Can Oman follow in the footsteps of its world-renowned neighbour Dubai and create an attractive business centre for investment and economic diversification? One local entrepreneur is making it his business to do so.
The words ‘Oman’ and ‘serial entrepreneur’ do not sit well together. The Sultanate basks in the glow of oil wealth and immigrants from India and Asia do much of the menial work, meaning there are fewer incentives to start a business than in Europe or the US.
The economy is small, with GDP around $80 billion and a total population less than half that of London, while the crutch of oil production means diversification of the economy has been slow to get going. Why chase the money when the money flows downhill to you?
If ‘starting a business in Oman’ sounds a bit like ‘salmon fishing in the Yemen’ it is because it doesn’t happen very often. Major foreign brands have cornered many markets and consumers are comfortable buying what they know over products created closer to home.
It isn’t exactly flush with the spirit of enterprise, but things could be changing in Oman. Oil reserves are smaller than in some of its neighbours and, like Dubai, it is taking steps to generate growth in new ways to hedge against reliance on this one commodity – albeit on a much smaller scale.
Al-Khonji: Signs of enterprise in an oil-dominated economy
The recent plunge in worldwide oil prices has underlined the need to create new industries and encourage more Omanis to test entrepreneurial waters. Even before the dip, the Sultan, Qaboos bin Said Al Said and his minsters have been investing in grand (but useful) infrastructure projects and a handful of measures to encourage start-ups.
In September 2013, for example, a royal decree extended social insurance coverage to all self-employed people, not just those running big companies. People were given a new reason to become sole traders and begin creating companies with scope to grow.
It is in this tentatively entrepreneurial economy that Qais Al-Khonji, part of a wealthy family business dynasty, is trying to make his mark as a self-made (within reason) entrepreneur.
Fighting off the temptation to take a back-seat and count the family money, he is using his income to launch start-ups from scratch and, as a result, is experiencing the same highs and lows that entrepreneurs in Europe and the US might expect; fear of starvation aside.
Al-Khonji has invested in a series of business ideas ranging from far-fetched to likely winners. Behind him is a catalogue of start-ups that never made the cut, as well as at least two that are showing real promise.
His strategy is to come up with a good idea, or have one passed to him; set up the structure of the business, do the necessary deals, buy the required equipment and then hand the day-to-day running to professional recruits.
Some of his past businesses have been consigned to the dustbin of history, including ventures into health and education tourism in India, Malaysia and Australia. But his first business, Qais United Agency (QUA), has been put on ice for a possible revival later on.
In its previous incarnation the business imported and sold Chinese water filtration systems, today Al-Khonji has a plan for the business he won’t reveal. “It might happen it might not, but it is too far off to talk about at the moment,” he says.
“I tried to reorganise myself after stopping activity with QUA and I met my current business partner in 2012 and we started a business called Genesis International. We started multiple activities under this same company. Some are still running today and some have closed down.
“The third attempt under Genesis, which has been more successful, is something called a Smart City, where you can pay your utility bills online. We are partnering with big companies and developing the business. We have a tie-up with a company in Spain and one in India, so the business is growing.”
Al-Khonji and his business partner have also set up Genesis Projects and Investments, a business providing services to the oil industry. It applies core analysis techniques to inform oil companies of the best places to drill, making the process of oil exploration and extraction more efficient and profitable.
Combined, the businesses turned-over less than $1 million in 2014, a tiny fraction of the Al-Khonji family business in which he has a board position, yet he relishes the universal freedom of decision-making that comes from starting a business from scratch.
So much so that Al-Khonji has set a path for more launches in the near future. He is quoted in the Middle Eastern media as planning one new start-up every year, and he is looking ultimately to make in-roads into US and European markets.
He is also campaigner for more support for up-and-coming business people in Oman. He wants entrepreneurial lessons taught in schools and is directly supporting young entrepreneurs through investment schemes with other prominent Omanis.
He says: “In Oman it is a very small market so if your idea is not unique enough you will be eaten by the big giants. The government promotes entrepreneurship through different programmes and initiatives but there is more to be done.
“I want entrepreneurship to be taught in schools, between grades 10 and 12 for example, it means when a child graduates they have a chance of becoming a business person.
“There are not enough home grown products and services. There are a few industry-based businesses but they are very small. I would love to see more brands from Oman. It’s a surprise to see a product made in this country, but it makes me proud when I see one that has made it to Europe or America.”
But there are barriers beyond the small market mentality and the dominance of global players. Bureaucracy is a problem too, he says. In Dubai it takes a few minutes to start a business, but in Oman the process is more convoluted, especially if planned activity requires special permissions.
When Al-Khonji set up his core analysis laboratory he needed to get a permit from the Ministry for the Environment. It took more than a month to arrive – a period of time in which salaries, rent and bills were being paid but no productive activity could take place.
If you’re still thinking Oman is a good bet for a business venture, there’s one more thing to know. Like a lot of countries in the Middle East it does not welcome foreign entrepreneurs unquestioningly (certainly not in the same way as Dubai), so investors from Europe or the US will have to jump through a few hoops first.
“It would be hard for people from Britain to start businesses and create markets in Oman,” says Al-Khonji. “They would head to Dubai because it is an open market, in Oman they are strict. They want locals to benefit as much as possible, so someone from Europe would need to go with a local partner.”
With two projects firmly underway and more in the pipeline, the future is looking bright for Al-Khonji and his emerging business empire. Ultimately, he wants to replicate the swashbuckling successes of Sir Richard Branson and be known for big deals and bold moves.
That’s all ahead of him though, and for now he is focusing on building a reputation for business in the Middle East. That, and helping Oman become a better place to do business.
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