THE ECONOMY
A late and slow starter in the oil production business (Oman first exports left the
country in 1967), the Sultanate has been able, thanks to its political stability and an
intelligent and open economic policy towards the rest of the world, to achieve with
success a transition from one of the poorest countries in the Arab region to a Country
of medium/high per capita income, ranking 40th in the world statistics.
Oman, and its economy depend heavily, like the other countries of the region, on
hydrocarbons and in particular crude oil, that plays an important part and accounts for
almost a forth of the GDP in real terms, even if in recent years, due to the wise policy
adopted by the Omani’s authorities under the instructions of H.M. Sultan Qaboos bin
Said, this proportion is slowly declining.
The oil resources of Oman are known to be limited and such concerns has added
urgency to the need, and the consequent decision, to diversify the economy. The emphasis
has therefore gradually shifted towards natural gas, and in particular its
export in the form of liquefied natural gas (LNG) and gas based industries. Agriculture
plays an important role in terms of employment even if its contribution to the GDP is
under 3%. Tourism is another sector that has being indicated as a priority in the policy
of diversification of the country.
In order to face the more important economic challenges due to a rapidly increasing
population, falling revenue from oil exports and a market which is dominated by the
public sector, Omani authorities have focused their economic strategies in three main
themes: replacement of expatriate workers with Omanis (Omanisation), privatizations
and economic diversification. However the economy, even during the present economic
crisis, has maintained its strong performance thanks to the reserves accumulated from
the revenue due to the high oil prices of the past. The GDP has more than doubled
since the year 2002 with substantial increases of the non oil sector thanks to the
policy of diversification.
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