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Oman: the pearl of the Arabian Sea

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Oman is a country of more than 4 million inhabitants with over 60% of the population under the age of thirty which is surrounded by the United Arab Emirates, Saudi Arabia, Yemen and the Arabian Sea and that can certainly be defined as opened to the outside world due to its unique geography, history and geopolitical situation.

The hydrocarbon price collapse is one of the main challenges that the country has to face and some major measures have already been taken by the government. Thus, with its new strategy to reduce the dependence on oil income by half defined in its five-year plan, starting this year and ending in 2020, the Sultanate shows its willingness to work on all its resources, from farming, fishing, mining, manufacturing to tourism. In December 2015, oil contributed to 44% of the GDP and the goal is to reduce this rate to 22% in 2020[1].

In the Sultanate, the non-oil sector registered an increase of 4.7%, mainly due to services sector like transport and communication, hotels and restaurants and real estate services[2]. Other sectors also registered a considerable growth like construction, electricity and water supply and mining and quarrying. Concerning tourism, the implementation of Oman’s National Strategy for Tourism 2040, announced last February, targets a 6% rise in the contribution of the tourism sector to the GDP[3]. 5 million visitors are targeted by 2040, almost double today’s level of 2.6 million visitors[4].

Logistics represent another major Omani non-oil economic sector that contributed 4.9% to the country’s GDP in 2015 with an $8.81 billion value. The country is giving a strong support to infrastructure projects as the development of national railway network and modernization of airports with focus on increasing freight handling capacity. The logistics industry in Oman is likely to grow at a compound annual rate of 6.9% between 2015 and 2020.

 

[1] New plan to cut Oman’s dependence on oil revenues, Times of Oman, April 16, 2016

[2] Spotlight on diversification as Oman aims to avoid economic slowdown, Times of Oman, March 19, 2016

[3] Oman turns to new economic horizons, CPI Financial, April 3, 2016

[4] National Centre for Statistics and Information, 2015

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