The Economic Development
The transformation of Oman's economy from a modest, rudimentary economic base depending on exports of raw materials such as dates, dried limes, fish and leather into a significantly more developed structure capable of achieving one of the highest world growth rates (9.5% in 1996) is the result of considerable effort and dedication at all levels of society. Over the course of the first four Development Plans, each lasting five years, i.e. from 1976 to 1995, the economy made fundamental changes that brought it from a state of isolation and poverty into one of the most successful economies in the region, creating a positive climate for both regional and international banks and other financial establishments to base themselves in the country.
A key to this programme has been the development of the non-oil sector. Currently, there are six industrial zones in the Sultanate: Rusayl in Muscat; Raysut in Salalah; Sohar; Sur; Nizwa and Buraimi. They include 118 factories, in addition to many others that are presently under construction or at the planning stage. These industrial projects vary from aluminum smelting in Sohar, with a planned production capacity of 480,000 tonens per year, to the ammonia fertiliser plant in Sur and other medium and light manufacturing industries such as furniture, household utensils, building material, glassworks and canning.
The Sultanate's development strategy is focused on promoting the non-oil sector with a view to augmenting oil revenues and eventually replacing them. It also endeavours to increase the rate of investment directed towards high income projects, particularly in the fields of industry, mining, agriculture and fisheries and the development of human resources, so that these can make positive contributions to the Omani economy and the refinement of its infrastructure. In addition, it supports trading activities and promotes the consolidation of the private sector with the national economy.
Against this background, a new 1996-2020 25-year Development Strategy was formulated, with the aim of further strengthening the Omani economy by reducing its dependence on government spending, oil revenues and expatriate labour. One of the main elements of this envisions the establishment of an efficient private sector, able to face competition and make an effective contribution to the development process. It also places a priority on the development of human resources and the establishment of a dynamic, diversified economy that can interact efficiently with the world economy.
The Fifth Five year Development Plan (1996-2000) is directed at boosting economic performance and increasing the non-oil sector's share in the GDP to 68.8% by the end of the year 2000. To lure foreign investors and achieve greater harmony with the world economy investment incentive laws were introduced to help keep the Sultanate's trading environment in line with World Trade Organisation norms. The moves also promote closer relations with friendly countries and reassure investors of the sound economic trends and appropriate investment climate in Oman.
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