OMAN AS A FUTURE LOGISTICS HUB A CONCEPTUAL STUDY

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International Journal of Economics, Commerce and Management United Kingdom Vol. VI, Issue 6, June 2018 http://ijecm.co.uk/ ISSN 2348 0386 OMAN AS A FUTURE LOGISTICS HUB: A CONCEPTUAL STUDY Ali Mohsin Salim Ba-Awain Faculty of Business and Information Science, UCSI University, Malaysia Dazmin Daud Faculty of Business and Information Science, UCSI University, Malaysia dazmindaud@ucsiuniversity.edu.my Abstract The paper aims to explore the relationship between logistics infrastructures and economic growth in Oman. The method used for this conceptual paper is based on literature reviews from journal articles, conferences, books and online news which are related to the keywords and research area. Logistics infrastructure and logistics educational needs are the crucial elements for a national economic growth. Issues encountered for Oman as a future logistics hub are developing effective coordination between free trade zone areas and logistics infrastructure, and upgrading logistics programs in higher education institutions. There is a need for a greater study on determining the relationship between logistics infrastructures, logistics educational needs and economic growth although a lot of researches solely done on the general economic and education dimensions in Oman. Further research, both empirical and non-empirical, must be done in order to uncover more issues in this area. Plus, the study only covers the logistics and neglects the element of supply chain management. Keywords: Oman, logistics infrastructure, logistics educational needs, logistics hub INTRODUCTION Recognizing today's endless globalization and internalization, companies are required to improve their logistic capacity. The developments and advancements in logistics sector have facilitated major business functions such as production, distribution, and marketing. This provides a significant competitive advantage in international trade transactions. It is argued that Licensed under Creative Common Page 141 © Ba-Awain & Daud effective and accurate planning of logistics sector is able to contribute to the economic growth of a nation (Engman, 2005). Logistics sector is increasingly becoming a vital component of an international trade for assisting a nation's economic growth. Developing and improving logistic sector in one nation contributes to the competitive advantage of the nation (Lean, Huang & Hong, 2014). Logistics activities are driven by the comprehensive movement of goods. Ballou (2007) explains logistics activities as a movement of goods from raw material source to the last market destination. From the perspective of logistics management, the Council of Supply Chain Management Professionals or CSMP defines it a process of active and productive planning, implementing, and controlling of good, labor, information flow and storage from starting point to last consumer point (Stadtler, 2005). For these logistics activities to perform in a productive manner, every Government in a country must provide logistics infrastructures (Navickas, Sujeta & Vojtovich., 2011). These infrastructures include transportation networks, information and communication devices, storage systems and packing services. For the developed countries, there are no issues in providing logistics infrastructures (see Arroyo, Gaytan & de Boer, 2006; Bookbinder, 2003). However, for the third world countries, this could be an issue due to the limited economic outputs for the logistics investments (Devlin & Yee, 2005). Investing and developing of logistics infrastructures in the third world countries is a must for these countries to gain a competitive advantage in the international trade. Furthermore, it can create more employment opportunities and provide low costs in import and export activities (Kotzab & Wünsche, 2015). The Sultanate of Oman (or Oman) is one of the developing countries that focusing on the investment and developing latest logistics infrastructure. It is a country which locates in the Middle East. In 2016, the Growth Domestic Product (GDP) of Oman was USD 66.29 billion (Trading Economics, 2018). The GDP from the service sector, which included logistics, contributed USD 35426.48 million in the same year. The country views logistics is one of the nonoil economic sectors which can strengthen its economy. Oman's strategy of becoming one of the world's leading logistical centers by 2040 received a major boost with the formation of Asyad, an umbrella organization that will oversee Oman's transformation into a hub and charts out the nation's logistics framework (Times of Oman, 2017). Emphasizing on logistics for investment will help corporation and nation gain a competitive advantage in the economy. Kwasnicki (2013) supported the above statement with his view that investment in logistics support activities would broad investments for micro and also macroeconomics. The economy of Oman still depends on the energy sector (oil and gas). Under the Asyad program, Oman is looking for logistics sector as an alternative attributor to its economic growth. Totally depending on the energy sector in the long Licensed under Creative Common Page 142 International Journal of Economics, Commerce and Management, United Kingdom run make the Oman economy in danger due to the deterioration in production capacity, high production costs, and fluctuating oil prices (Hakro & Ommezzine, 2016). Despite the importance of logistics sector for a country economic growth, a research on the impact of logistics activities on economic growth in Oman is still lacking. This country is located at the gateway to the Gulf and has a logical distribution hub for the Indian subcontinent and nations in East Africa. Despite its attractive location, its massive investment in road and port infrastructure is beyond the limits due to independence and limited coordination between current transport and distribution system and other constituents in the logistics system. In addition, the weakness of soft systems including customs/border procedures, company incorporation, and legal and documentary procedures that failed to keep pace with other developments. Hence, a clear and integrated strategy is urgently required for trade facilitation. There is a real need to urge for alternative economic drivers like logistics to boost the economic growth of Oman. This can be achieved by assessing, monitoring and integrating all logistics activities in terms of its infrastructure. This research seeks to propose the idea of developing Oman as a logistics hub through directing the investments for on-going logistics infrastructures. The Government of Oman needs to accurately and effectively plan their logistic activities in order to achieve advantages in costs and efficiency. In addition to that, logistics activities in Oman will play a great role in developing and also increasing the standard of living. Therefore, a specific research question is derived from this research: to what extent the development of logistics infrastructures will affect the economic growth of Oman? This research provides salient information for both practitioner and academic. It provides the Government of Oman handful information on how logistics activities will impact the country's economic growth. Logistics sector can focus on improving the overall situation of the country by creating opportunities for job employment. As for the academic, it helps higher education institutions in Oman to develop logistics programs compatible with the needs of the country. LOGISTICS INFRASTRUCTURE GROWTH IN THE SULTANATE OF OMAN Oman's economy depends mainly on oil production. The petroleum sector contributes to 87 percent of budget revenues, 51 percent of GDP and 60 percent of total exports (Trading Economics, 2018). However, oil reserves are diminishing in recent years. This has forced the Government of Oman to consider economic diversification by focusing on other industry such as logistics service. Fallin 内容过长，仅展示头部和尾部部分文字预览，全文请查看图片预览。 s hub. June 4, 2017. Retrieved on April 9, 2018 from http://timesofoman.com/article/110430 Trading Economics (2018). Oman GDP annual growth rate 2000-2018. Retrieved on April 9, 2018 from https://tradingeconomics.com/oman/gdp-growth-annual Wu, Y. J. (2007). Contemporary logistics education: An international perspective. International Journal of Physical Distribution & Logistics Management, 37(7), 504-528. DOI: https://doi.org/10.1108/******5 Licensed under Creative Common Page 148 [文章尾部最后500字内容到此结束,中间部分内容请查看底下的图片预览]请点击下方选择您需要的文档下载。

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