQaboosbin Said Al Bu Said holds an unexpected amount of power. Along with his position as Sultan, he is prime subgenus Pastor, defence minister, finance minister, unusual a ffairs minister and chair of the central bank. Moreover, Qaboos has only a few family members in his cabinet and the offices they hold are considered quite powerless. His cousin Hay him for example, is minister of national legacy and culture while his uncle, Shabib is special advisor for environmental affairs. This style of control has suggestion as none of his family members deem gained the necessary managerial skills to rule Oman after Qaboos death.JUDICIAL SYSTEMThe court system in Oman is regulated by Royal Decree 90/99. There are three court levels in Oman the Elementary Court is the lowest court, followed by the Court of Appeal, and then the Supreme Court as the highest court in the country. In addition to this there is an Administrative Court that looks into cases made against the government.GOVERNMENT ATTITUDE TOWARDS FDIThe government keenly support irrelevant direct aimment funds into the country to increased employment opportunities for Omanis. Omanisation allowance ar e currently in force for six industries in the private sector, i.e. the transport, storage and communications sector at 60%,finance, insurance and real estate at 45% and industry at 35%. Authorities created the Omani Centre for Investment Promotion and Export Development (OCIPED) in 1997 with the begin of providing unlike investors with a one-stop-shop for licensing and registration procedures. Judicial transformation is in progress and the court system is considered largely fair. Corruption level are low by regional standards and do not act as a significant obstacle to foreign investment.LAND OWNERSHIPIn Oman the regulation for land are expected to be less because the minister wants to increases the opportunity for tourism. The Ministry of Housing, Electri urban center and Water whitethorn grant permission to a company or a foreign national the Right to use a certain property for trading operations that promote the economic development of Oman.INCENTIVESGovernment incentives to promote local and foreign investment include tax income exemptions the provision of industrial plots in industrial zones for nominal charges preference in the allocation of government land provoke-free or subsidized loans with long-dated terms for repayment reduced charges for water, electricity and fuel financial assistance for the development of economic and good possibility studies and the accelerate arrangement of immigration visas and permits for foreign workers.GOVERNMENT REGULATIONS AND POLICIESA foreign national desire to engage in a trade or business in Oman or to acquire an interest in the capital of an Omani company must obtain a license from the Ministry of Commerce and Industry. In general, the ministry grants a license if the paid-up capital of the Omani company in which the investment is made is at least Rs 150,000 (US$ 390,000) and if the foreign self-possession of the company does not exceed 49%. The Social Security legal philosophy requires private-sector empl oyers and their Omani employees to pay monthly parcels to an insurance fund for old age, disability and death benefits. Oman does not impose personal income tax. Income tax is levied on people that are wholly owned by Omani nationals, entities with foreign participation, branches of foreign companies and Omani fillet of sole proprietorships. All companies in incarnated in Oman irrespective of the extent of foreign ownership and branches of companies registered in the other member states of the disjunction Co-operation Council (Bahrain, Qatar, Kuwait, Saudi Arabia and the United Arab Emirates) are taxed at a rate of 12%, for income exceeding RO 30,000. A single tax rate applies to branches of foreign companies, at rates ranging from 0% to 30%. Petroleum companies are subject to tax under specific provisions and rates. Omani sole proprietorships are taxed at a rate of 12%.The Omani Labour Law requires employers to pay end-of-service benefits to expatriate employees.FOREIGN INVESTMEN TWith the exemption of certain restrictions on the foreign-currency holdings ofcommercial banks, Oman does not impose exchange controls. In general, Oman does not restrict the transfer of funds overseas of equity or debt capital, interest, dividends, branch profits, royalties, management and technical service fees, and personal savings.RESTRICTIONS ON FOREIGN INVESTMENTThe Foreign Capital Investment Law (Royal Decree No. 102 of 1994) governs foreign investment in Oman. If the foreign body want to invest in Omani companies they must file applications for licenses with the Ministry ofCommerce and Industry. The ministry grants licenses to applicants if both of the following conditions apply The paid-up capital of the Omani company in which the investment is made is at least Rs.1, 50, 000(US$390,000). The foreign ownership of the company does not exceed 49%.The Ministry may exempt the following entities from the licensing conditions Companies conducting business through special contrac ts or agreements with the government Companies established by Royal Decree and Parties conducting a business that the Council of Ministers declares necessary to the country.TAX EXEMPTIONSIn Oman tax is exempted from corporate tax and customs duty which may be granted by the Ministry of Finance. From the following activities tax is exempted such as manufacturing, mining, agriculture, fishing, fish farming, fish processing, aquaculture, animal breeding, tourism, the trade of manufactured and reprocessed products, operation of colleges, universities, and higher education institutes, private schools, training institutes, private hospitals and public utilities. Exemptions are granted for five year finales effective from the date when toil begins or services are first rendered a five year extension may be granted. .Management agreements and construction contracts do not qualify for tax exemptions. Companies engaged in the activities listed above may also obtain an exemption from the pa yment of customs duty on exports and on imports of equipment, spare parts and altogether materials.IMPORTINGThe import of goods into Oman requires an import license. The import ofcertain classes of goods, including alcohol, firearms and explosives, requires a special import license. Goods entering Oman must have certificates of origin. Oman follows Arab boycott rules, which forbid the import of goods originating from Israel.EXPORTSOman does not restrict exports. However, the export of items of historical value requires an export license.CUSTOMS DUTIESIn Oman most imported goods are subject to pay customs duty at a flat rate of 5% on their cost-insurance freight (CIF) value. Consumer goods, including food substance are exempt from customs duty whereas alcohol and tobacco are subject to pay higher rates of duty. Goods produced within the GCC generally may be imported duty-free. In certain circumstances, Oman may allow the contractors to import duty-free equipment and materials for us e the on government, PDO and OLNG projects. Since from 2005 Oman has entered into a Free Trade Agreement with the United States ofAmerica.POWER ON THE TOURISM SECTORThe government promote foreign ploughshare to develop the country tourism industry. Since the mid-1980s, the government has gradually opened its desert, mountains and coastlines to foreign tourists and the Ministry of tourism has share part in various international tourism exhibitions to maintain Oman to the world tourist trade. Due to recent changes made in visa a regulation that had increases arrival of a large number of populations which in turn are likely to increase the flow oftourists in Oman. Due to the development of internationalist Airport which increase the tourist probable of the country. A new Tourism Ministry was set up in 2004 to provide push to this sector. The Ministry of Tourism has free provisional tourist arrivals figures for 2011. These showed a slight decline of 1.8% in arrivals over the year to 1,427,611. In light of this to some extent unsatisfactory figure, BMI has change down its predict for tourist arrivals in 2012, believe that an increase of 10% is now the most likely outcome for the year, down from 15% previously. BMIs predict is in line with the governments outlook for the industry.ECONOMIC ENVIRONMENThttp//t2.gstatic.com/images?q=tbnANd9GcQnKP8I_IH7yqQSamEgMPjoj-OcN1qkxFY8WKYN5xiM_sYx59qBHwTwJjP3(Sources www.google.com)INTRODUCTION OF THE SECTOROmans economy is based mainly on petroleum and natural waste. With limited energy reserves, Oman has decided to expand its economy away from oil and splash production. The Oman Vision 2020 development plan highlighted the rent for the Omani economy to expand its economy through a process ofindustrialization and privatization. The main single industrial investment target is the port city of Sohar, near the UAE border. The government has direct with several main privatization programs, including power generation projects, and other power and water generation plan. Oman expects to triple the industrys one percent contribution to GDP and finally create over 1, 14,000 tourism-related jobs. Besides these the government had built a second airstrip and new entrepot at Muscat International Airport by 2011.The government is also in the procedure of expanding its privatization efforts to its wastewater and solid waste management operation. In addition to this the Omanis aggressively marketing itself as a enchanting, environmentally aware tourist goal. The Omani government is developing a port at Duqm, an evenly populated area along the Arabian Sea. This strategy call for the construction of a dry dock facility, oil refinery, petrochemicals complex and fish processing centre to ultimately fight with Dubais Jebel Ali port complex. The Duqm development plan also calls for the construction of an airport to facilitate passenger and cargo shipments and a three-hotel tourism resort complex.MACRO ECONOMIC DATAFollo wing is the macro data of Oman country.YEAR2005200620072008200920102011GDPNormal GDP309.536,8044,19860,29946,11556,25161,840Real GDP4.05.56.812.82.03.63.8Origin of GDPAgriculture-2.9-4.64.60.51.51.61.6Industry5.6-1.73.611.90.33.83.9Services6.712.29.51.31.23.43.7Population incomePopulation2.52.62.72.93.23.33.4GDP per head20,39621,63922,36024,62922,96023,15123,440Fiscal indicatorsGovt. Indicators38.035.236.732.938.136.334.0Govt. Expenditure35.434.936.532.641.937.135.0Govt. Balance2.50.30.20.4(3.8)(0.8)(1.0)Net public debt4.93.83.12.55.54.54.1Prices financial indicatorsConsumer prices (average, %)N/AN/AN/AN/AN/AN/AN/ALending interest rate (average %)7.17.47.37.17.46.86.9(Sources GCC construction fact sheet)GROWTH ordinateGROWTH RATEAMOUNTGDP ( APPROX)$59.946billionPERCAPITA GDP (APPROX.)$21,646REAL GDP GROWTH RATE (APPROX.)7.8%The government is looking to expand the economy beyond the hydrocarbon sector, which still account for about 75% of export earnings, given the limited sector possible to force and maintain growth beyond 2020. Foreign investment maintain of natural gas projects, along with the government investments will sustain growth. Oil prices natural gas represents a small proportion of GDP and export revenues. To this end, the government is shifting its plan to aim renewable energy as a key developmental goal with hope that it will contributeabout 30% of GDP by 2020.PURCHASING POWERGimages omanOman-50Rials-f.jpg(Sources www.google.com)The inflation rate for the year ended 2010 was about 4%. This was the outcome of declining crude oil prices. The oil and natural gas being the core business ofOmanis it play an important role in determine the per capita income and their purchasing power. However, the situation is changing. There is gradual boom in the per capita income.The period of rapid growth has come to an end, and in the absence of a sharp recovery in oil prices Oman looks set to grow in the 3-4% range over the coming 5-10 years. The cost of liv ing in Oman is high as most of the goods are imported.MINERAL RESOURCEShttp//www.omanet.om/arabic/economic/images/9-9.jpgOmans mineral resources include chromite, dolomite, zinc, limestone, gypsum, silicon, copper, gold, cobalt, and iron. Several industries have grown up around them as part of the national development process which, in turn, has boosted the minerals sectors contribution to the nations GDP as well as providing jobs for Omanis. The mineral sectors operations include mining and quarrying, with several projects recently completed, including an economic feasibility study on silica ore in Wadi Buwa and Abutan in the Wusta Region, which confirmed that there were exploitable reserves of around 28 million tonnes at the two sites a feasibility study on the production of magnesium metal from dolomite ore a lottery study on processing limestone derivatives a project to produce geological maps of the Sharqiyah Region economic feasibility studies on the exploitation of gold and copper ores in the Ghaizeen area a study on raw materials in the wilayats of Duqm and Sur for use in the Sultanates cement industry and a study on the construction of a new minerals laboratory at Ghala in the Governorate of Muscat. Metkore Alloys will build a world-class 1,65,000 tonnes per annum capacity ferro chrome smelter project in Oman with an envisaged investment of $80 million.SOURCE OF FUNDS AND THEIR COSTOman commercial banks are the primary source of short, medium, and long-term credit. Because there is no restriction in obtaining credit in Oman they can also obtain credit from commercial banks in the neighbouring Gulf countries. The Oman Development Bank they grant loans to small and medium-size companies, for less than Rs.2,50,000. Investors also obtain funding from the Gulf Investment Corporation located in Kuwait which is established by the GCC, is a major financial institution whose main purpose is to invest in the equity and provide loan funding to the new companie s.SECURITIES MARKETThe Capital Market Authority in Oman is established in 1998 which regulates the securities market. Muscat Securities Market, which began its operations in 1989, over sees the flow of funds into securities and develops the local financial market. Membership in the exchange is compulsory for Omani licensed banks, specialized loan institutions, allow financial intermediaries, joint stock companies and Omani public regime whose shares are registered on the securities market. Commercial banks, joint stock investment and brokerage companies which is registered in Oman they may establish investment funds called joint investment accounts. The accounts are listed on the Muscat Securities Market and may be up to 49% foreign-owned these funds are exempt from taxation.INFRASTRUCTURE AND PHYSICAL FACILITIESThe Omani government is developing a port at Duqm, which is a less populated area along the Arabian Sea. This plans call for the construction of a dry dock facility, oil refinery, petrochemicals complex and fish processing centre to eventually fight with Dubais Jebel Ali port complex. The plan also calls for the construction of an airport to facilitate passenger and cargo shipments and a three-hotel tourism resort complex. . Oman is pore on its port infrastructure as well. Two of Omans psyche ports, Sohar and Salalah, are aggressively moving forward on expansion oftheir respective. To increases the tourism facilities the government will build a second runway and much-needed new terminal at Muscat International Airport in 2011, they also built a new taxiway at Salalah Airport in 2010, and new airports at Sohar, Ras al-Hadd, and Duqm. Oman is focusing on its port infrastructure as well. Two of Omans prime ports, Sohar and Salalah, are aggressively moving forward on expansion oftheir respective.. Oman is focusing on its port infrastructure as well.SIZE OF MARKETIn 2002, Oman attracted some 1.2 million foreign visitors about 7,00,000 came from the GCC (GULF CO-OPERTION COUNCIL) states. And of those700, 000 tourists, an overwhelming 85 percent of them came from the UAE. For all the talk in Muscat and Salalah about bringing in European tourists, the fact remains that the bulk of the sultanates visitors come from a lot closer to home- and, of those, huge numbers are simply driving across the border for a very short-term stay. Oman has so much more to offer than the other Gulf States in terms ofculture and history. Oman offers an real Arabian experience thats not easily available elsewhere in the region.TRADEhttp//www.omanet.om/arabic/economic/images/tra03.jpg(Sources www.Omannet.Om)The Omanis have been trader since ancient times. Their transport and group carried Omani goods including frankincense, dates and limes across the seas and over the old frankincense and silk routes, encourage cultural interactions with other peoples.Today, Oman is a part of a number of economic communities including the Arab Gulf Co- operation Council (AGCC), the Greater Arab Free Trade Zone, the Indian Ocean Rim Association for Regional Cooperation (IORARC) and the World Trade governing body (WTO).The Sultanate has raised its laws on investment activity and has begun One Stop Shop permission facilities along with easy, transparent procedures. There is protected coordination between the bodies and authorities involved in providing services for investors, while current progress towards the establishment of e-government have led to a growing confidence on electronic channels. Commercial laws and regulations are being modernized, including the Law on Trade Marks, Descriptions, Trade Secrets and Protection against Unfair Competition, the regulation of foreign trade representation offices, the Consumer Protection Law and the Law on the Protection of Intellectual Property. Beside these measures, the country has also raised its ports and established free trade zones in all Mazyounah and Salalah.Omani goods are exported to the markets t o world countries. Government authorities and departments give main concern to Omani products when making purchases and Omani goods are actively promoted in the local market through seminars and exhibitions.Broader promotion campaigns are also held in the regional and world markets, where Omani products have already begun to make their mark because of their high quality specifications. The Ministry of Commerce and Industry has established a certificate by the United Kingdoms Human Investment Programme, recognizing it as an investor in human resources.SOCIO-CULTURAL ENVIRONMENThttp//www.secs.unibo.it/NR/rdonlyres/3611A3BD-7B6B-4531-8AAF-181E56EBA9CE/177588/Fotolia_895776_Ometti2Cerchi.jpg(Sources www.google.com)INTRODUCTION OF THE SECTORSince Oman is a Muslim country, all the activities are influenced by the Muslim culture. The main characteristic of Omani culture is respect for others and it prevents others from letting their face down. In Oman the foreigners have to make sure that they dont make any blistering remarks in the public places. Otherwise they feel insulted and let down in the society.Language In Oman country Arabic is local language.LIFE STYLE OF THE OMANISFollowing are key factors that determine the living style of the population in Oman.CULTUREIn order to fully understand any country culture, is very important to know because it influence society whole. In Oman Islam culture is followed by every people. Oman is the Muslim country so majority of them follows Ibrahim sect it is very right culture. Islam directs every part of a Muslim life, from holidays to the food they eat to how they dress and do business. Kindness, humility and respect for others are key thought which are present in both social and professional field of life.ARTTraditional handicraft such as silver and gold jewelry, goat- and camel-hair carpet, woven baskets, water jugs, heavy weapon and khanjar, a special type of dagger etc are generally practiced in this country. Besides these, drawing, painting, photography etc are also practiced.MUSICMusic in Oman is a vital part of art. The traditional folk songs are very popular and practiced in the country. Arabic music has left a unintelligible influence in the Oman music.HealthLife expectancy at birth in Oman is raspy to be 74.47 years in 2012. As of 1999, there were an approximate 1.3 physicians and 2.2 hospital beds per 1,000 people. In 1993, 89% of the population had access to health care services. In 2000, 99% of the population had access to health care services. During the last three decades, the Oman health care system has established and account great achievements in health care services and preventive and curative medicine. In 2001, O