Oil Revenue Shocks and the Growth of the Non-Oil Sector in an Oil-Dependent Economy: The Case of Oman

Al-Abri, Ibtisam; Önel, Gülcan; Grogan, Kelly A.

doi:10.4236/tel.2019.94052

Cited by 12 publications

(8 citation statements)

References 35 publications

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“…Since the GCC countries are oil-exporting and relatively small states that heavily rely on the hydrocarbon sector which is mostly owned by the government. Private non-hydrocarbon sector in this region does not seem to be a viable contributor to total productivity, and therefore economic growth (Al Abri et al, 2019). Moreover, some GCC countries have undertaken fiscal reforms that damaged the performance of private non-hydrocarbon sector such as increasing wages of the public sector jobs which led to a sudden shift of workers from private to public sector.…”

Section: Resultsmentioning

confidence: 99%

“…In addition, this region is not sufficiently studied in the literature as oil-rich counties are not usually "poolable" with other countries when empirically studying the economic variables and growth (Esfahani et al, 2014). Oil-abundant countries have distinct economic structures that necessitate a special consideration in economic-related empirical investigations (Al Abri et al, 2019). This study considers the region's unique characteristics while exploring the dynamic relationships between productivity and institutional quality indicators.…”

Section: Introductionmentioning

confidence: 99%

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The Role of Institutional Quality in Economic Efficiency in the GCC Countries

Abri¹,

Bulushi²

2022

TEL

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Advancements in productivity throughout history led to continuous improvements in standards of living; ultimately if current generations had not known more than their ancestors, their standards of living would not have been very different from their ancestors. Respectively, long term economic growth and development are largely dependent on understanding the sources of productivity. Recent literature has identified institutional quality as a significant factor in explaining different productivity levels across countries; therefore, this study provides insight from the Gulf Cooperation Council (GCC) region which has not been previously explored in this context. The main objective of this study is to investigate the association between institutional quality and economic growth for a developing high-income region with a distinct economic structure. The study also determines the total factor productivity (TFP) for Oman using the Solow model. Findings suggest different dimensions of institutional quality have a heterogeneous impact on productivity, while the indicator on contract enforcement and property rights had a positive impact on productivity, the indicator on regulatory quality had a negative effect. Ultimately, these findings provide a guide to policymakers in the GCC on factors that promote growth and those that hinder it.

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Role of Institutional Quality in Economic Efficiency in the GCC Countries

Abri¹,

Bulushi²

2022

TEL

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“…To stabilize the revenue in rapidly changing oil prices in the international oil market Oman has to enhance its production facilities (Hakro and Omezzine, 2016). Therefore, investment in fixed assets around the oil industry hinders the development of the non-oil sector (Hasanov et al, 2017;Al-Abri et al, 2019). The short-run coefficients of economic growth are statistically insignificant, which implies that in short-run economic growth does not affect the trade diversification.…”

Section: Resultsmentioning

confidence: 99%

Does financial system development, capital formation and economic growth induces trade diversification?

Amjed¹,

Shah

2021

JED

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PurposeThe purpose of this study is to investigate long-run and short-run relationships between trade diversification, financial system development, capital formation and economic growth.Design/methodology/approachARDL estimation approach is applied to analyze long-run and short-run relationships between the financial system development, capital formation, economic growth and trade diversification in case of the Sultanate of Oman over the period 39 years starting from 1979 till 2017.FindingsThe results show that financial system development and economic growth has a positive impact on trade diversification in the short-run and long-run. However, capital formation has a negative impact on trade diversification in the short run and long run. The negative relationship between trade diversification and capital formation implies that over the period of study, the investment in capital goods was made to enhance the production capacity of the oil sector to maximize revenue.Research limitations/implicationsThis research is limited to analyze long-run and short-run relationship between the financial system development, capital formation and economic growth and trade diversification in case of Sultanate of Oman.Practical implicationsTo achieve the diversification goal, the policymakers need to formulate policies to strengthen the financial system and invest in infrastructure development to promote the non-oil sector. The research findings of this study will provide insights to the policymakers to formulate an effective diversification policy.Originality/valueThis research contributes to the existing literature by providing empirical evidence of the short-run and long-run analysis of the selected variables in the context of an oil-dependent country.

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“…Already in 2007, 87% of the HH secured their income through pension payments, a share increasing to 98% in 2018. While this development reflects an ageing village population, it also indicates massive buildup of the government-sponsored tertiary sector [ 42 ] with its advantages for individuals and families and high burden for public finances [ 43 , 44 ]. This notion is further supported by the fact that the share of HH with members involved in private sector businesses increased from 3% to 15% during the 11-year study period as a consequence of the successful development of government-supported small-scale entrepreneurship [ 43 ].…”

Section: Discussionmentioning

confidence: 99%

Showcasing the multifaceted aspects of agricultural transformation: The example of mountain oases in Oman

et al. 2022

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In the Anthropocene the consequences of land-use transformation on ecosystem services are of growing concern, particularly in fragile areas of mountain agriculture that often represent high nature-value farmland. This study uses a decadal repeated survey approach to analyse the effects of modernisation on oasis systems in the Jabal Al Akhdar region of northern Oman. This rugged mountain region at the north-eastern tip of the Arabian Peninsula experiences a growing influx of regional and international tourists since the opening of a modern highway 15 years ago. In 2007, at the onset of transformation processes, a survey was conducted with all households (HH) located in three major settlements along the 1000-m-altitude gradient of the Wadi Muaydin watershed. The survey was repeated in 2018, including all remaining HH of the three settlements. This longitudinal approach allowed studying the consequences of social-ecological transformation processes on crop and livestock husbandry, agricultural labour use, product marketing, and perception of the region’s future by its local residents. Though the village inhabitants are aging and declining in numbers, they still adhere to agriculture, largely because of tradition and identity. Fallowing and abandoning farmland increased over the investigated time span but was paralleled by increased application of agrochemicals and animal manure on fields, purchase of roughage and concentrate feeds for small ruminants, concentration on cash crop and meat production for sale, and increased employment of migrant workers. These indicators of modernisation of oasis agriculture are accompanied by predominantly pessimistic views on future prospects of oasis farming. Commonly perceived problems are shortage of irrigation water and profound societal change. Against these challenges, value chain generation and direct marketing opportunities for local agricultural produce are seen as prerequisites to keep the high nature-value farmland of these mountain oases alive.

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Oil Revenue Shocks and the Growth of the Non-Oil Sector in an Oil-Dependent Economy: The Case of Oman

Cited by 12 publications

References 35 publications

The Role of Institutional Quality in Economic Efficiency in the GCC Countries

The Role of Institutional Quality in Economic Efficiency in the GCC Countries

Does financial system development, capital formation and economic growth induces trade diversification?

Showcasing the multifaceted aspects of agricultural transformation: The example of mountain oases in Oman

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