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GTAP Resource #5774

"Looking East: Oman’s trade integration in the Indian Ocean Rim Association (IORA)"
by Boughanmi, Houcine, Abdallah Akintola, Hemesiri Kotagama and Lokman Zaibet

Apart from its traditional and cultural linkage with the MENA/ Arab region, Oman has historically entertained a strong economic and trade linkage with the Indian Ocean which represents a source of potential trade expansion and economic growth. This has been reflected in recent years by an inclination of Oman’s exports and imports towards the Indian Ocean Rim Association (IORA) countries as opposed to its traditional market of the Gulf Cooperation Council (GCC) and the Great Arab Free Trade Area (GAFTA). The objective of this study is to investigate the patterns of trade in the IORA and determine the trade potential of Oman in this region. Panel data between the years 2006- 2015 was used to estimate a structural gravity model using various estimators including the Poisson Pseudo Maximum Likelihood and Fixed Effect estimators. The results obtained are two folds; firstly, economic size, geographical proximity and historical linkages were significant determinants of trade in IORA. It is observed that the formation of IORA has increased total trade by 55 percent and makes it a trade creating association. It is estimated that the IORA formation is equivalent to a tariff drop (tariff equivalent) of 10.3 percent. Secondly, Oman still has unexploited trade potential with majority of the member states in IORA and can expand its market base thereby benefiting from its strategic location in the Indian Ocean. The results obtained from this study can be used by policy makers in Oman to direct future trade decisions towards the Indian Ocean.

Resource Details (Export Citation) GTAP Keywords
Category: 2019 Conference Paper
Status: Published
By/In: Presented at the 22nd Annual Conference on Global Economic Analysis, Warsaw, Poland
Date: 2019
Created: Boughanmi, H. (4/14/2019)
Updated: Batta, G. (2/24/2021)
Visits: 998
- Agricultural policies
- Preferential trading arrangements
- Asia (Southeast)
- Middle East

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