MUSCAT : A senior official at the Oman Chamber of Commerce and Industry (OCCI) said challenges facing companies in Oman should not be viewed as a widespread economic crisis, stressing that business performance naturally varies between firms achieving growth and others struggling with operational and market pressures.

Sheikh Rashid bin Amer Al Musalhi, First Deputy Chairman of OCCI, said in an interview that while some businesses face difficulties linked to sector conditions, competition, or internal management, the broader economic environment in Oman continues to show signs of investment activity and business expansion.

His comments came after OCCI launched a rapid assessment survey last week to evaluate the impact of the regional crisis on employers, in cooperation with the Federation of GCC Chambers and the International Labour Organization.

Al Musalhi said the increasing number of companies and establishments registered annually in Oman reflects a generally supportive investment climate and continued economic activity across the Sultanate.

He noted that business challenges differ from one company to another depending on sector, company size, operational model, and management capability. Some firms, he said, struggle due to intense market competition, unrealistic revenue expectations, weak feasibility studies, or administrative and marketing shortcomings.

“Private sector investment requires accurate market analysis, awareness of competitors and external risks, and flexible management systems capable of adapting to economic and regulatory changes,” Al Musalhi said.

He said small and medium-sized enterprises (SMEs) remain among the most vulnerable to pricing pressure and competition from larger firms with stronger financial and operational capacities.

According to Al Musalhi, some SMEs are forced to exit the market because they cannot compete in highly saturated sectors or withstand aggressive pricing strategies. However, he stressed that competition alone is not responsible for business failures.

He added that weak administrative structures, lack of realistic planning, and the absence of clear operational and marketing strategies also contribute to the difficulties faced by smaller businesses.

Addressing payment delays, Al Musalhi described receivables and cash-flow management as one of the most complex challenges facing subcontractors and SMEs working on projects linked to larger companies and government contracts.

He said many contracts are tied to project completion milestones, leading to delayed payments and financial pressure on smaller firms, which can affect their ability to cover salaries and operational expenses.

“These challenges affect SMEs more significantly because of limited liquidity and financial reserves,” he said.

Al Musalhi also identified talent retention and high employee turnover as major concerns for private sector companies, particularly as competition for skilled workers increases between private firms, government entities, and state-owned enterprises.

He said the issue is not unique to Oman but reflects a global trend, especially in technology, management, and specialised sectors.

Artificial intelligence and technological advancement could help ease some workforce pressures in the future by improving efficiency in administrative, accounting, and operational functions, he added.

Al Musalhi acknowledged that some sectors in Oman are experiencing market saturation as investors continue to concentrate on lower-risk businesses with faster returns, often replicating successful projects without sufficient market analysis or long-term planning.

“This creates overcrowding in certain sectors while other important economic activities remain underserved,” he said.

On government support for SMEs, Al Musalhi said various public institutions continue to provide financing, training, and technical assistance to entrepreneurs and smaller businesses, but called for stronger coordination among support entities.

He also urged greater indirect support through facilitating partnerships between SMEs and large government-linked or private companies to strengthen economic integration.

Citing Japan as an example, Al Musalhi said sustainable economic growth depends on creating stronger linkages between large corporations and smaller enterprises.

He added that many large Omani companies had demonstrated resilience during recent economic shocks, including the COVID-19 pandemic, and were able to recover profitability and restore normal operations.

“The current phase requires companies to develop clear strategies, alternative plans, and structured development programmes to manage future economic shifts more efficiently,” he said, adding that adapting to rapid technological change and artificial intelligence would be essential for long-term competitiveness.

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