Sultanate of Oman Economy

Omani citizens enjoy good living standards, but the future is uncertain with Oman's limited oil reserves.[12] The other sources of income, agriculture and local industries, are small in comparison and count for less than 1% of the country's exports. Agriculture, often subsistence in its character, produces Dates, Limes, Grains and vegetables. Less than 1% of the country is under cultivation but, in general, food has to be imported. Industries contribute only with 4%, but there are governmental plans to increase this.
Oil production is extracted and processed by Petroleum Development Oman. In recent years, proven oil reserves have been holding approximately steady, although oil production has been decreasing.[13][14] Oman has other mineral resources including Copper, Asbestos and Marble, but this is little exploited.

[edit] Oil and gas
Commercial export of oil began in 1967 and since Sultan Qaboos' accession to the throne in 1970, many more oil fields have been found and developed. In June 1999, PDO discovered a new oil field in southern Oman after drilling and testing three wells which demonstrated the commercial viability of the reservoir. This is the most significant find in five years. Work is continuing on the RO 503.876 million ( US$1,300 million ) oil refinery project in Sohar, which was due to go into operation in 2006 with a 116,400 barrels a day refining capacity. In 2004, Oman Oil Refinery was supplied with about 78,200 barrels a day for refining, while PDO began using steam injection technology in several wells to increase their productivity. Oman's future economy is expected to depend on Sohar, which is growing very fast.
Since the slump in oil prices in 1998, Oman has made active plans to diversify its economy and is placing a greater emphasis on other areas of industry, such as tourism and natural gas. Oman's Basic Statute of the State expresses in Article 11 that, "The National Economy is based on justice and the principles of a free economy."

[edit] Mineral resources
Oman's mineral resources include chromite, dolomite, zinc, limestone, gypsum, silicon, copper, gold, cobalt and iron. Several industries have grown up around them as part of the national development process which, in turn, have boosted the minerals sector’s contribution to the nation’s GDP as well as providing jobs for Omanis.
Copper has been mined in Oman for thousands of years. The mineral sector’s operations include mining and quarrying. Several projects have recently been completed including: an economic feasibility study on silica ore in Wadi Buwa and Abutan in the Wusta Region, which confirmed that there were exploitable reserves of around 28 million tonnes at the two sites; a feasibility study on the production of magnesium metal from dolomite ore; a draft study on processing limestone derivatives; a project to produce geological maps of the Sharqiyah Region ; economic feasibility studies on the exploitation of gold and copper ores in the Ghaizeen area; a study on raw materials in the wilayats of Duqm and Sur for use in the Sultanate’s cement industry; and a study on the construction of a new minerals laboratory in Ghala in the Governorate of Muscat.

[edit] Industry
The industrial sector is a cornerstone of the Sultanate’s long-term (1996-2020) development strategy. Industry is not only one of the main sectors involved in diversifying the sources of national income and reducing dependence on oil; it is also capable of helping to meet Oman’s social development needs and generate greater added value for national resources by processing them into manufactured products.
The Seventh Five-Year Development Plan creates the conditions for an attractive investment climate. Under its strategy for the industrial sector the government also aims to develop the information technology and telecommunications industries. The Knowledge Oasis Muscat complex has been set up and expanded, and Omani companies are developing their technological potential through collaboration with various Japanese and German institutions.
There is also an industrial estate in Sohar - where the Sultanate’s heavy industries are based - as well as other estates in Sur, Salalah, Nizwa and Buraimi. Natural gas is transported to the industrial estates in Sohar and Salalah, helping to promote expansion of those industries that depend on natural gas; the government grants these industries tax exemptions, as an incentive to encourage their expansion and development. By 2020 the industrial sector is expected to contribute 15% to the country’s GDP.

[edit] Development plans
The Omani economy has been radically transformed over a series of development plans beginning with the First Five­-year Plan (1976-1980). At Sultan Qaboos's instruction, a vision of Oman's economic future up to the year 2020 was set out at the end of the first phase of the country's develop­ment 1970-1995. Vision 2020, outlined the country's economic and social goals over the 25 years of the second phase of the development process (1996­-2020).
Oman 2020, held in June 1995, has developed the following aims with regard to securing Oman's future prosperity and growth:
To have economic and financial stability
To reshape the role of the Government in the economy and to broaden private sector participation
To diversify the economic base and sources of national income
To globalize the Omani economy
To upgrade the skills of the Omani workforce and develop human resources
A free-trade agreement with the United States took effect 1 January 2009, eliminating tariff barriers on all consumer and industrial products. It also provides strong protections for foreign businesses investing in Oman.[15]

[edit] Tourism
Main article: Tourism in Oman

Al-Bustan Palace Hotel
Oman is known for its popular tourist attractions. Wadis, deserts, beaches, and mountains are areas which make Oman unique to its neighboring GCC nations (Wadis in particular). With a coastline of 1700 km, Oman offers some of the cleanest, most stunning beaches a visitor could hope to see. Few beaches are private, except some attached to the beach resort hotels, or those adjoining military or official property. Weekend picnics and barbecues are popular on the beach. Many coves are perfect for snorkelling and with fairly gentle shelves, are good for children.Wadis are green, lush oases of palm trees, grasses, and flowering. Some wadis have year-round running water, with deep, cool pools in which it is quite safe to swim if the currents are slow.Falaj (pl. aflaaj) means a system for the distribution of water and is commonly used to describe the irrigation channel system downstream of the water's source.Some aflaaj in Oman were built more than 1,500 years ago, whilst others were built at the beginning of the 20th century. The genius of the Omani builders is evident in the way they tunnelled into the ground to a depth of dozens of metres in order to gain access to the groundwater. These channels were truly a miracle of engineering at a time when mechanical equipment was not available. Forts and Castles are Oman's most striking cultural landmarks and, together with its towers and city walls, they have historically been used as defensive bastions or look-out points. Forts were often the seats of administrative and judicial authority. There are over 500 forts, castles and towers in Oman which has a coastline of 1,700 km, so they were needed to protect it from potential invaders. The architectural styles vary, being determined by the architects who built them or the periods in which they were built.The traditional Arabic market place is called the souq and these are found in many of the towns throughout the Sultanate. One of the oldest preserved souqs in Oman is in Muttrah, on the Corniche. Gold and silver jewellery is found in abundance as well as numerous wooden carvings, ornaments and spices. Muttrah souq is a maze of pathways leading in and out of each other. 'Household' goods make up the bulk of the souq, but browsing through some of the smaller shops may result in a lucky find. Bargaining is a must, however. Gold and silver are well priced and mainly sold by weight. Good buys are silver khanjars (the traditional Omani dagger, worn by men) and incense burners. Today,the Capital area has a number of shopping malls, mainly situated in Qurum, but in recent times, spreading to the Al Khuwair area, which house a variety of shops, ranging from boutiques to chain stores. The largest mall in the country is the Muscat City Centre. Other popular tourist activities include sand skiing in the desert, Scuba Diving, Rock Climbing/Trekking, Surfing & Sailing, Cave Exploration and Bull Fight/Camel Race.The Muscat Festival is usually held at the beginning of every year. During this event, traditional dances are held, temporary theme parks open, and concerts take place. Another popular event is The Khareef Festival, which is similar to Muscat Festival; however it is held in August in Salalah, Dhofar. During this latter event, mountains are packed as a result of the cool breeze weather during that period of time which rarely occurs in Muscat.

[edit] Labour
The estimated workforce was 920,000 in 2002. A large proportion of the population were still engaged in subsistence agriculture or fishing. The skilled local labour force is small, and many of the larger industries depend on foreign workers from Pakistan, Bangladesh, the Philippines, India, and Sri Lanka — foreign laborers constituted over 80% of the modern-sector workforce in 1996.
Omani law does not provide the right of union formation. The law forbids a strike for any reason. Collective bargaining is not permitted, however there exist labour-management committees in firms with more than 50 workers. These committees are not authorized to discuss conditions of employment, including hours and wages. The Labour Welfare Board provides a venue for grievances.
The minimum working age is 13, but this provision is not enforced against the employment of children in family businesses or on family farms. The minimum wage for non-professional workers was $260 per month in 2002. However, many classes of workers (domestic servants, farmers, government employees) are not required to receive the minimum wage and the government is not consistent in its enforcement of the minimum wage law. The private sector working week is 40 to 45 hours long, while government officials have a 35-hour working week.

[edit] Inflation
As oil prices have risen to a record high, so has inflation. The government depends mostly on oil revenue, more than on tax returns from companies and other government-owned companies. The government is also Oman's largest employer, so the high interest that government gets increases the prices of food and construction equipment. The government did support the fuel prices so it doesn't increase the inflation and to make the price suitable for people on low wages.
In 2006, government employee salaries were increased by 15%, placing Oman in the category of high-medium income countries.[citation needed] and a year after increase employees' were also increased in salaries so, employees with low wages have a higher increase that may go up to 48% and employees who earn more get a lesser increase in their salaries which end at 5%. The minimum wage has been changed from 120 Rial a month to 140 Rials because of high records of inflation driven by high prices of oil.