DETERMINANTS OF FOREIGN INVESTMENTS IN THE SULTANATE OF OMAN AND THEIR IMPLICATIONS FOR SUSTAINABLE DEVELOPMENT INDICATORS: AN ANALYTICAL STUDY IN THE CONTEXT OF OMAN VISION 2040

Abstract

In compliance with the global sustainable development goals, countries heavily dependent on resources like Sultanate of Oman are purposefully using foreign direct investment (FDI) in driving economic diversification. This paper analyzes the determinants of FDI in Oman from a qualitative perspective and measures their alignment with the strategic goals adopted in Oman Vision 2040, the country’s national development plan. By means of a thorough examination of official policy documents, international reports (such as UNCTAD and World Bank), and the literature, it is found that, although Oman possesses strong traditional determinants such as political stability, sophisticated infrastructure, and modern laws and regulations, a missing strategic artillery was identified and placed as a critical gap. This gap is evident in the lack of convergence between such established ‘hard’ infrastructure advantages and the critical ‘soft’ infrastructure pre-requisites (e.g. a strong national innovation system, highly skilled labour force) necessary for attracting knowledge-intensive investments that directly contribute to sustainable development outcomes. The results indicate that there is a higher degree of alignment within the renewable energy private sector than compared with the advanced technology industry. The chapter ends by presenting strategic policy recommendations aimed at overcoming this gap and increasing Oman’s ability to use FDI as a source of transformation towards the end objectives of sustainable development as conceived in its national vision.