In Muscat they are predicting national day celebrations to beat all others this year. The 18th November 2000 marks the 30th anniversary of Sultan Qaboos bin Said’s accession to power and the beginning of the period Omanis refer to as ?the Renaissance’.

In the past three decades Sultan Qaboos, who celebrates his 60th birthday this year, has steered Oman from impoverished obscurity to its present day position among the developing world’s most rapidly growing economies. By the standards of most other GCC states Oman enjoys relatively modest energy resources. With this in mind, Sultan Qaboos has, throughout his reign, actively encouraged diversification of the economy away from oil revenue dependency. The folly of total economic dependency on the volatile world oil market was discussed decades ago when Oman first began exploring viable alternatives. These efforts have paid dividends and Omanis are now reaping the benefits of a broader-based economy. ?Many Gulf oil producing states were paying lip service to the concept of diversification of their economies back in the 1970s but their enthusiasm waxed and waned with the fall and rise of world oil prices,? explained a local economist.

When Sultan Qaboos first came to power in 1970, the task facing him was immense

Oman however, consistently showed real commitment to the idea. When Sultan Qaboos first came to power in 1970, the task facing him was immense. Oman’s economy at that time was based on subsistence agriculture and fishing. There were only three schools, two hospitals and 10 kilometres of tarmaced road in the entire country. The early years of his reign saw a massive development programme, utilising the income from oil, which had been accumulating since commercial production began in the country in 1967. By 1975 a sizeable infrastructure had emerged. Schools, hospitals, clinics, roads and houses were built and a welfare system introduced, meanwhile, girls attended schools for the first time. With its infrastructure in place Oman was able to begin looking outward and thinking about its future economic development. New seaports were constructed; two new airports opened to serve the capital of Muscat and Salalah in the south; postal and telecommunications services were established and in 1974 an earth satellite station linked Oman with the rest of the world.

While oil continues to be the lynchpin of the Sultanate’s economy other sectors, including liquid natural gas (LNG), manufacturing, ports and telecoms, are all registering impressive successes and have become an inspiration to those seeking to establish a broader based economy.

Diversification will continue to be a priority despite the massive increase in oil earnings witnessed over the past 18 months or so. Speaking to The Middle East, the Under Secretary for Economic Affairs at the Ministry of National Economy, Abdulmalik Al Hinai observed: ?Diversification of the economy has been and will continue to be a major policy goal for Oman ? in the medium and long term and with corresponding corrollaries in the short term as well. Oman has regularly witnessed the booms and busts in oil cycles in her post-Renaissance development experience. The present upswing phase in oil prices started from the middle of 1999 but was immediately preceded by a severe slump in oil prices, when they reached a 10 year low. The goal of diversification has to be constantly and relentlessly pursued, over the crests and troughs of oil prices, and never lost sight of.?

Oman’s entry into (WTO) the will place increased emphasis on a dynamic, export-led growth strategy, and a quickening tempo of economic growth

Oman’s blueprint for future economic development, Vision 2020, aims to attain growth on a par with the newly industrialising Asian economies. The current five year plan (1996-2000) also reflects the Vision priority of diversification. One of the plan’s major achievements has been the $2.5 billion LNG project and its completion on schedule. The LNG project is expected to provide a Balance of Payments support of $500 million this year from exports of 2.2 million tonnes of liquified gas as well as 50,000 barrels a day of condensates, Abdulmalik Al Hinai confirmed.

With Oman’s imminent entry into the World Trade Organisation (WTO) the Sixth Five Year Development plan, to be launched next year, will place increased emphasis on a dynamic, export-led growth strategy, and a quickening tempo of economic growth.

The development of Oman’s non-oil segment, including the natural gas sector, stimulation of private, domestic and foreign investment and the promotion of competitive efficiency, are expected to be the focus areas of Oman’s development strategy in the new millenium.

Oman is actively pursuing foreign participation in local projects

Privatisation is the buzz word in Muscat these days. A number of large scale enterprises have already been identitifed and others are expected to be announced soon. Plans are afoot to change the law to allow 100 per cent foreign ownership in certain areas of the financial services sector by January 2003 and will increase the level of overseas investment allowed for domestic ventures with a capital of not less than OR150,000 to 70 per cent in January 2001, a considerable improvement on the current level of 49 per cent.

Currently, 100 per cent foreign ownership is permitted only for projects capitalised at OR500,000 or above and considered to be of economic importance to Oman.

Sultan Qaboos has repeatedly confirmed his approval of a more outward looking policy and told The Middle East back in 1998: ?The general development of the economy has now reached the stage of strength and flexibility where increased emphasis can be placed upon other elements of the national economy, notably the private sector.?

Oman is actively pursuing foreign participation in local projects and marketing itself overseas with the help of the Omani Centre for Investment Promotion and Export Development (OCIPED). The organisation was established in 1996 to improve the Sultanate’s balance of trade by maximising the contribution of private sector investment and promoting Omani exports. OCIPED is a one stop shop for potential investors in the Sultanate and provides a vital link between local producers and international buyers.

?The main challenges facing Oman, as with every other country in the world, is the globalisation of the world economy. The technological revolution particularly in the area of telecommunications and information technology is generating a whole series of opportunities and threats for Oman and its business?, an OCIPED official explained.

So, how will Omani industries compete in this global enviroment? OCIPED believes successfully. ?It is the market that determines the competitiveness in industry. With globalisation, geographical distances do not seem to matter and boundaries seem to have disappeared in this global village. Omani industries have to take up this challenge and become competitive in view of excellent government mechanisms, which provide free economy, excellent infrastructure and a hassle free environment,? the OCIPED official observed.

While much has been achieved in the last 30 years, challenges remain. One of the greatest facing Oman currently is to provide gainful employment for its burgeoning young population. Omanisation of the work force, which has registered considerable success, according to official sources, is intended to alleviate the problem. Sultan Qaboos, told The Middle East: ?I have been very conscious of the paramount necessity to provide our young men and women with satisfying careers following their years of hard work in the educational system to fit themselves for a full life.

?This country, over the past years has had a high birth rate, resulting in about 50 per cent of our population being under the age of 16. This has required a sustained and energetic drive, not only to increase the employment available in the private sector but to provide the type of jobs and career prospects that these young people will expect to have.

Salalah Port has accomplished privatisation, has accomplished diversification and we have been the most successful private company in achieving Omanisation

?To meet this requirement is, as you can imagine, a vital and demanding task, and will remain so, but I believe that these opportunities are being adequately provided for our young people, and with the development across the board of Oman’s industrial base and our growing need for those with specialised technical qualifications we have every reason to be soberly optimistic for the future.?

However, one man at the cutting edge of Omanisation, who believes more must be done is Jack Helton whose expertise has done much to ensure the success of the multi-billion Salalah Port project, of which Omanis are so proud.

The private sector is currently struggling to meet the cost of employing frequently inexperienced Omanis

?It is the largest privatisation project in Oman and people have every reason to believe it should be the role model for further privatisation; it has accomplished privatisation, it has accomplished diversification and we have been the most successful private company in achieving Omanisation. We started with an Omani workforce of 61 per cent and are currently at 56 per cent?.

However, if Salalah Port is to continue to attain a similar level of success, Jack Helton believes the issue of Omanisation must be seriously addressed by the government. ?We are happy to employ Omanis but they are going to have to be skilled before we take them on in future, otherwise, as a private sector company we are at a disadvantage. There is a problem of unemployment in this country but it can not be solved by making the private sector pay overly high wages for the value they get from untrained Omanis.?

Mr Helton says the private sector is currently struggling to meet the cost of employing frequently inexperienced Omanis at anywhere between 25 and 40 per cent more than the cost of expatriate labour in order to achieve Omanisation targets. ?The sooner Oman comes to grips with the fact that in order to successfully compete in a global environment they must invest more in training their young people the better off, both socially and financially, everyone will be.?

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