Oman Economic Structure

Oman’s Economic History

Since the 1970’s, Oman has had a distinguished turnaround in the overall structure of their economy when Sultan Qabus came into power and a foundation of a modern economy was outlined. The growth plan focused on oil export, agriculture and trade – as well as nonexistent infrastructure. In the early 70’s substantial progress was made in developing roads, a new deep-water port, an international airport, power plants, schools, hospitals, and low-cost housing.

Oman’s Economic History

Since the 1970’s, Oman has had a distinguished turnaround in the overall structure of their economy when Sultan Qabus came into power and a foundation of a modern economy was outlined. The growth plan focused on oil export, agriculture and trade – as well as nonexistent infrastructure. In the early 70’s substantial progress was made in developing roads, a new deep-water port, an international airport, power plants, schools, hospitals, and low-cost housing.

With the revision of the Omani economy in 1970, the nation’s GDP has increased from less than an estimated $1 billion to US$ 78.1 billion in 2010. Major investments have been made in the gas sector in Oman. Omani gas resources outweigh its oil resources. Infrastructure was constructed on sea ports to allow gasoline to be transported in liquid form.

The investment in infrastructure also boosted Oman’s shipping, gas export and re-export trading. In 2002 Oman government also set out with a goal to diversify its economy through tourism and other key areas through direct investment from the Omani government.

The Omani riyal was pegged to the US dollar in 2009 when the two nations signed a free trade agreement to cut back on tariff barriers and help protect Omani investments from foreign nations.
 

Oman’s Economic Geography

Location: Middle East, bordering the Arabian Sea, Gulf of Oman, and Persian Gulf, between Yemen and UAE. Oman has a strategic location on Musandam Peninsula adjacent to Strait of Hormuz, a vital transit point for world crude oil. Approximately 40% of the world’s oil passes through this Strait.

Area: total: 309,500 sq km

Terrain: central desert plain, rugged mountains in north and south. Only 0.12% of the land area is farmed.

Coastline: 2,092 km

Climate: dry desert; hot, humid along coast; hot, dry interior; strong southwest summer monsoon (May to September) in far south

Challenges include summer winds, which often raise large sandstorms and dust storms in interior; periodic droughts; rising soil salinity; beach pollution from oil spills, and limited natural fresh water resources.

Natural resources: petroleum, copper, asbestos, some marble, limestone, chromium, gypsum, natural gas

Agriculture – products: dates, limes, bananas, alfalfa, vegetables; camels, cattle; fish

Oman’s Population and Labor Force

Oman’s population is 2.845 million. It is one of the fastest growing populations in the world, growing at 3.138%.

The Omani Labor force is 968,800. About 60% of the labor force is made up of foreign workers, although that number has been going down through the process of Omanization.

The unemployment rate is between 10% and 15%.