Oman and UAE: fraternal bonds, strategic relations and economic partnership

The brotherly relations and strategic partnership between the Sultanate of Oman and the United Arab Emirates are seeing remarkable progress thanks to the support of His Majesty Sultan Haitham bin Tarik Al Said and His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates.

Both leaderships are keen to strengthen cooperation and push it to new levels in a way that enhances the common interests of both countries and the security, stability and prosperity of the region and the world.

The special relationship between Oman and the UAE is based on constructive cooperation, investment and the exchange of knowledge and expertise as well as the economic and trade partnerships between them.

These relations have been unique ever since the first meeting between His late Majesty Sultan Qaboos bin Said and Sheikh Zayed bin Sultan Al Nahyan. The two leaders witnessed developments in many fields and over the last five decades the principles of brotherhood and harmony have become deeply embedded.

The State visit by His Majesty Sultan Haitham bin Tarik  to the UAE on Monday and his meeting with His Highness Sheikh Mohammed is of great importance in pushing relations to the next level.

The aim of the visit is to pave the way for further progress and prosperity in all fields and to offer opportunities  for the exchange of views on regional and international developments.

Oman and the UAE are working constantly to enhance cooperation between them. The Joint Supreme Committee established between the two countries in 1991, works to enhance coordination in the economic, commercial, cultural and educational fields.

One of its goals is to link electricity and communications networks and coordinate land transport services and procedures through various border crossings, as well as boosting joint investment for the benefit of the Omani and Emirati peoples both now and in the future.

Oman's Ambassador to the UAE, Sayyid Dr Ahmed bin Hilal bin Saud Al Busaidi, said: “The visit of His Majesty the Sultan to the United Arab Emirates will reflect positively on accelerating the pace of cooperation, integration and partnership between the two brotherly countries.”

He said exchanges between the leaderships have already culminated in the signing of 16 agreements and memoranda of understanding in various fields during the last period.

In a statement to the Oman News Agency, the Ambassador said: “Economic relations between the two countries are witnessing strategic development in light of the keenness of the two leaderships to strengthen bilateral relations in all fields, especially the economy.”

He said he expected more joint investment cooperation to consolidate and develop the economic partnership between Oman and the UAE.

The Ambassador said the most important Omani investments in the UAE cover financial activities, insurance, manufacturing industries, real estate, professional and technical activities, wholesale and retail trade and information and communications.

The most important Emirati investments in Oman cover industrial, financial, banking, tourism, power generation and  real estate activities the retail trade sector and construction.

Sayyid Ahmed said the UAE was one of Oman's most important trading partners. The continuous growth in the volume of trade and investment exchange over the past years reflects the depth and strength of their existing economic partnership and its promising prospects. He said Omani exports of goods and services to the Emirates in 2023 exceeded one billion Omani Riyals, an increase of 20.4 percent compared to 2022.

The Ambassador said Oman's Embassy in the UAE was working hard to enhance economic and investment cooperation through continuous communication with the relevant government agencies, chambers of commerce and industry and investors in the UAE.

He urged them to seize investment opportunities in the Sultanate in addition to implementing the memoranda of understanding related to cultural, educational and scientific cooperation.

Figures issued by the National Centre for Statistics and Information show the volume of trade between Oman and the UAE in 2023 amounted to 5.439 billion Omani Riyals (OMR) compared to 5.571 billion OMR in 2022.

The value of Omani products exported to the UAE by the end of last year was more than 291.7 million OMR. They included metal and chemical industry products.

The value of products imported from the Emirates to Oman amounted to more than 837.7 million OMR. They included machinery, appliances and electrical equipment.

Statistics show the UAE tops the countries attracting direct Omani investments abroad (960 million OMR to the end of 2022). The total direct Emirati investments in Oman up to the end of last year amounted to 958.6 million OMR.

Oman is one of the most important markets for the UAE. It ranks third in the Arab world and tenth globally in the list of trade partners of the Emirates and accounts for 20 percent of its total trade. The ease of transporting goods and the smooth and free movement of products between the two countries through land ports are important factors in this booming trade.

The private sector plays a vital role in Oman's economic development and diversification strategy especially in manufacturing industries, logistics services, mining, fishing and tourism.

Faisal Abdullah Al Rowas, Chairman of Oman Chamber of Commerce and Industry, said: “Omani-Emirati economic relations are growing steadily, based on the commonalities between the two countries and the brotherhood that unites the two peoples. They represent a strong starting point for developing and strengthening relations that are embodied in complementary partnerships that in turn  work to enable business owners in both countries to establish more successful projects.”

In a statement to the Oman News Agency, he praised the level of trade and investment between the two countries indicating that the UAE was one of the most important partners of Oman through direct investment in areas such as manufacturing industries, real estate and rental activities, commercial projects, construction, financial intermediation and transportation and storage.

Faisal Abdullah added: “The two countries have great prospects for increasing the volume of trade and investment exchange, as the Sultanate of Oman constitutes a major gateway for UAE exports due to its strategic location overlooking open seas and close to global shipping lanes supported by a network of modern roads linking ports with land outlets.”

He said the competitive business environment in Oman enhanced economic growth and diversification in the private sector which was an attractive factor for investors and business owners.

He said Oman offers  investment opportunities in many areas including pharmaceutical industries, cosmetics, energy, real estate activities, construction and industrial equipment, the financial and banking sectors  as well as hotel and tourism projects.

The Chairman said Oman was one of the most important tourism markets for the UAE and was a major destination for Emirati tourists and residents of the UAE. He said private sector institutions were working to establish partnerships to attract more tourists from foreign markets.

Faisal Abdullah said the Omani and Emirati private sectors play a vital role in economic development and are crucial to achieve economic diversification goals. He said the Oman Chamber of Commerce and Industry was working to improve the business environment and enhance competitiveness and partnerships between the two countries.

In September 2022 the Sultanate and the UAE established Oman and Etihad Rail  as a joint company owned equally between them. It aims to design, develop and operate a railway network linking Sohar Port to the UAE national railway network. With a total project investment of USD 3 billion, the joint company will devise a plan for implementing the project, including financing mechanisms and the timetable, before it goes on to supervise the design, implementation and operation of the railway network.

This project, which will link the Wilayat of Sohar in the Governorate of North Al Batinah with the UAE capital Abu Dhabi, will raise the efficiency of the supply chain system and ease cross-border trade. It will link commercial ports and economic zones to the railway network, enhancing commercial and social connectivity between the two countries and improving the efficiency of logistics services.

The Omani and Emirati ports enjoy transport links that contribute to achieving economic benefits for both countries. The ports of Oman and the UAE also serve as a major linking gateway between the continents of Asia, Europe and Africa.

The Duqm Dry Dock, which provides marine solutions and maintenance and repair services for various types and sizes of ships, received more than 350 projects from the UAE in 2023, recording a growth of 43 percent compared to 2022.

Tourist facilities received many groups of visitors from the two countries and joint investments have contributed to attracting more.

Oman and the UAE have also strengthened cultural cooperation by organising joint events and activities. The Sultanate participated in Expo Dubai 2020 and other national occasions and events that reflect the fraternal bonds and common historical ties between the two countries.

Oman, represented by the Ministry of Culture, Sports and Youth and the Ministry of Information,takes part each year in book fairs in Abu Dhabi and Sharjah while various cultural and media institutions in the UAE participate each year in the  Muscat International Book Fair.

This is an unofficial English version of an Arabic report. To view the official Arabic text, click here.