OMAN COUNTRY PROFILE
Key Facts
Location: Oman is in the Middle East, bordering the Arabian Sea, Gulf of Oman, and Persian Gulf, between Yemen and UAE
Capital city: Muscat
Total Area: 309,500 sq km
Population: 3,418,085 (July 2009 est.)
Currency: Omani Rial
GDP: $52.58bn (2008 est.)
GDP Growth rate: 6.4 per cent (2008 est.)
Languages: Arabic (official), English, Baluchi, Urdu, Indian dialects
Ethnic make-up: Arab, Baluchi, South Asian, African
Religions: Ibadhi Muslim 75 per cent, other 25 per cent
Introduction
Perched on the south east coast of the Arabian Peninsula, Oman, under the enlightened leadership of H.M. Sultan Qaboos Bin Said, has been encouraging market-oriented policies and private sector development as the mechanism for prosperity and growth. Consequently, Oman has emerged as a modern state with world class infrastructure in transport and communication, and the government and people continue to forge confidently ahead along the path of comprehensive development in political, economic and social sectors.
Oman has achieved remarkable growth in all sectors of economy during recent years. Though oil remains single most important source of revenue, the expansion of non-oil sector is expected to make the growth and development process of Oman more sustainable in the long run.
There are several positive features in the economic policy and environment of Oman that encourage the flow of investment into Oman. The government is continuously engaged in making the investment climate as conducive and investor-friendly as possible. Oman's Foreign Capital Investment Law has been liberalised, permitting 70 per cent foreign participation in companies automatically in most of the sectors and even 100 per cent foreign capital investment is permitted for projects of national importance. The law on income tax for companies has been amended providing for completely non-discriminatory treatment between fully Omani owned companies and other companies incorporated in Oman irrespective of the extent of foreign participation. In the Ministry of Commerce & Industry, a facility for assisting both domestic and foreign investors to obtain all required clearances - quickly and from one window - has been established.
Investment climate and opportunities
The government of Oman is undertaking many development projects to modernise the economy, improve the standard of living, and become more active the global marketplace. Oman joined the WTO in 2000, and continues to amend its commercial practices to conform to international standards. Oman continues to pursue, through the Gulf Cooperation Council, free trade agreements with key trading partners, including the EU and India.
Oman’s economy has remained strong, not only due to the continued strength of international oil prices, but also due to various diversification activities. The economic diversification program made headway with the commissioning of many mega gas-based projects including Oman Polypropylene, Oman Methanol and Sohar Aluminium and several other projects are expected to go on stream shortly.
The UK exported £268m worth of goods to the Sultanate of Oman in 2007.
Key sectors for exporters
Transport equipment
Telecommunications
Power-generating machinery
Electrical equipment
Scientific instruments
Chemicals and pharmaceuticals
Sectors up-close
Power and Water
The state-owned Oman Power and Water Procurement Company (OPWP) aims to boost power generation capacity in the Sultanate by around 3,200 MW through the development of four new Independent Water and Power Projects (IWPPs). The privately financed projects — planned at Barka/Sohar, Duqm, Ghubrah and Salalah — are targeted to be brought into commercial operation over the 2010- 2015 timeframe. The single largest among these is an IWPP-proposed to be established either in Barka or Sohar. It will have a generation capacity of 1,300 MW and a water desalination component of 55,000 cubic metres per day.
The first of the four new power projects lined up by OPWP for development and actual implementation will be the 400-430 MW and 15 MIGD capacity Salalah IWPP. OPWP has received bids from three consortiums. The plant is scheduled to be brought on stream during 2010-11.
Telecommunications
Omantel remains the sole operator in Oman’s fixed-line market, its monopoly also extending to the provision of internet and broadband sectors. Oman’s regulator suggests there were 273,997 fixed lines in operation at the end of March 2008, up from 268,065 at the end of 2007. The recent fixed-line growth may be related to Omantel’s emphasis on expanding the availability of fixed wireless services. Analysts are predicting further increases in the number of fixed lines in the future, with the expansion of fixed wireless services accounting for most of this growth. Broadband growth continues to be steady. In 2008, Omantel said it would invest OMR10mn (US$26mn) expanding its broadband network to meet rising demand.
The telecoms market offers ample opportunity for investors if recent evidence is anything to go by. In June 2008 Dubai-based Friendi Mobile won a licence to operate as a third mobile service provider in Oman. Friendi will operate in the country as an MVNO by renting space on existing networks. Also in 2008, Oman’s telecoms regulator issued mobile reseller licences to five additional companies - Injaz International, Kalem Telecom, Majan Telecom, Mazoon Mobile and Arab Link.
Pharmaceuticals
Oman's drug market is small, but growing rapidly. Between 2008-2013, pharmaceutical expenditure is forecast to grow at more than 8 per cent, in nominal terms, this growth being driven by demographic change in Oman, which should see the population rise from 2.7m in 2008, to 3.2mn in 2013. The decision by Oman's Ministry of Health to tighten controls on the approval of herbal medicines appears to have had a regional impact. Showing the trend for regulatory harmonisation across the Gulf, the Gulf Cooperation Council (GCC) is ready to draft a regional law to regulate alternative and traditional medicines. This is expected to include requirements for the registration of traditional medicine practitioners and approval of herbal medicines. Despite the sharp downturn in oil prices, Oman is set to increase its budgetary expenditure in 2009 by almost 20 per cent. Given that public resources making up the majority of health spending in the sultanate, this spells good news for the health and related pharmaceuticals sector.
