Foreign Direct Investment in GCC Countries

This assignment focuses on understanding the factors that influence Foreign Direct Investment (FDI) within the Gulf Cooperation Council (GCC) countries. It requires students to research and analyze various economic, political, and social determinants impacting FDI decisions in this region. The analysis should draw upon relevant literature and empirical evidence to provide a comprehensive understanding of the drivers and trends shaping FDI flows in GCC nations.

Running head: DISSERTATION
Dissertation
Name of the student
Name of the university
Author note

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Chapter 4
Findings and Analysis
4.0 Findings and analysis
4.1 Necessity of foreign direct investment in oil and gas sector in Oman
Oman is still a developing country and foreign direct investment (FDI) is the key
source of development of the economy of the country. Moreover, according to the Gulf
Cooperation Countries (GCC), the ability of the countries to attract foreign direct investment
can be considered as the source of political, social and economic development in the country
(Ibrahim and Abdel-Gadir 2015). The introduction of the new legal business framework has
liberalised the business environment of the country and restrictions on the foreign firms have
been reduced significantly. The changes that were made are favourable for the foreign
countries and they have the opportunity of investing in the market that is untapped. The
political and the economic stability of the country is a factor, which had attracted the
attention of large number of organizations. Manufacturing industry was mostly benefitted
from this development as the major restrictions were removed in this sector. However, the
restrictions on the natural resource industry have also been reduced significantly. This
globalization policy has been implemented by the GCC with an aim of making significant
developments in the field of economy (Eudelle and Shrestha 2017).
Oman is a country, which is rich in all its resources, but they do not possess the
advanced technology and infrastructure to make proper utilization of these resources so the

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government of the country is trying to make use of this opportunity by liberalising the foreign
investment laws in the country. Moreover, the overall climate of investment for the country is
conducive to all the major global nations. The major economies in the world have better
technology, expertise and skills, which will help the still developing nations to get a boost in
their economy (Alraja, Hammami and Al Samman 2016). The location of the country is the
ideal location for trade and most of the countries would prefer using as a source of rich oil
and gas sector. Oman uses free market in trading with other countries so that they can
capitalize of the foreign investment make improvements in the economic development of the
organization. The geographical location of the country is very appropriate and consists of
several ports at the outskirts of the Persian Gulf, which has enabled the country to be linked
easily with the continent of Asia, Africa and Europe. This is the very reason that Oman is the
country, which consists of the maximum foreign investment when compared to the other
countries in the Middle East region (Mubeen and Ravikumar 2016).
However, various studies suggested that change in the environment of business will
not have any effect on the foreign direct investment of the country. On the contrary, as stated
by Varghese, JOHN and QATROOPI (2016), the government policies of the country will
have a positive impact on the foreign direct investments as it will make the nation more
lucrative to the foreign investors. However, motivates of the investors in foreign direct
investment is still not clear and these factors may vary depending upon the sectors in the
market. The oil dominates the economy of the country and gas sector as the majority of the
revenue of the country is generated in this sector. The export of oil to other countries has
been the main source of the foreign capital generation (Abdouli and Hammami 2017). Oman
has always been biased towards the development of the local companies so they have always
discriminated with the foreign investor by making sure that impose restrictions of the foreign
companies. However, the government realised that the growth of the economy is totally

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dependent on the globalization so they reduced the amount of taxes on the foreign investors
and created a free market economy. These barriers in the economy were reduced and the
government promoted foreign direct investment, which is the main reason for revitalizing the
economy of the country. The country through a phase of national deficit and the country is
able to overcome these issues by enabling the foreign direct investment in to the country.
This has also helped the country to gain new technologies and knowledge regarding the
improvements in the infrastructure of the country (Agrawal and Sethi 2017).
During the early 90, the country was going through a phase of deficit due to the
reduction in the prices of oil and gas. As the main source of revenue, for the country is the oil
and gas sector so Oman was going through a fiscal deficit. This the time when the country
realized that in order to make improvements in the economy of the country, the government
will have to globalize the economy (Mina 2017). Thus, the government started making
policies, which will create a free market for trade. The policy of the country is based on four
essential pillars, which are business facilitation, new legal framework, promotion of the
country and liberalization of the economy. These key factors were the key reason that the
country consist of the maximum number of foreign direct investments in the Middle East.
The foreign companies are provide with the equal liberty and rights which has developed the
business environment of Oman.
The country has made efforts to promote foreign investment and have made changes
to the policies in order to make improvements in the business climate of the organization.
Moreover, the quality of life among the consumers is high and they have high disposable
income, which is favourable for all the foreign investors in the market. The workforce in the
country is highly educated and bilingual which will help in developing a workforce, which is
productive (Azad and Khatabi 2017). The government is more focused on making
improvements in the field of infrastructure and this huge investment programs started by the

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government is grabbing the attention of the foreign investors. The table and the figure gives
us the broad idea about the current economy and the influence of foreign direct investment in
the country.
Oman Trade Last Previous Highes
t
Lowest Unit
Balance of Trade 205.90 79.20 2379.00 -117.60 OMR
Million
[+]
Exports 1036.50 934.10 1992.00 423.00 OMR
Million
[+]
Imports 999.00 593.80 1392.10 242.50 OMR
Million
[+]
Current Account -
4737.00
-4155.00 3403.00 -
4737.00
OMR
Million
[+]
Current Account to
GDP
-15.40 5.10 17.84 -22.47 percent [+]
Capital Flows 1700.00 4741.00 4741.00 -
2411.00
OMR
Million
[+]
Gold Reserves 0.02 0.02 9.05 0.02 Tonnes [+]
Crude Oil Production 968.00 973.00 1057.16 693.04 BBL/D/1K [+]
Terrorism Index 0.00 0.00 0.00 0.00 [+]
Tourist Arrivals 299.00 263.00 436.00 123.00 thousand [+]
Foreign Direct
Investment
717.50 -1035.00 1281.00 -
1035.00
OMR
Million
[+]
Table 1
(Source: Alraja, Hammami and Al Samman 2016)

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Figure 1
(Source: Alraja, Hammami and Al Samman 2016)
The above data and the figure suggest that there has been significant increase in the
foreign direct investment of the country. The highest foreign investment was in the year of
2007 and maintains a steady rate afterwards. However, there was a steep decrease in the
investment in the year of 2015 due to the lack in the structural policies by the government.
However, the country has been able to recover from this crisis by making amendments to the
existing policies.
Oman Trade Last Q3/17 Q4/17 Q1/18 Q2/18 2020
Balance of Trade 206 299 102 301 299 248
Exports 1036 1018 1200 1011 1011 1680
Imports 999 782 1100 820 812 1400
Current Account -4737 -2297 -3610 -3629 -3649 -3678
Current Account to GDP -15.4 -17 -17 -15 -15 -9
Capital Flows 1700 2782 2959 3418 3878 4894
Gold Reserves 0.02 0.02 0.02 0.02 0.02 0.02
Crude Oil Production 968 977 976 976 976 976
Terrorism Index 0 0 0 0 0 0

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Tourist Arrivals 299 261 254 265 263 262
Foreign Direct Investment 718 25.2 14.48 56.05 97.61 151
Table 2
(Source: Mubeen, S.A. and Ravikumar, A., 2016)
Figure 2
(Source: Mubeen, S.A. and Ravikumar, A., 2016)
The forecasted report shows that the condition of the economy is in favour of the
country and Oman is expected to maintain a steady rate of foreign investment. Moreover the
implication of the foreign investment on the oil and gas sector is positive and has been
expected to remain that way. Oman is a small country and majority of the revenue is
generated from the oil and gas industry (Filippaios, Annan-Diab and Hermidas 2017). The
increase in foreign direct investment means that the companies in the oil and gas sector will
be able to generate a lot of revenue with the help of the foreign investments, which will help
to improve the technology and the infrastructure of this sector.

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4.1 Types of business model used in oil and gas sector in Oman
The business model of an organization is the main source of revenue generation as it
describes all the necessary procedures that are included in the operation. The business models
will an organization to add value to the products at different stages of the business procedure.
The business is the backbone of the organization as it helps to analyze whether a particular
strategy used by the organization is feasible or not. The business model of an organization
consist of the various core aspects of the organization such as the strategies, offerings,
purpose, organizational structure, infrastructure, operational processes, policies and trading
practices. The main purpose of the business model is the analysis of the various processes
and value creation of the product offered (Al-Mawali, Hasim and Al-Busaidi 2016). The key
partners, key resources, customer value, supply, cost structure and revenue generation are all
the important factors that is monitored using a business model.
The business model of the oil and gas sector will have to be defined based on the
needs and wants of that particular industry. The demand and supply part of the organization
will define what has to be included in to the business model. The organizations will have to
understand the economic conditions, geographical significance and the demand of the product
in the market. The company in this region will be analyzing these factors closely before
developing a business model suitable for the organization. The unique geographical location
of the country is one of the factors, which has given the sultanate of Oman a competitive
advantage as they able to develop trade relations with the countries out of the Persian Gulf.
The country has established their trade relations in the continents of Africa, Europe, Asia and
America (Nikhalat‐Jahromi, Fontes and Cochrane 2017). The country is rich in oil and
natural gas and is one of the major exporters of the oil to different parts of the world.
Enhance Oil Reactor (EOR) is one of technologies which all the companies are for increasing

9DISSERTATION
the recovery of oil. EOR injects a fluid in the reservoir, which will help in extracting more
amount of oil when compared to the conventional water pressure or flood. The companies to
extract more amount of oil than the conventional method can use the EOR technology and
Sultanate of Oman has been the leaders in commencing EOR projects. PDO is a company,
which is using the EOR technology in three different projects to extract more amount of oil
from the reservoirs. The oil and natural gas is the major generator of revenue for the country
so they are using advanced technology to make improvements in their energy extraction
techniques. Oman has started the field steam injection EOR that is the first of its kind
(Espinasa et al. 2017). The magnitude of the project is the largest in the world and uses a
technology named thermally assisted gas oil gravity drainage (TAGOGD) which has never
been used before in any carbonated reservoir. This process will help in the increasing the
production of the oil and natural gas by 25% (Khalifa, Alsarhan, and Bertuccelli 2017). This
shows that, as the country is dependent on the oil and natural gas for generation of revenue so
the companies are using innovative technology in the business model to improve the
production.
Generally, the oil and gas industry use similar kind of business model for the
development of the organization. However, there are two aspects, which are mainly important
for the organization, one is the supply and other is the demand. The demand and the supply of
the products will determine how the business model of the system is going to work. The
demand of oil and natural gas is high and Oman is one of the largest producers of oil and
natural gas. The business model of the organization will depend on the size of the business
and generally, there are five models that have been used in oil and natural gas industry. The
first model is named as buccaneers, which is used by the small companies and had made
exploration in uncharted waters to collect raw materials (Zhu, Pan, and Chang 2016). These
are relatively new companies, which use dry well to dig up oil. The sustainability of such

10DISSERTATION
organization will be a problem sa they will become prey for the large organization in the
market. The companies will have the opportunity to survive by making mergers with similar
type of organizations. The second model in this industry has been named as the Sharks of
Shale who generated new resources by the usage of the hydraulic fracturing. These
companies will have to keep on moving if they want to survive as they face problem due to
the drilling in the slum areas (Al Hatmi et al. 2014). The companies got victimized by their
own success and they are huge amount of debt in the market. Eventually, the lenders will lose
their patience and even hedging their funds to mitigate their risk in the market will not be
enough to save their creditworthiness. However, these companies can maintain their
sustainability by reducing the cost of production and making improvements in the technology
used by the organization. The third business model is named as Super tankers and consists of
the major oil companies in the world. These companies do not have any problems in
maintaining in the sustainability in the market but they are facing problems due to the
swelling cost and the stagnancy in production (Buchanan et al. 2014). These companies have
high financial strength and they will face less amount of problem in maintaining their
sustainability. However, these will have to downstream their assets to reduce the cost of the
organization and use strategies to hedge the risk in the market. The next model is named as
flagships and consists of all the national companies who have internationalised in the market.
These companies have brought a new dimension to the market and the organization secured
the use of hydrocarbons in the domestic market (Khatib 2014). These companies will keep
on making expensive purchases so that they can make gain competitive advantage in the
market. The last and the final model that is used in the oil and the natural gas industry is the
merchant who look for opportunities to capitalize on and these companies have diversified
their portfolio. The companies not only manufacture oil and gas but other products such as
metals, commodities and agriculture (Treyer and Bauer 2016). However, the companies will

11DISSERTATION
have to be aware of their debt so that they do not put too much burden on the capital reserves
of the organization.
Oman is one of the largest suppliers of oil outside the OPEC countries but still cannot
be considered as a major petroleum exporter. The companies in Oman belong to the category
of Sharks of Shale and they make use of the advanced technology to improve the quantity of
oil they can extract form their reserves. The figure shows the consumption and production of
oil in Oman which means that the company are of medium magnitude and has the
opportunity of growing in the market (Charabi and Al-Badi 2015). Thus, it can said that as
the country’s economy is dependent on the revenue generated from the oil and natural gas
sector so the companies will have to keep on innovating their business model by using latest
technology so that they can maintain their sustainability in the market.
Figure 3

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(Source: Baporikar 2015)
4.2 Impact of business model on attracting foreign direct investment
The oil and natural gas companies in Oman are of smaller structure and aided by the
government. The companies are trying to make use of advanced technology to improve their
level of production and the reduction is the prices of the oil have deeply affected the industry
in Oman. Thus, the government has made the trade in the market free which is enabled the
foreign investors to invest freely in the market (Rogmans and Ebbers 2013). The government
has nullified all the restrictions in the market, which has helped the foreign investors to invest
more freely in the market. The government of Oman has been able to create a market which
is fully stable so it provides a security for the companies and as well as the foreign investors
in the market. The property rights and the rule of law have changed completely; the access to
capital and global market has become much easier because of the modern infrastructure
network that has been developed by the government. The government has implemented
policies for the development of the infrastructure within the oil and natural gas industry and
at the same time to facilitate the foreign investors in making investments in the market. The
government has made efforts to develop the relationship between the public and the private
organizations. Thus, the government is providing the organization with a free opportunity to
expand their business by gathering capital for the foreign investors (Blonigen and Piger
2014). The government has been able to build a good relation with the United States, which
has helped the organization in the country to gain funds for developing new technologies and
starting projects for better extraction of oil. The government in the country is making sue of
the economic diversification, which will help in the development of the oil and natural gas
sector. The country is focused on making improvements in this sector as it the main source of
the revenue generation for the organization. The country has made amendments to the trading

13DISSERTATION
scenario of the organization and this has provided the foreign investor with many
opportunities, which appear to be lucrative for the foreign investors in the market (Frank and
Freeman 2014).
Oman has created free trade, which will provide the investor with advantages in
making investment in the market. The macro environment of the country is stable and the
government has made attempt to make the environment of the business as friendly as
possible. The geographic location of the country is an optimal position, which makes import
and export of products back and forth from the country very easy. Even though there is
volatility in the economy of the country, it provides a strategic position for the companies and
investors in the market (Xia et al. 2014). Oman has been successful in forming relations with
first world nations, which has helped the country to develop a superior infrastructure.
Moreover, the workforce of the country is bilingual in nature and consists of educated people
who will help in developing a workforce that is cheap and efficient. The connectivity of the
country to other parts of the world is convenient so the foreign investors and the companies in
the country have the opportunity of capitalizing on this situation. The companies in the
country are making use of these advantages to grab the attention of the foreign investors and
incorporating them in to the business model of the organization. Thus, it can be seen that the
companies in the market has been successful in incorporating these factors in to the business
model of the organisation, which is helping in grabbing the attention of the consumers in the
market (Snihur, Kiss and Barr 2016).
4.3 Trends of foreign direct investment in oil rich country like Oman
Oman has made considerable efforts in gaining the attention of the foreign investors
by making the market free. In the year of 2014, the sultanate of Oman has been successful in
drawing the foreign direct investment of around 1189 million dollars, which is estimated to

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be the 2.7 % of the total in Arab. The incoming balances which came from the foreign direct
investment amounts to 19.7 billion dollars, which is 2.5 % of the investment in the Arab
region (Kennedy and Haigh 2016). The market trends from the year of 2003 shows that the
country consists of 496 foreign direct investment projects, which are being implemented by
372 companies in Arab and other foreign companies in the market. The overall cost of these
entire projects can be considered to be 39 billion and consist of around 83 thousand workers.
The major nations from all over the world have invested in Oman because of the low cost of
the workers. USA, China, UK, India, Qatar, Germany, Canada, Kuwait and South Korea are
the countries who have made investment in Oman. The majority of the contribution has been
made by China, India and UK, which accounts to around 60 % of the total investment
(Ahmed 2017). The foreign direct investment has been distributed according to the sectors in
the industry where coal, oil and gas industry consist of 30.8% of the investment, the mineral
sector will consist of 20.3% of the funds and the chemical sector consist of the 12.7% of the
funds (Azad and Khatabi 2017). In the year of 2016 the country has been able to
comparatively increase the foreign direct investment. The country has been able to increase
the foreign direct investment by OMR0.8b and the final quarter in the fiscal year of 2016 say
the highest amount of foreign investment made by the other countries in the market, which
amounted to OMR 717.5m. This will help to increase the stability of the economy of the
country. The oil and gas industry is one of the most capital-intensive industries and the
revenue generation of the country is dependent on this sectors. Thus, the majority of the
investment has been made in the oil and gas industry but logistics is a growing market, which
is generating a lot of revenue (Dhanda 2017). The logistics industry is an growing industry
and the companies in the market has the opportunity to capitalize on this opportunities in the
markets. The majority of the investment has been made in the oil and gas industry, which
amounts to around 47.3% of the total foreign direct investments. United Kingdom is among

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the list of top foreign investors in Oman that amounts to around OMR 2.797b. However,
other countries such as Kuwait, Qatar and United States are making foreign investment in
different sectors (Kurul 2017).
The economy of the country was deteriorating till the year of 2010 but from then the
country has been able to make a steady progress in the improving the foreign direct
investment in the country. The economy of the country has been stable from the year of 2010
and made immense progress in improving the growth of the economy. However, there was a
sudden dip in the foreign investment in the year of 2015 but the country has been able to
recover by the end of the fiscal year of 2016 (Steckel, Rao and Jakob 2017). Therefore, the
country was able to make a modest recovery but still the overall decrease in the investment
was around 2%. Duqm Special Economic Zone is one of the major factors, which has helped
to attract the foreign investors in to the market. The country is offering exemptions from the
custom duty and tax incentives, which is one of the major reasons more number of countries
are willing to invest. Duqm project is helping in the development of a variety of sector in the
industry, which will help in the overall growth of the economy of the country (Fiedler and
Iafrate 2016). However, the government of the country has limited the access to some of the
sectors and is forcing the foreign companies to hire domestic workers, which is acting as a
hindrance for the investment of the foreign companies in the market. The political and macro
economical situation of the country is very stable and this is acting as a boon for the nation.

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Oman Middle
East &
North
Africa
United
States
Germany
Index of
Transaction
Transparency*
8.0 6.0 7.0 5.0
Index of
Manager’s
Responsibility**
5.0 5.0 9.0 5.0
Index of
Shareholders’
Power***
4.0 4.0 4.0 8.0
Index of
Investor
Protection****
4.7 4.5 6.5 6.0
Table 3
(Source: Dhanda 2017)
Foreign Direct
Investment
2014 2015 2016
FDI Inward
Flow (million USD)
1,506 2,692 142
FDI Stock (million
USD)
21,097.7 18,405.7 18,547.7
Number of
Greenfield
Investments***
42.0 42.0 36.0
FDI Inwards (in %
of GFCF****)
6.5 11.4 0.6
FDI Stock (in % of
GDP)
26.0 26.4 29.4
Table 4
(Source: Kurul 2017)

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Oman Middle East
& North
Africa
United
States
Germany
Number of
Payments of
Taxes per Year
15.0 17.8 10.6 9.0
Time Taken For
Administrative
Formalities
(Hours)
68.0 208.2 175.0 218.0
Total Share of
Taxes (% of
Profit)
23.9 32.3 44.0 48.9
Table 5
(Source: Ahmed 2017)
The above table shows the foreign direct investment of the country where it can be
easily seen that the foreign direct investment has decreased significantly in the year of 2015
but Oman has made a steady recovery in the year of 2016 by changing the foreign policies
and the business polices of the country. The tax reforms show that there is no sales tax or
value added tax in the country, which has made it lucrative for the companies in the foreign
market to invest in the Oman market.
4.4 Critical Analysis
Thus, form the finding of the study we can say Oman is a country, which is dependent
on their oil and natural gas sector for generating maximum amount of their revenue. Thus, the
government has attempted to make changes to the government foreign and business policies,
which has helped to increase the foreign direct investment of the country. Foreign direct
investment is a must for a country like Oman who is still developing. The FDI has helped the
country to gain stability in the market and making improvements in the infrastructure. The
country is able to use advanced technologies to improve the operational productivity in oil
and natural gas sector. However, the growth of the country is not restricted to one sector but

18DISSERTATION
there is overall development n various sectors. Thus, foreign direct investment can be
considered to be one of the most important factors for the overall growth in the economy of
the country. Foreign direct investment played an important role in changing the business
model of the organizations in the country. The oil and natural gas companies in Oman are the
largest companies outside the OPEC countries to contribute to this market and are partly
governed by the state. Thus, the government made changes to the reforms and policies, which
helped in changing the business model of the various organizations. The business model in
the oil and natural gas industry has been described earlier in the study, which shows that the
Oman industry is of smaller magnitude when we consider the other big oil production nations
in the market. Thus, in order to maintain their sustainability in the market, the organizations
are making changes to their business model so that they can improve their operational
productivity. This is the very reason that the organizations have included free trade in their
business model that is causing the companies the foreign market to invest in the oil and
natural gas sector and the other sectors such as logistics, which is one of the emerging
markets in the country. Thus, the business model had a lot of impact on the oil and natural
gas sector as it portrays the revenue generation streams of the organization. In this scenario,
the organizations in this industry are able to generate a large amount of revenue and stabilize
the economy of the country only because of the changes in the business model. This shows
that business in the oil and natural gas industry has been able to create a deep impact on the
foreign direct investment. The change in the business model is the factor that has helped to
maintain the stability in the economy of the country. There are mainly five type of business
model used by the oil and natural companies and it depends on the magnitude of the business.
Oman is a country, which is smaller in magnitude when compared to the giants in the
industry so the companies are using innovative ways to reduce the cost of their operation and

19DISSERTATION
increase the operational productivity of the organization. However, this made the country
more lucrative for the foreign investors in the market.
Thus, from the current trend in the market, it is seen that there is stability in the
foreign direct investment in the market. However, there was considerable dip in the
investment pattern in the year of 2015, which the country is trying to recover slowly.
However, it can be seen United States, United Kingdom, China and India are the country who
are investing the most in this country. The growth of the economy is only due to the oil and
gas sector as it has grabbed the attention of the majority of the investors.

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Chapter 5
Conclusion
5.0 Conclusion
Thus, the conclusion that can be drawn from the report is that business model has
significant impact on the foreign direct investment. Initially, the business market of Oman
had a lot of restrictions which made the country completely dependent on the revenue
generated from the oil and natural gas industry. However, the decrement in the prices of the
oil was a major setback for the country and then they realised that foreign direct investment is
the only way that Oman can recover from this setback. Thus, Oman started implementing
policies and strategies, which will enable free trade in the market. Thus, the free trade in the
market was created and the foreign investors were provided with other benefits, which helped
in attracting those investors in to the Oman market. This has changed the investment trends in
the market and Oman is one of the fastest growing countries among the Gulf nations. This
has only been possible because of the changes in the foreign policies of the country. These
policies have been included in the business model of the organization, which has helped to
generate more revenue from the market. The thematic analysis of the research shows that the
foreign direct investment is one of the important ways of achieving stability and growth in
the economy of the country. Foreign direct investment is one of the essential factors in the
growth of the country. Even though the country is a major producer of oil, it is much smaller
when compared to the big nations in the market so in order to maintain their sustainability in
the market the country was forced to be involved in accepting foreign direct investments from
other countries. The business model of any organization will consist of the revenue and the
cost streams of the company so use of innovation to make changes in the business model of

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the organization is the strategy applied by the companies in Oman. The oil companies in
Oman are partially controlled by the state so the change in the foreign policy is one of the
biggest changes in the business model of the organization. The companies in the market are
also gaining advanced technologies from developed nation to improve the efficiency of their
respective business model. Thus, it can be concluded by saying that foreign direct investment
has major impact on the business model of the organizations. The business model of the
organization can be considered as one of the major factors in gaining competitive advantage
in the market. The foreign direct investment has helped in the overall development of the
country and has promoted other sectors in the market. Thus, the dependency of the country
on oil and natural gas has diminished significantly. Thus, the growth in the oil and natural gas
industry in Oman is due to the foreign investors in the market who has helped to create
schemes for generation of more revenue in the market. Thus, from this thematic analysis it
has been validated that foreign direct investment has deep impact on the business model of an
organization. Moreover, it can be said that foreign direct investment has positively affected
the business model in the oil and natural gas sector.
5.1 Recommendations
It is recommended that the government of the country should stop interfering in to the
business industry. The government forces the foreign investors to recruit local workers,
which is creating hindrance for the organizations in the country. The companies will have to
make sure they provide the investors with as much freedom as possible. Otherwise, the
companies in the market will lose their foreign funding. The foreign funding is the major
source of capital for the industry so the companies in the market will be facing challenges
which happened in the early 90’s and the in the year of 2015. The companies in the market
should create a merger with the companies in the market, which will help in developing the

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business model of the organization. These mergers with the big multinational organizations
will help in identifying the changes in the business model of the organization. The growth of
the industry is very dependent on the foreign investments so it is the duty of the country to
expand their business in new countries. Oman should draw the attention of other foreign
investors in various continents, which will increase the amount of investment in the foreign
country. The companies should start other projects, which will grab the attention of foreign
investors. The country should collaborate with the other nations in the Asia region which
will help in strengthening the economy of the country. There are still restrictions in the
complementary sectors of the country, which means that the foreign will face problems in
some of the sectors that are dominated by the local companies in the market. However, tax
laws for the country should be further reduced so there is parity between the local and the
foreign companies in the market. Logistics is one of the most promising sectors in the
country. The companies in the oil and natural gas industry are somehow dependent on the
logistic industry in the market so if the growth of the industries remains stagnant it will create
problems for the other companies in the market. This means Oman should not focus on only
one industry in the market, they should contribute to the other industries. The economy of the
country is dependent on oil and natural gas industry so the government should start reforms,
which help in enhancing the Gross Domestic product of the company. Thus, it can be seen
that Oman has a lot of opportunity to improve the market economy of the country. However,
it can only be achieved by changing the perspective of the government. Thus, the government
of Oman will have to eliminate all the restrictions in the market economy so that other
industry in the market can grow. Moreover, Oman will have to build good trade relations
with powerful nations who will aid the country in times of crisis. The concentration of fund
in one sector may cause the market to crash so the government should be aware of that fact
and take measures to prevent it from happening. Oman should start new project like Duqm

23DISSERTATION
Special Economic Zone, which help in developing the economy of each sector in the market.
This will uplift the industries that need a push and thus Oman can bring about a massive
stability in the economy of the country.

24DISSERTATION
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