Worldwide recession? Where should investors look?

OPINION:

Predictions for the world economy for 2023 are not good. Nearly all economic experts expect an economic recession to engulf the civilized world, causing hardship and new challenges, just as things had begun to recover from the ravages of COVID-19. No one is spared, not Europe, not Asia and not the United States. The only area of disagreement seems to be how deep and how long the recession will be.

In times of economic turmoil, investors tend to hedge their bets. Many pull their money from traditional investments hoping to ride out the storm in cash positions or looking for alternative investments. 

Some media reports indicate that there is currently more than $5.5 trillion being held out on the sidelines as investors try and determine what will happen with the economy and where they can safely invest. To put that in perspective, the generally recognized historical record was the $3.8 trillion in cash held back during the financial collapse of 2009. The most money ever is being held out now.

The logical question becomes, in a recession, in a time of potential economic chaos, what is a reasonable alternative investment? Investment gurus will throw around terms like “long-term” and “stability.” With that in mind, where will investors find a great potential upside yet enjoy the stability they prefer? 

The answer may be in Oman. 

Mineral Development of Oman (MDO) was created by their government to educate the world on what is available in the Middle Eastern country and what advantages they have to offer potential investors. The deeper one looks, the more impressive the offering appears. 

Perhaps a bit of context should be offered before jumping into the opportunities in Oman. You may have heard that electric vehicles (EV) are the future. Most of the major auto manufacturers are betting the house on it. General Motors says all Cadillac and Buick models will be electric by the 2030 model year and all GM products by 2035. No more combustion engines. Ford Motor Company is investing $22 billion through 2025 to get its EV program up and running. Chrysler has announced plans to go all-electric, not even hybrids, by the 2028 model year. Chrysler’s parent company Stellantis is putting $35.5 billion into its EV plan through 2025. 

All of that matters because if combustion engines are out and cars become exclusively dependent on batteries, there are a number of minerals required to make those batteries work. The long-term picture is one where said minerals would certainly appear to be a solid bet for investors. 

That is where Oman comes in. The country is mineral rich. It has traditional minerals that continue to be in demand, like copper, gold and dolomite. Oman is the world’s largest gypsum exporter. Other minerals believed to be in healthy supply include chromite, cobalt, lead, magnesium, manganese, nickel, palladium, platinum, silver, vanadium, and zinc.

If you believe the future is in EVs, a few of the items on that list should grab your attention. Cobalt is an essential ingredient in lithium-ion batteries used to give EV automobiles range and durability. Nickel and Manganese are too. If the demand for electric car batteries is indeed going to increase dramatically in the coming years, Oman is a logical place to plant your investment flag in the here and now. 

Every investor craves stability when putting big sums of money at risk. Oman offers it in spades. The nation is recognized as one of the top two countries on earth as far as peace. Oman has a very strong trade agreement in place with The United States and has a tax system that is very business-friendly. That system is being further enhanced in order to encourage even more investment. The government created the Ministry of Energy and Minerals specifically to work with those who recognize the potential. The MDO is part of that effort. 

Engineer Nasser Saif Al-Muqbali is the CEO of Minerals Development Oman. He sees the recession as providing a unique opportunity. “If a recession is coming, people tend to look at long-term investments. During a recession, there will always be an opportunity. There will be a demand for the commodities that we offer. I think it is the right time to invest in the mining sector in Oman. 

Oman’s strategic location provides easy access via sea to much of the world, making it particularly appealing, as do its three major ports. The nation’s infrastructure is outstanding, and energy prices are the most competitive in the region. 

All the ingredients for success are there. As investors look around a world expected to suffer recession through much of 2023 in hopes of finding a stable, long-term investment, Oman just may offer one of the best opportunities of all. 

• Tim Constantine is a columnist with The Washington Times.