Economy of Oman
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| Economy of Oman | |
| Currency | Omani Rial (RO) = 1000 baisas |
|---|---|
| Fiscal year | Calendar year |
| Trade organizations | WTO |
| Statistics | |
| GDP (PPP) | $52.3 billion (2007 est.) (81th) |
| GDP growth | 8.3% |
| GDP per capita | $19,900 (2007 est) |
| GDP by sector | agriculture 2.6%, industry 38.8%, services 58.7% (2006 est.) |
| Inflation (CPI) | 7% |
| Population below poverty line |
NA |
| Labor force | 920,000 (2002 est.) |
| Unemployment | 15% (2004 est) |
| Main industries | crude oil production and refining, natural and liquefied natural gas (LNG) production; construction, cement, copper, steel, chemicals, optic fiber |
| External | |
| Exports | $24.73 billion f.o.b. (2006 est.) |
| Export goods | petroleum, reexports, fish, metals, textiles |
| Main export partners | China 29.5%, South Korea 17.5%, Japan 11.5%, Thailand 10.6%, UAE 7.2% (2004) |
| Imports | $10.19 billion f.o.b. (2006 est.) |
| Import goods | machinery and transport equipment, manufactured goods, food, livestock,lubricants |
| Main import partners | UAE 21.2%, Japan 16.6%, UK 8.4%, Italy 6%, Germany 5.1%, US 4.7% (2004) |
| Public finances | |
| Public debt | 2.80% of GDP |
| Revenues | $14.33 billion (2006 est.) |
| Expenses | $12.88 billion; including capital expenditures of $NA (2006 est.) |
| Economic aid | $76.4 million (1995) |
| All values, unless otherwise stated, are in US dollars | |
Oman is a remarkably stable country in the Middle East. Current GDP per capita has expanded continuously in the past half-a-century. It grew 339% in the Sixties reaching a peak growth of 1,370% in the Seventies scaling back to modest 12% growth in the turbulent Eighties and rising again to 34% in the Nineties.
Contents |
[edit] Macro-economic trend
This is a chart of trend of gross domestic product of Oman at market prices estimated by the International Monetary Fund with figures in millions of Omani Rials.
| Year | Gross Domestic Product | US Dollar Exchange | Inflation Index (2000=100) |
|---|---|---|---|
| 1980 | 2,190 | 0.34 Omani Rials | 80 |
| 1985 | 3,591 | 0.34 Omani Rials | 76 |
| 1990 | 4,493 | 0.38 Omani Rials | 95 |
| 1995 | 5,307 | 0.38 Omani Rials | 100 |
| 2000 | 7,639 | 0.38 Omani Rials | 100 |
| 2005 | 11,660 | 0.38 Omani Rials | 101 |
For purchasing power parity comparisons, the US Dollar is exchanged at 0.29 Omani Rials only. Average wages in 2007 hover around $76-92 per day.
[edit] Economy - overview
Oman's economic performance improved significantly in 1999 due largely to the mid-year upturn in oil prices. The government is moving ahead with privatization of its utilities, the development of a body of commercial law to facilitate foreign investment, and increased budgetary outlays. Oman liberalized its markets in an effort to accede to the World Trade Organization (WTO) and gained membership in 2000.
When Oman declined as an entrepot for arms and slaves in the mid-19th century, much of its former prosperity was lost, and the economy turned almost exclusively to agriculture, camel and goat herding, fishing, and traditional handicrafts. Today, oil fuels the economy and revenues from petroleum products have enabled Oman's dramatic development over the past 30 years.
Oil was first discovered in the interior near Fahud in the western desert in 1964. Petroleum Development Oman (PDO) began production in August 1967. The Omani Government owns 60% of PDO, and foreign interests own 40% (Royal Dutch Shell owns 34%; the remaining 6% is owned by Compagnie Francaise des Petroles [Total] and Partex). In 1976, Oman's oil production rose to 366,000 barrels (58,000 m³) per day but declined gradually to about 285,000 barrels (45,000 m³) per day in late 1980 due to the depletion of recoverable reserves. From 1981 to 1986, Oman compensated for declining oil prices, by increasing production levels to 600,000 b/d. With the collapse of oil prices in 1986, however, revenues dropped dramatically. Production was cut back temporarily in coordination with the Organization of Petroleum Exporting Countries (OPEC), and production levels again reached 600,000 b/d by mid-1987, which helped increase revenues. By mid-2000, production had climbed to more than 900,000 b/d where they remain. Oman is not a member of OPEC.
Natural gas reserves, which will increasingly provide the fuel for power generation and desalination, stand at 18 trillion ft³ (510 km³). The Oman LNG processing plant located in Sur was opened in 2000, with production capacity of 6.6 million tons/YR, as well as unsubstantial gas liquids, including condensates.
Oman does not have the immense oil resources of some of its neighbors. Nevertheless, in recent years, it has found more oil than it has produced, and total proven reserves rose to more than 5 billion barrels (0.8 km³) by the mid-1990s. Oman's complex geology makes exploration and production an expensive challenge. Recent improvements in technology, however, have enhanced recovery.
Agriculture and fishing are the traditional way of life in Oman. Dates and limes, grown extensively in the Batinah coastal plain and the highlands, make up most of the country's agricultural exports. Coconut palms, wheat, and bananas also are grown, and cattle are raised in Dhofar. Other areas grow cereals and forage crops. Poultry production is steadily rising. Fish and shellfish exports totaled $34 million in 2000.
[edit] Modernisation
The government is undertaking many development projects to modernise the economy, improve the standard of living, and become a more active player in the global marketplace. Oman became a member of the World Trade Organization in October 2000, and continues to amend its financial and commercial practices to conform to international standards. Increases in agriculture and especially fish production are believed possible with the application of modern technology. The Muscat capital area has both an international airport at Seeb and a deepwater port at Mina Qaboos. The newly opened (1999), largescale modern container port at Salalah, capital of the Dhofar Governorate, and a seaport at nearby Raysut were recently completed. A national road network includes a $400 million highway linking the northern and southern regions. In an effort to diversify the economy, in the early 1980s, the government built a $200-million copper mining and refining plant at Sohar. Other large industrial projects include an 80,000 b/d oil refinery and two cement factories. An industrial zone at Rusayl showcases the country's modest light industries. Marble, limestone, and gypsum may prove commercially viable in the future.
The Omani Government is implementing its sixth 5-year plan, launched in 2000, to reduce its dependence on oil and expatriate labor. The plan focuses on income diversification, job creation for Omanis in the private sector, and development of Oman's interior. Government programs offer soft loans and propose the building of new industrial estates in population centers outside the capital area. The government is giving greater emphasis to "Omanization" of the labor force, particularly in banking, hotels, and municipally sponsored shops benefiting from government subsidies. Currently, efforts are underway to liberalize investment opportunities in order to attract foreign capital.
Some of the largest budgetary outlays are in the areas of health services and basic education. The number of schools, hospitals, and clinics has risen exponentially since the accession of Sultan Qaboos in 1970.
United States firms face a small and highly competitive market dominated by trade with Japan and Britain and re-exports from the United Arab Emirates. The sale of U.S. products also is hampered by higher transportation costs and the lack of familiarity with Oman on the part of U.S. exporters. However, the traditional U.S. market in Oman, oil field supplies and services, should grow as the country's major oil producer continues a major expansion of fields and wells. In addition, on 20 July 2006 the U.S. Congress approved the US-Oman Free Trade Agreement. U.S. President Bush is expected to sign it, and after implementation, U.S. firms will be able to buy from and sell to Oman duty free on most items.
[edit] Omanization
[edit] Introduction
In Oman, the Omanisation programme has been in operation since 1988, working toward replacing expatriates with trained Omani Personnel. by the end of 1999, the number of Omanis in government services exceeded the set target of 72%, and in most departments reached 86% of employees. The Ministry has also stipulated fixed Omanisation targets in six areas of the private sector. Most companies have registered Omanisation plans. Since April 1998 a 'green card' has been awarded to companies that meet their Omanisation targets and comply with the eligibility criteria fro labour relations. The names of these companies are published in the local press and they receive preferential treatment in their dealings with the Ministry.
H. M. Sultan Qaboos to oversee Omanisation drive
His Majesty Sultan Qaboos has underlined the growing need for collective efforts to boost Omanisation, saying he would personally follow up the implementation of the recommendations of the newly-created National Manpower Employment Forum.
"Forums and studies usually tackle hypothetical issues but the subjects of this forum are realistic and the implementation of its recommendations will be possible only if there is a concerted effort from the government and the other sectors of the community", said Sultan Qaboos, while addressing at the royal camp in Ibri Walis, members of the State Council, the upper house of parliament, Majlis Al Shura, the lower house and dignitaries belonging to the Dhaihra region.
Omanisation, a campaign meant not only to ensure job for each citizen but also to reduce dependence on expatriates in search of self-reliance in human resource, has become the government's top priority more than ever before since the recent address by the Omani leader to the joint house of parliament, devoted as it was to the national manpower development.
The local media has been geared up to drive home the royal message to ensure a complete success of the campaign.
Already, thousands of illegal workers have been sent back home to create room for citizens and more are leaving before the extended amnesty deadline expires by the end of this month. A similar move was initiated three years ago.
Expatriates form more than one-fourth of the 2 million population, according to the first census held in 1993.The next one is due in late 2003. According to Oman Television, which broadcast the royal address in Ibri, Sultan Qaboos said he has watched some Proceedings of the forum on Omanisation on television and was impressed by the level of frankness pervading the atmosphere.
"Without open discussions nothing could be achieved", he announced.
A number of ministers, accompanying Sultan Qaboos on the tour, have come out with indepth working papers, pinpointing hurdles facing Omanisation and ways to remove them to meet the all-important objective.
One of the main obstacles, as pointed out by Sheikh Amor bin Shuwain Al Hosni, Minister of Labour and Social Affairs, was the presence of foreign top management which prefers expatriate workers, a clear hint that this top stratega needs to be 'Omanised.'
Sultan Qaboos said the Omani youth constituted a large vital section of the society and no effort would be spared to ensure a bright,dignified future for them. At the same time, he exhorted the youth to work diligently and selflessly for the development of the country, as "work ,whatever its nature, is a virtue."
He explained that citizens able to establish their own projects will not only benefit themselves but also their families and the whole community. "Failing to act and talking about obstacles and hurdles will lead to nowhere," he said.
The Ministry has stipulated a fixed Omanisation ratio in six areas of the private sector. Transport, storage and communications are to have 60% Omanisation, finance; insurance and real estate 45%; industry 35%; hotels and restaurants 30%; wholesale or retail trading 20% and contracting 15%.
The Omanisation Follow-up and Monitoring Committee
The Omanisation Follow-up and Monitoring Committee, which comes under the Diwan of the Royal Court, was set up by Royal Decree No. 95/97. It is responsible for following up and monitoring plans and programmes to Omanise jobs in the public and private sectors. In this connection, its powers include helping to determine the national economy’s manpower needs, preparing investment and recruitment plans for the implementation of Omanisation policies in conjunction with the other competent authorities, and preparing progress reports on Omanisation in the public and private sectors.
The Committee is chaired by His Excellency Abdul Alim bin Mustahail Rakhyut. Seven of its twelve members represent the government sector, while the remaining five represent the private sector. It is currently attempting to create a complete and accurate data base on the labour force in Oman, which will include information about Omanisation and ways of promoting it.
The Committee submits its reports directly to His Majesty the Sultan via the Minister of the Diwan of Royal Court.
[edit] Training & Omanisation
In order to meet the training and Omanisation requirements of the banking sector, the Omani Institute of Bankers was established in 1983 and has since played a leading role in increasing the number of Omanis working in the sector. The Central Bank monitors the progress made by the commercial banks with Omanisation and in July 1995 issued a circular stipulating that by the year 2000, at least 75% of senior and middle management positions should be held by Omanis. In the clerical grades 95% of staff should be Omanised and 100% in all other grades. At the end of 1999, no less than 78.8% of all positions were held by Omanis which is a considerable achievement for the banking sector in general. Women made up 30% of the total. During 1999 the percentage of Omanis employed at senior and middle management levels went up from 76.7% to 78.8%. There was a slight increase in the clerical grade percentage to 98.7%, while the non-clerical grades had already reached 100% Omanisation in 1998. The banking sector currently employs 2,113 senior and middle managers supported by 4,757 other staff.
The Ministry has issued a decision regulating tourist guides, who in future will be required to have a licence. This Ministerial decision aims at encouraging professionalism in the industry as well as providing career opportunities for Omanis who will be encouraged to learn foreign languages so as to replace foreign tour guides. In January 1996, a major step forward in the training of Omanis in the hotel industry came with the opening of the National Hospitality Institute (NHI). The Institute is a public company quoted on the Omani Stock exchange. In February 1997, the first batch of 55 male and female trainees, sponsored by the Vocational Training Authority, were awarded their first level certificates and were given on-the-job training in several hotels. In May 1999, the fourth batch of 95 trainees obtained their NVQs, bringing the number of Omanis trained by the Institute to around 450. Omanis now make up 37% of the 34,549 employees in the hotel and catering business, which exceeds the Omanisation target of 30% set by the Government. The NHI has also trained catering staff from the Sultan’s Armed Forces and has launched a two year tour guide course, which includes language training, safe driving, first aid and a knowledge of local history and geography.
[edit] Investment
The stock market capitalisation of listed companies in Oman was valued at $15,269 million in 2005 by the World Bank.[1]
[edit] Statistics
Household income by percentage share:
lowest 10%: NA%
highest 10%: NA%
Industrial production growth rate: 5.9% (2006 est.)
Electricity - production: 14.33 billion kWh (2004)
Electricity - production by source:
fossil fuel: 100%
Electricity - consumption: 13.33 billion kWh (2004)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products: dates, limes, bananas, alfalfa, vegetables; camels, cattle; fish
Exchange rates: Omani rials per US dollar - 0.3845 (2005), 0.3845 (2004), 0.3845 (2003), 0.3845 (2002), 0.3845 (2001)
[edit] See also
[edit] References
[edit] External links
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