The Omani economy is undergoing a transition that started in 1976 with the first five-year plan, the first step of a long-term development project ordered by Sultan Qaboos bin Said and known as Oman Vision 2020. The plan has a number of targets: economic and financial stability, reforming the government’s role in the economy and freeing up the private sector, making the Omani economy a global economy, training the workforce and modernizing the country. But the heart of Oman Vision 2020 is also diversifying public revenue, which is still too reliant on oil.
The government continues to invest in efforts to diversify the economy, especially by expanding tourism, industry, manufacturing and privatization. As for resource extraction, in addition to oil and natural gas, Oman also produces chromium, copper, gold and silver. Agriculture, although benefiting from robust government support, is hampered by issues with the land and climate. Most of the dates and citrus fruits produced locally are exported, while grains, tobacco and fresh produce feed the domestic market. Raising livestock (goats, sheep, cows and camels) is traditional and often complimentary to agriculture. Omani camels are considered by many to be the best specimens of the Arabian Peninsula. Fishing is also widespread, while industrial growth has mostly centered on metalworking (mainly copper), chemicals, textiles and cement.
One of the targets of the sultan’s strategic vision is to make Oman attractive to foreign investors. The World Bank’s 2016 ranking of easiest countries to do business in places Oman 70th, beating Tunisia and Morocco, but behind Bahrain and Qatar. In its favor, the country boasts strong protections of private property, one of the region’s lowest tax rates (there is no personal income tax, while the corporate tax rate is 12%) and import/export (the sum of all imports and exports is valued at 115% of Oman’s GDP). In 2016, the Tanfeedh program was introduced, consisting in 121 initiatives to be implemented by 2017 in order to improve the economic climate and attract investments.
Another lynchpin of Oman Vision 2020 is privatization. In 2016, the sultanate created a series of holding companies, to which it transferred shares in many state companies. In the meantime, the Pubic Authority for SME Development (PASMED) continues its work. The entity was established in 2013 for the purpose of encouraging the growth of the private sector through business teaching in schools, encouraging technology transfer between large companies and startups, securing access to credit for SMEs and assisting them in the development of their growth and sustainability strategies.
The sultanate is making many efforts on the employment front. The International Labour Organization (ILO) estimates that Oman’s unemployment rate is 20%, a serious problem in a nation with almost 40% of its citizens under the age of 25. The population boom demands housing solutions and a higher standard of living, so Oman finds itself in with the necessity to create 45,000 jobs per year in order to meet this demand. "Omanization” laws have been passed, imposing local hiring quotas on private businesses. But this may not be enough to improve economic conditions and attract investors.