Logistics Hubs in Oman and Political Uncertainty in the Gulf

Abstract

Oman is taking remarkable steps to develop its logistics sector to be one of the main pillars of the nation’s non-oil-based economy in the future. The current fluctuation in oil prices has pressured the country to boost non-oil exports and re-exports to eventually replace oil export in the future as the main income. The aim of this research is to utilize an augmented form of gravity model to investigate the effect of GDP, population growth, distance, free trade agreements (FTAs), political relations, and cultural similarity on the value of non-oil exports and re-exports with the top 35 trading partners. This work sets the foundation for researchers to better understand the spatial placement of logistics hubs in Oman and the political influence on the national economy. Similarly, this analysis could be used by port operators and local authorities as a way to re-evaluate expansion plans of ports and investments in the logistics sector justified by realistic forecasted demands and scenarios. Undoubtedly, the study reaffirms the importance of scenario planning and forecasting to provide decision-makers with better look into the future to make more informed decisions.