OMAN
Economy
Economy
Economy
General
Oman has a free market economy in which the government does not play a major role. It was mainly an agricultural country. A large proportion of the working population earns its living from agriculture and fisheries. However, this sector only contributes less than 2% to the gross national product. (2017)
Before 1970, Oman was economically isolated from the rest of the world and most of its income came from the export of dates, limes and fish. Therefore, there was not much money to improve things like infrastructure, education and health care.
This changed drastically after 1970 when the income from the sale of oil came in. Because the oil reserves are not very large, other sources of income are being sought, such as natural gas, agriculture, fishing, new industries and tourism. The government has also been trying to improve the climate for foreign investment to offset the expected decline in oil revenues.
Oman's state revenues now depend for more than 75% on oil and natural gas sales. Oman itself has only one oil refinery. Due to the rapid development of the economy, there was soon a shortage of labour. These were recruited en masse from abroad. Through better education, many Omanis are now eager to participate in the labour process. Women are also starting to enter the workforce. Efforts are now being made to greatly reduce the number of foreign workers; this process is called "omanisation". Every year, the maximum number of foreigners allowed to work in each branch of industry is determined.
Oil and natural gas
In August 1967, the first oil was exported. Since 1970, many new oil fields have been discovered, and in 1996, 853,000 barrels per day were produced from 93 fields. The oil reserves are not very large and probably only exploitable for another 20 years. Efforts are now being made to discover new fields in the sea. Exports are mainly to Japan, South Korea and China. In the last few years of the last century, a number of new seaports were built, such as Mina Qabus, Mina Raysut and Mina al Fahal, where oil tankers of all tonnages can enter.
During the search for the oil, large gas bubbles were discovered. The reserves amount to at least 27 trillion cubic feet. The Oman Liquefied Natural Gas Project provides a capacity of 6.2 million tonnes, making it one of the largest development projects in the world. Rapid economic growth has enabled construction of liquefied natural gas and petrochemical plants to begin.
Industry, mining and trade
Industry, too, became important to Oman's economy only after 1970. Due to the large infrastructure projects and building projects, the construction sector in particular grew very fast in the early 1970s. In 1983, the first real industrial area was established in Rusayl. At present, there are more than 100 factories there, including those for furniture, cement, textiles and even a date factory. Since then, a series of new industrial areas have been built, encouraged by the interest-free loans and subsidies given to companies and investors. Oman is rich in minerals and mining could become a major economic sector. Copper has been mined for 5000 years and recently new reserves of copper ore have been discovered. Gold and silver are also mined in the same area (Yanqul). Chromium is exported mainly to Japan and China.
Furthermore, there are reserves of coal, gypsum, limestone, iron, nickel and manganese. The formerly flourishing indigo dyeing industries have almost all disappeared with the advent of much cheaper synthetic paints. Traditional boatbuilding is still done in Oman. The shipyards of Sur are famous. On these yards, "dhows" are built, different types of Arabian ships. As a trade centre, Oman has always been important for the copper and seaweed export. Oman is the world's only supplier of incense. The trade in Arabian thoroughbred horses also made Oman famous. Today, the main exports are oil, natural gas, copper, fish and agricultural products. Imported products are mainly foodstuffs, trucks and machinery. Oman exported $103 billion to mainly China, the UAE and South Korea in 2017. Oman imported $24 billion from mainly the United Arab Emirates, United States and Brazil in 2017.
Agriculture, livestock and fisheries
For a long time, fishing and agriculture were Oman's only source of income. Today, about 200,000 people are employed in agriculture, while almost 800,000 people own land to a greater or lesser extent. A total of 100,000 ha is suitable for agriculture and currently 60% of it is actually in use. In the fertile Batinah plain many limes are grown and about 10 million date palms. Dates (yielding approx. 160,000 tonnes per year) are mainly for domestic consumption. Almost everything from the dates is used: dates, seeds, wood, branches and fibres.
Also growing here are mangoes, strawberries, onions, wheat, alfalfa, tobacco, aubergines and peppers. Around the high mountain Jebel Akhdar one grows roses for the famous rose water. In the southern Dhofar we find coconut palms, incense, banana and papaya trees, among others.
Oman invests a lot of money in modern agricultural techniques to increase and improve the quantity and quality of the products. These include irrigation techniques, experimental farms and afforestation projects to combat erosion. Farmers are also supported by agricultural banks with loans and subsidies. The aim is to minimise dependence on foreign sources of food. Despite modern irrigation techniques, the "aflaj", a network of more than 4,000 overhead and underground irrigation canals, has been used for many centuries.
Livestock farming is practised by the nomadic tribes in the interior and in Dhofar. Cattle breeding is also being modernised (e.g. k.i. machines) and much attention is being paid to animal welfare. Livestock includes sheep, cattle, goats and camels, together about 700,000 head. This means that Oman has a leading position in the Arabian Peninsula as far as livestock is concerned. Meat production is mainly for the domestic market, but not yet sufficient to meet total domestic demand. Fishing is Oman's main source of income after oil exports. Here, too, huge investments are being made to modernise this industry.
Sources
Callan, L. / Oman & United Arab Emirates
Lonely Planet
Foster, L.M. / Oman
Children’s Press
Medani Elsayed, M. / Reishandboek Oman en de Verenigde Arabische Emiraten
Elmar
Van Deuren, G. / Oman, Verenigde Arabische Emiraten
Gottmer/Becht
CIA - World Factbook
BBC - Country Profiles
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