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Oman Oman -- The Economy
Omani economic development may be divided into three
phases:
a period of rapid expansion between 1970 and 1986;
economic
retrenchment and rationalization between 1986 and 1989 as
a
result of the 1985-86 oil price collapse; and a period of
stabilized growth since 1990. Economic growth and
structural
change have proceeded rapidly in Oman during the rule of
Sultan
Qabus ibn Said. Oman, however, lagged behind such
neighboring
gulf amirates as Kuwait and the UAE as a result of the
late
discovery of oil, financial constraints, and political
instability in the first half of the 1970s. Nonetheless,
increased government expenditure as a result of the
commercial
production and export of oil transformed the standard of
living
in Oman. By the latter half of the 1980s, Oman emerged as
a
middle-income country after entering the development
process as
one of the poorest Arab states. Per capita income rose
from
US$360 in 1970 to US$3,140 in 1980 and to US$7,000 in
1991.
When Sultan Qabus ibn Said assumed power in 1970, he
immediately implemented an economic development and
modernization
program. Priority was given to expanding the country's
almost
nonexistent infrastructure. In the early 1970s,
substantial
progress was made in developing physical and social
infrastructure, mainly in the form of roads, a new
deepwater
port, an international airport, electricity-generating
plants,
desalination plants, and schools, hospitals, and low-cost
housing. Government revenue derived almost exclusively
from oil
receipts made this possible.
Economic growth was accompanied by uneven structural
development, however. In 1960 agriculture accounted for 75
percent of the gross domestic product
(GDP--see Glossary);
by Oman's fiscal year 1991, its share had fallen to less than
3 percent. By contrast, industry (including petroleum),
which accounted for only 8 percent of GDP in 1960, increased to
59 percent by 1985. Manufacturing increased only from 1
percent to 3 percent and services from 18 percent to 38 percent in the
same period.
As a result, in 1993 Oman's economy was dominated by
the
petroleum sector and the services sector. Aware of the
vulnerability produced by dependency on a depletable
natural
resource, the government has increased funding for sectors
based
on renewable natural resources that can provide
sustainable
economic growth. The government is concentrating on the
agriculture and fishing sectors, encouraging tourism, and
constructing light industrial parks with the objective of
exporting consumer goods to its Gulf Cooperation Council
(GCC)
partners.
Data as of January 1993
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