Oman – Diversification drive (PDF)

An Oman Ministry of National Economy document outlined plans to reduce Oman’s reliance on the oil sector from 41.5% of GDP in 2007 to 9% of GDP by 2020. The plan identifies doubling income from industrial activities as one of the key drivers of the diversification plan.

The aim is to increase Oman’s industrial sector contribution from 14.3% of GDP in 2007 to 29% by 2020, while also raising the service sector contribution from 40.5% in 2007 to 46.9% by 2020. The target for the gas sector contribution is 10% by 2020 from 3.8% in 2007, while the share of agriculture and fishing is expected to increase to 5.1% from 1.3% over the same period. In 2008 Oman’s GDP reached USD 59.87bn with the non-oil sector contributing to 15.2% of total growth. The paper states that “The sources of national income will be diversified, with the non-oil sector assuming the primary role”. Oman’s diversification plans follow a pattern in other GCC countries, as oil exporters look for ways to create jobs for their young populations, and establish economies less reliant on the cyclicality of oil. We view diversification as a necessary step for hydrocarbon reliant economies like Oman to establish more sustainable economic growth, while the focus on the more “labor intensive” industrial sector will offer more job opportunities for Omani nationals, than those currently available from the existing capital intensive energy sectors.