Economy of Oman

Oman is a middle-income economy that is heavily dependent on dwindling oil resources. Because of declining reserves, Muscat has actively pursued a development plan that focuses on diversification, industrialization, and privatization, with the objective of reducing the oil sector's contribution to GDP to 9% by 2020. Tourism and gas-based industries are key components of the government's diversification strategy. By using enhanced oil recovery techniques, Oman succeeded in increasing oil production, giving the country more time to diversify, and the increase in global oil prices throughout 2010 and 2011 provides the government greater financial resources to invest in non-oil sectors. In the same time, Oman lies on a strategic Strait of Hormuz, where 40 percent of the world's oil shipments pass.

Since 1970 the average per capita income has increased more than 5,000 per cent from $343 to reach $18,000 in 2009 and literacy rates have soared. But the question now is whether Oman can keep the momentum going. The achievements of the past 40 years have been made possible by vast revenues from oil production.

However, increases in social welfare benefits, particularly since the Arab Spring, will challenge the government's ability to effectively balance its budget if oil revenues decline. By using enhanced oil recovery techniques, Oman succeeded in increasing oil production, giving the country more time to diversify. 

Oman has successfully executed its diversification strategy as non-oil GDP to grow 5.4 per cent in 2011 from 3.1 per cent in 2009. The non-oil sector's contribution to GDP rose considerably from 52.7 per cent in 2001 to 72.2 per cent in 2011. Factors such as high domestic demand, an expansionary fiscal policy and growth in the non-oil economy would bolster economic growth to average 5.1 per cent over 2013–17.
Strong growth in non-oil production is likely to compensate for the weakness in oil production. Factors such as high domestic demand, an expansionary fiscal policy and gains in the non-oil economy would ensure robust economic growth.

Oman Vision 2020

Created in Muscat, the Vision 2020 of Oman was adopted in June 1995. Vision 2020 focuses on all of the aspects of the Oman economy ranging from human resources to economic diversification.

As per the Vision 2020, Oman is expected to be a non-oil dependent country as it increases the measures of diversification into the services, industrial and financial sectors. Due to the fact that Oman is highly dependent on hydrocarbon for its revenues and growth. Oil’s share of total GDP is expected to drop to 9% in 2020 as compared to 41% in 2009. Oman focus on industrial sector is evident in the Vision 2020 as it plans to increase its share in GDP to 29% in 2020 as compared to 18.5% in 2009.

Natural Gas is expected to see further development in production and exploration as Oman expects its contribution to GDP to reach 10% which is higher than the oil contribution. Oman is expected to carry out a third liquefied natural gas (LNG) train raising its capacity to 10mtpa of LNG. LNG is expected to become the largest non oil earner in the Omani economy and is expected to generate USD24bn over the next 25 years. Non-oil contribution to GDP is expected to reach 81% in 2020 as compared to 61.3% enjoyed in 2009. Agriculture & fishing on the other hand is estimated to contribute more than 5% in 2020 through tax incentives to corporation on income for 5 years. Paired with this is the carefully structured tourism strategy, aimed at high net worth individuals. One of the main goals of the Tourism Ministry is to represent Oman as a year-round destination.

Essential Information

Area: 312,500 sq km
Population: 3,154,134 (July 2012)
Capital: Muscat
Principal Towns: Seeb, Muttrah (part of the Capital), Sohar, Sur, Nizwa, Salalah.
Languages: Arabic is the official language but English and other languages are widely spoken.
Gross Domestic Product: $ 80 billion (201 2 est.).
GDP per capita: $25364 (2012 est.)
International Reserves: $15.1 billion (201 2 est.)
Climate: On the coast in the north it is hot and humid during the summer months of June through September where the temperature can reach 45 degrees C. Inland the heat is more arid. The winter temperatures remain warm on the coast while it can get cold in the interior. The south-western region of Dhofar has a sub-tropical climate with a monsoon season between mid-June and mid-September.
Currency: $1 ≈ 0.385 Omani Rial (OMR).
 
DEMOGRAPHY
Age Distribution (201 2 est.)
0-14 years: 30.6%
15-24 years: 20.2%
25-54 years: 42.1%
55-64 years: 3.9%
65 years and over: 3.2%
 
Population Growth
2.0 4 % (201 2 est.)

Education
Literacy of total population: 81.4%
 
NATURAL RESOURCES
Fossil Fuel
petroleum, natural gas
Minerals
Copper, asbestos, some marble, limestone, chromium, gypsum

Visa Requirements:

Non-sponsored business or tourist visitors can obtain two-week visas from consulates and embassies abroad. Some five days are required to process an application.
A 24-hour transit visas has been introduced for air passengers in transit but delayed for technical reasons.
Sponsorship will be required for longer-term visas. Once in the sultanate sponsorships can be transferred under certain conditions.

 National Day, 18 November

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Diplomatic representation of Oman to Switzerland