The last couple of years has been nothing short of an economic upheaval with several countries floundering under the instability caused by the COVID-19 pandemic and its aftereffects. The GCC region is not an exception either. Several countries in the GCC region faced a critical threat to their economies that was already in the rebuilding state. A disrupted supply chain, loss of employment, and undesirable relations with the neighboring countries further added to their problems. Oman has also been under the same situation although much of it has been salvaged by an active and attentive government that has launched several initiatives to enhance its economic performance.
What is interesting to notice is that Oman has actively pursued building strong relations with its neighboring countries in a bid to create a conducive cross-border trade network, something that the Sultanate believes is the way of the future. In a similar bid, Oman and Saudi Arabia have been moving closer to each other in building a co-dependent economy that will enhance trade between the two rising powers. However, Oman surely stands to benefit more as its logistics sector is on the rise and inter-country trade opportunities will further enhance its logistics performance with logistics companies and shipping companies at the helm of all these developments.
Oman and Saudi Arabia – Developing stronger trade relations
Back in 2021, Saudi Arabia and Oman officials started a trade dialogue, something that was a built up for a smoother and seamless business corridor between the two countries. With both countries facing similar challenges when it comes to economic diversification, it was no surprise that the two came together to work on a better tomorrow. Both Saudi Arabia and Oman have been over-reliant on their oil reserves driving their economy. But with the reserves drying up fast, they both want are now aggressively working towards diversifying their economies by developing other industrial sectors and this developing relationship is a step towards that. Building vibrant private sector and knowledge-based economies is something that both these countries wish to create to salvage their situation.
And these steps are definitely starting to yield results. Oman has always believed that a strong GCC region is capable of handling any economic challenge and thus has been extending its hand towards building stronger ties with several neighboring countries. As has been observed that Oman has been aggressively developing its port infrastructure, its friendship with Saudi Arabia is surely in the right direction as it will further help Oman to leverage the strategic geographical position of its port on the Arabian Peninsula to enhance its logistics prowess. The two countries signed MoUs worth USD 20 billion last year in a bid to develop different industries including tourism, finance, and technology. This is a clear indication of a growing alliance and it would be safe to say that the two countries are ready to put their past behind them and look at building a beautifully co-existing future.
What lies ahead?
Recently, Oman and Saudi Arabia came together once again to build a more sustainable future by developing their trade relations. Saudi Minister of Transport and Logistics and officials from the Government of Oman represented by the Ministry of Transport, Communications and Information Technology came together to enhance the areas of cooperation in the maritime sector for both passenger and goods transport. The meeting was crucial in terms of facilitating the movement of commercial ships, developing economic relationships, increasing the efficiency of maritime transport services and enhancing knowledge sharing through technology transfer and maritime studies and training. While these were some of the main points of the meeting, providing necessary facilities for building and maintaining ships, reducing environmental pollution, and protecting the marine environment were also some of the crucial points discussed.
The most important aspect to look at in this increasing closeness between Oman and Saudi Arabia is that both countries share a similar ideology. Both Oman and Saudi Arabia wish to work with collaborative efforts, cordial inter-country ties, a stable economic and pollical environment, and building strong trade relations for a more stable GCC region. These ideologies have enabled them to build strong political and trade ties and this stand to benefit both countries in a big way.
The new road ahead holds quite a deep meaning for these two countries. A 500-kilometer stretch of road connecting Oman and Saudi was recently opened which has reduced the driving time by 16 hours. It is being seen as the ‘New life to prosperity’ from both sides as it will strengthen their transportation and logistics industries to quite an extent. As envisioned in the 2021 meeting, the tourism and logistics industries will get a big boost with the new road while injecting a new cash flow to companies on both sides. This is quite a significant move for both countries which are looking to forge new ties and build a formidable future of co-reliance and economic diversification.
