Price squeeze: Omanis' spending in UAE may be hurting economy at home
Omanis and Sultanate-based expatriates visiting the UAE spend about OMR42 million ($110 million) a year on shopping, according to official statistics.
The figures are based on the annual exchange of the UAE dirham in money exchange companies and banks by individuals as recorded by the Central Bank of Oman. However, these numbers do not include transactions of cross border businesses.
Statistics from the Muscat Airport and the country's borders with the UAE show that 240,000 passengers travelled from Oman to the emirates in 2013. The figure does not take into account the trucks carrying goods across the UAE borders. Most of these visitors from Oman visit the UAE more than once, mainly the emirates of Dubai and Sharjah.
Omanis mostly spend in hotels, shopping, restaurants, and, when they are building homes, on furniture and building materials. In the last three years, Omanis have been opting to go to Dubai for medical treatment instead of India and Thailand.
Expatriates go on weekend trips and spend money on hotels, gifts and the UAE visa at the border. The Asian communities spend heavily on gold since Dubai offers a wider range of choice in jewellery than Oman. The money Omanis and locally based expatriates spend in the UAE does not include insurance for those who travel by car since they pay for insurance cover to the local companies.
"The gold prices are about the same here or there but Dubai has different designs which you don't find in Oman," Prakash Oomen, an Indian based in Muscat, told the Times of Oman.
The peak visit seasons are the two Eid holidays and the National Day when Omanis and residents enjoy a long break. Up to 15,000 make it to the UAE either by road or air during these holidays, according to the records of the department of immigration.
"I spent about OMR7,000 ($18, 181) last year, when I was building my house, on bathroom tiles, kitchen cabinets, bathroom sets, bedroom and living room furniture in Sharjah. It is cheaper there than in Oman," Hamed Al Masroori, a resident in Al Khuwair, said.
Economists say that the country's economy would have benefited if the money were to stay in the country instead of being spent in the UAE.
"The real reason they go to the UAE is the shopping environment and openness of trade, which we don't have here. Perhaps it is time we think in the same way and change our urbanisation plan to make it more appealing so that we can spend that money right here at home," Dr Maya Al Muharmi, a retired professor of economics at the Sultan Qaboos University said.
A spokesman of the Shura Council said that various recommendations made to the government were in place to make Oman more competitive in retail sector to keep the money home.
"The Mall of Oman, the Omagine project with shopping complexes, the Exhibition and Trade Convention Centre, six international hotels, the development of Salalah beach resorts, the Sohar and the Duqm urbanisation programmes are part of the projects which are on the way to make Oman a vibrant retail centre for both local residents and visitors from neighbouring countries.
"All these projects will be completed by 2018," the Shura Council spokesman told the Times of Oman.