Oman is facing significant long-term challenges with regard to the sustainability of growth, volatility, employment creation and governance, said a research report.
The country’s dependence on oil production is now threatened due to declining reserves and escalating production costs but the high oil prices have increased the fiscal space for the Omani policymakers, and the government is taking advantage of this window of economic opportunity, said the Dubai School of Government’s (DSG) Country Profiles on Oman and the Bahrain.
The Bahrain Country Profile indicated that the island nation is one of the fastest growing economies in the Arab region by virtue of its low inflation and sensible fiscal policies that complement its sound financial sector. In addition, a multitude of financial trade agreements with partners across the world have opened new doors for development.
The report also suggests that reforms to the country’s political system and labour market regulations have contributed to a restructuring of the Bahraini economy.
However, internal labour pressures and rigid market regulations continue to inhibit economic expansion.
The report recommends further diversification of trade goods and partners in order to stabilise the external sector. Continued efforts at reforming Bahrain’s labour market regulatory structure should help alleviate pressures on the labour market. Moreover, synergies between political and economic governance will greatly contribute to national wealth and future growth.