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The
Sultanate of Oman is witnessing a major economic boom thanks to the
high oil prices and an all round feel good factor. The Government is
currently diversifying Oman’s economic base with a view to reduce
its predominant dependence on Oil. The Sultanate of Oman is one of
the most progressive countries in the Middle East and enjoys a
healthy relationship with all the countries in the GCC and the rest
of the world. Oman’s open and pragmatic policies have created a
changing demographic profile with major foreign direct investments
in infrastructure and tourism. The Government continues to promote
initiatives in privatization and also building enterprises with
minimum economies of scale. This initiative is likely to result in a
number of consolidation and cross border initiatives. The Government
has also confirmed its acceptance to WTO regulations and has built
in a strong legal and regulatory framework which permits a
transparent and healthy conduct of business in Oman.
As per the
Central Bank of Oman's (CBO) report for 2006 the government's
healthy economic position yielded an impressive macro economic
environment. "The robust economic growth was characterized
by large surpluses in the fiscal and balance of payments positions,
low and declining levels of public debt, comfortable levels of
foreign exchange reserves, easy domestic liquidity conditions, high
growth in bank credit, stong momentum in creation of employment
opportunities for Omanis, a sound and growth supportive banking
system and remarkable progress on economic diversification.". Nominal GDP growth of 15.6% in 2006
represented high growth for the third consecutive year. Significant
progress on diversification was evident from 34.9% growth in
non-petroleum activities as well as 46.3% increase in non-oil
exports of Omani origin. The healthy fiscal position of the
government was a hallmark of the vastly improved macroeconomic
climate of Oman as per the CBO report. The sound fiscal environment
was characterized by sustained surpluses, growing transfers for
creation of increasing financial assets, declining debt as a
percentage of GDP and expenditure re-orientation in favor of higher
capital expenditure. The capital expenditure registered a high
growth of 24.1% and the progress on internal debt consolidation was
evident in the gradual decline in government debt as a percentage of
GDP from 16.3% in 2002 to 8.2% in 2006.
The Sultanate’s
Vision 2020 plan envisages a sustained strong annual GDP growth of
7.4%. The macroeconomic factors are healthy and offer a strong and
healthy platform for doing business in the Sultanate of Oman and
using Oman as the window for expanding further into the rest of the GCC. |
