THE ROLE OF SMALL AND MEDIUM-SIZED ENTERPRISES IN ECONOMIC DIVERSIFICATION : A COMPARATIVE ANALYSIS OF PUBLIC POLICIES IN OMAN AND MOROCCO

Abstract

Abstract:

This study aims to analyze the influence of public policies on the contribution of Small and Medium-sized Enterprises (SMEs) to economic diversification in Oman, through a comparative lens with Morocco. The research adopts a comparative policy analysis approach, examining strategic frameworks, institutional mechanisms, and support programmes in both countries, drawing on national development plans, official statistics from the Authority for the Development of Small and Medium Enterprises (Riyada) in Oman and the Observatoire Marocain de la Très Petite, Petite et Moyenne Entreprise (OMTPME) in Morocco, policy documents, and international financial institution reports. The analysis reveals that while both countries have established comprehensive institutional frameworks to support SMEs, significant performance gaps persist, with Oman's SME sector contributing approximately 21 percent to GDP, Morocco's around 30 percent, both substantially below the 64 percent achieved by the United Arab Emirates (UAE). Key bottlenecks identified include limited access to finance, with SME credit in Oman at only 3.7 percent of total bank lending, skills mismatches between educational outputs and market needs, inadequate insolvency frameworks, and limited integration into global value chains. The findings suggest that both countries should prioritize establishing private-sector-driven credit guarantee schemes, reforming insolvency frameworks to better serve SMEs, strengthening export-oriented programmes, and enhancing skills development through public-private partnerships to unlock the transformative potential of their SME sectors for sustainable economic diversification.

Keywords: Small and Medium Enterprises, Economic Diversification, Public Policy, Oman Vision 2040, Comparative Analysis, Access to Finance, Value Chain Integration, In-Country Value (ICV)