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A Mosaic of Stability, Beauty and Potential

Muscut Royal Opera House Paasikivi

Oman is considered one of the oldest independent states in the Middle East region. The country continues to be quite invisible in the media which reflects its political and economic stability. There is a lot, however, to be learnt about Oman’s traditions and culture, social structure and the way economy was developed. In terms of natural resources, especially oil reserves, Oman possesses less than other countries of the Gulf Cooperation Council (GCC). The 18th of November every year marks the National Day of Oman since 1970, when the accession of His Majesty Sultan Qaboos Bin Said Al Said started and the establishment of the Sultanate of Oman took place.

The government, however, put great emphasis on driving its economic growth through diversifying the goods and services produced in the country. For example, the main focus of the eighth five-year plan (ending this year) was on increasing the government spending on key infrastructure projects, which are expected to enhance Oman’s status as a logistics hub in the region, benefiting from its strategic position. Oman is a member in the Organisation of Islamic Cooperation (OIC) since 1972, the GCC since 1981 and the World Trade Organization since 2000. It also signed a free trade agreement with the United States in 2006.

Oman’s economy continues to develop and is ranked highly among Gulf nations. While the economy has grown in several phases, the main drivers of growth have been the reforms that were implemented by successive governments and the continuation of authority within Oman. Despite these improvements, there are several challenges to a more rapid growth within the economy. For example, there are also large parts of the country that are still isolated due to the lack of development in infrastructure. Nevertheless, the fact that Oman’s economic development has come a long way since the 1970s proves that the government will be able to overcome these challenges and push forward the process of economic development.

According to heritage.org, Oman’s economic freedom score is 66.7, making its economy the 56th freest in the 2015 Index. Its score is 0.7 point lower than last year due to declines in the management of government spending, trade freedom, and freedom from corruption that outweigh improvements in four of the ten economic freedoms, including property rights and monetary freedom. Oman is ranked 6th out of 15 countries in the Middle East/North Africa (MENA) region, and its overall score is above the world and regional averages. These figures are expected to boost the foreign – direct and indirect – investment in the years to come.

THE SULTANATE OF OMAN

Capital Muscat
Population 2.9 million
Area 309,500 sq km
Major Language (s) Arabic
Major Religion (s) Islam
Life Expectancy Male: 71 years ; Female: 76 years
Currency Omani Rial (OMR)
Literacy rate Youth 99.13%, Adults 94.76%
GDP Per Capita USD 19,309.6

CULTURE AND TRADITIONS

The Omani culture owes much to the geography of the country. The cultural heartland lies in the interior, in the valleys of the mountainous backbone which parallels the coastal plains and the interior plains. Seas to the north and east and deserts to west and south have served to isolate the country from the outside world. At the same time, Oman’s presence on the Indian Ocean has fostered a long maritime tradition settlement of many Baluchis (the Indo-Iranian people of Baluchistan) along the northern coast and the interaction with East African cultures.

omani-culture

Oman is famous for its khanjar knives, which are curved daggers worn during holidays as part of ceremonial dress. Today, traditional clothing is worn by most Omani men. They wear an ankle-length, collarless robe called a dishdasha that buttons at the neck with a tassel hanging down. Traditionally this tassel would be dipped in perfume. Today the tassel is merely a traditional part of the dishdasha. Women wear hijab and abaya. Some women cover their faces and hands, but most do not. The abaya is a traditional dress and it currently has different styles. The Sultan has forbidden the covering of faces in public office. On holidays, such as Eid, the women wear traditional dress, which is often very brightly coloured and consists of a midcalf length tunic over pants.

omani-culture Traditional dress of women in Oman

Although Arabic is Oman’s official language, there are native speakers of different dialects, as well as Balochi, or offshoots of Southern Arabian, a Semitic language only distantly related to Arabic. Swahili is also widely spoken in the country due to the historical relations between Oman and Zanzibar. The dominant indigenous language is a dialect of Arabic and the country has also adopted English as a second language.

TOURISM AND TRAVEL

The sultanate hasn’t been actively visited by tourists since its natural as well as cultural sceneries have remained invisible for long periods of time. However, the government has increasingly been focusing on promoting tourism to attract travellers from all over the world. Tourists from 67 countries are not required to apply for a visa prior to visiting the Sultanate of Oman. The list includes 38 countries in Europe and travellers from these countries get their visa on arrival. The Omani government has recently introduced an online system to make getting the visa even easier. This further improves tourists’ experience since the moment they arrive to the country.

In fact, Oman initiated a special entity called the World Travel & Tourism Council (WTTC) to plan, execute and monitor tourism attraction activities. According to WTTC, the direct contribution of Travel & Tourism to GDP in 2014 was OMR765.1 million (2.6% of GDP). It was forecasted to rise by 5.2% to OMR804.8 million in 2015. This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). It also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists. By 2025, travel & tourism will account for 72,000 direct jobs, an increase of 3.8% year-on-year over the next ten years.

LOGISTICS AND TRANSPORTATION

The central location of Oman is perfect for trade. Its coastline of 2,092 km overlooking the Arabian Sea and India Ocean beyond allows Oman to play a mediating role between different parts of the world, the eastern side, and the countries of the Arabian Peninsula. Oman’s government realised this importance and in 2011 a series of projects to establish a network of 29,411 km road started. Some projects are still ongoing such as the new Muscat-Salalah road and the construction of a parallel highway to the one currently linking Muscat to Dubai. There are also plans to improve other roads and establish new roads to link Oman with all GCC countries. The first phase of the GCC railway should be operational in 2018. For Oman this means that the network will span the entire country from the border with the UAE to Salalah. The costs for Oman will be USD11 billion. It will be a network of over 30 passenger stations and nearly ten cargo stations.

oman-camel Tourists enjoying camel riding

Integration is the new mantra at the heart of the Omani government’s vision to create the underpinnings of a new logistics-centric industry that promises to evolve over time into a full-fledged economic sector.

Oman is planning to spend some USD14.8 billion on infrastructure in the coming years. The figure, almost half of the country’s 8th Five-Year Development Plan for 2011-2015, has been earmarked for overhauling roads, ports and airports with the objective to link the three modes of transport to improve interconnectivity. Recently, the Ministry of Transport and Communications in Oman announced its plan to develop Port Sultan Qaboos in Muscat as a tourism and waterfront destination. Over the coming four years, until 2019, the project will be implemented to redesign and rebuild the port. The government seeks to attract foreign investors to undertake this task which will significantly improve not only the transport and logistics sector but also tourism.

The aviation sector has also witnessed increased investment in the past few years. The two biggest airports (Muscat International Airport and Salalah Airport) have been rebuilt and expanded. Muscat International Airport is able to handle 12 million passengers and 200,000 tonnes of freight every year. This is expected to increase eventually to 46 million passengers a year. Four other airports, Sohar, Adam, Ras al Hadd and Ad Duqm, are being built. Apparently, in all the sectors of logistics there are on-going development projects, which will create a lot of opportunities for both foreign investors and local companies. Some of these projects are extremely broad and cover the full spectrum ranging from expertise, construction, equipment and technology.

Overall, according the Oman Development Bank, Oman has been considering a range of measures to boost revenues, including cuts to energy subsidies and 2 per cent tax on expat remittances, as low oil prices weaken the country’s fiscal position. However, Oman decided against including the remittances tax in its 2015 budget, with government officials arguing that it could harm investment. Also, no plan to cut energy subsidies has been announced. The government also believes that a successful and vibrant private sector is essential to create career opportunities for well qualified graduates, who will play their own role in the expansion of both the oil and non-oil sectors. Education is also important for the development of the SME sector, which is being actively supported on all fronts, not simply by the provision of accessible bank finance.