Oman WT/TPR/S/201/Rev.1 
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I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. The Sultanate of Oman borders Saudi Arabia to  the west, the United Arab Emirates (UAE) to 
the north west, and Yemen to the south west.  The co ast is formed by the Arabian Sea to the south and 
east, and the Gulf of Oman to the north east.  Oman also comprises the Musandam peninsula1, and 
Madha.2 Oman has a land mass of 309.5 square  km, with 3,165 km of coastline.3 The population, 
estimated at around 2.6 million (of which some 27% ar e expatriates), is relatively young:  30.5% are 
in the 0-14 age group, and only 1.7% are 65 years or  over.  About 55% of Omanis live in Muscat (the 
capital) and the Batinah coastal plain.  Oman ranks 58th (out of 177 countries) on the UNDP's Human 
Development Index.4  
2. Oman is a high-income country, with GDP per capita estimated at US$14,500 for 2007 
(Table I.1).  Almost 50% of Oman's GDP, as we ll as 65% of government income and over 90% of 
merchandise exports, is based on petroleum and natu ral gas.  Other mining and quarrying products 
(excluding oil and gas) account for only 0.2% of GDP.  Manufacturing, developed on the basis of 
Oman's comparative advantage in energy-intensive industries (mainly chemical s and liquefied natural 
gas), accounts for 10.2% of GDP, while agricu lture accounts for 1.2%.  The services sector 
contributes 37.1% to Oman's GDP, and employs over 50% of the workforce. 
Table I.1  
Oman at a glance, 2008 
 2008 
Area (km2) 309.5 
Population (million), 2006 2.6 
Expatriates (million), 2006  0.7 
GDP total (US$ billion), 2006 35.7 
GDP per capita (US$), 2007 14,500 
Share of GDP at current prices (per cent), 2006  
Agriculture and fishing 1.2 
Mining and quarrying (excluding oil and natural gas) 0.2 
Crude oil and natural gas 47.7 
Manufacturing 10.2 
Electricity and water supply 1.1 
Construction 2.5 
Services 37.1 
Wholesale and retail trade 10.6 
Hotels and restaurants 0.7 
Transport, storage, and communications 6.2 
Financial services  3.2 
Real estate services 2.5 
Public administration and defence 6.2 
Other services, including education and health 7.7 
Source:  Information provided by the Omani authorities.  
                                                      
1 The Musandam peninsula, on the Strait of Hormuz, is separated from the rest of Oman by the UAE.  
The peninsula has about 1,800 square km, and some 30,000 inhabitants. 
2 The Omani territory of Madha is surrounded by the UAE.  It covers approximately 75 square km, and 
is mostly uninhabited. 
3 Ministry of National Economy (2005). 
4 UNDP (2007). WT/TPR/S/201/Rev.1 Trade Policy Review 
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3. Oman started applying the Gulf Cooperation Council (GCC) common external tariff on 
1 January 2003 (Chapter III(2)(iv)(a)).5  Since 1973, the rial Omani (RO), the national currency, has 
been pegged to the U.S. dollar (US$2.6 per 1 RO as from 1986).  With the exception of Kuwait, all 
GCC countries have their currencies pegged to the U.S. dollar.6  Oman accepted the obligations of 
Article VIII of the IMF Agreement on 19 June 1974.   It has no restrictions on capital receipts or 
payments by residents or non-residents.   
4. Since the mid 1990s, Oman has been implem enting a development strategy aimed at, inter 
alia, reducing its high dependence on cr ude oil and natural gas.  This is being done by promoting 
downstream industries and tourism;  improving education and health  services, and modernizing the 
infrastructure; and addressing some structural problems, including the dominant positions of state-
owned companies (e.g. Petroleum Development Oman, Oman Telecommunications Company, and 
Oman Air) in key activities.  In this regard, th e development strategy has been accompanied by 
structural reforms to create a more business-friendly environment, and increase the role of the private 
sector in the economy (Chapters II(5) and III(4)(iii)). 
(2) RECENT ECONOMIC DEVELOPMENTS  
5. Oman's development strategy has resulted in impressive economic performance in the past 
few years, with consistently high GDP growth, low inflation, and surpluses in both its overall fiscal 
position and external current account.  Real GDP grew by 6.4% in 2007, and at an annual average of 
5.3% over 2000-07 (4.9% during 1990-99), spurred by rapidly rising crude petr oleum and natural gas 
prices.  A real GDP growth rate of 7.4% is expected for 2008.7  
6. The annual average inflation rate in Oman, as measured by the consumer price index (CPI), 
was 0.5% during 2000-06 (1.6% over 1990-99). However, inflation surged to a 16-year high of 5.9% 
in 2007 (Table I.2) partly due to an increase in pr ivate and public consumption.  The main goals of the 
monetary policy conducted by the Central Bank of  Oman (CBO) are maintaining price stability and 
the peg to the U.S. dollar.8  The pegged exchange rate arrangement  has provided a credible anchor for 
price stability and market confidence.9  Nonetheless, the depreciation of the U.S. dollar against other 
major currencies, since 2006, also contributed  to the rise in Oman's inflation rate.10 
7. Oman's fiscal position has been a comfortable over the last few years.  Its overall fiscal 
surplus, as percentage of GDP, averaged 8.4% dur ing 2001-06.  These surpluses have been partially 
transferred to the State General Reserve Fund (SGRF) in an effort to keep public spending at levels 
                                                      
5 The GCC members are: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. 
6 The Kuwaiti dinar was re-pegged to a basket of currencies on 20 May 2007 (Central Bank of Kuwait 
online information.  Viewed at:  http://www.c bk.gov.kw/WWW/index.html [21 January 2008]). 
7 Historically, fluctuations in the world price of o il, and regional geopolitical shocks have led to wide 
fluctuations in Oman's growth; since the late 1990s, annual real GDP growth has fluctuated between -0.2% and 
7.5% (IMF, 2008). 
8 With the aim of better managing liquidity in the financial system, in recent years, the CBO has shifted 
from direct instruments of monetary control (e.g. reserve requirements and lending ratios) to open market 
operations, mainly through the purchase and sale of government securities and ce rtificates of deposit. 
9 IMF Public Information Notice No. 07/35, 20 March 2007.   
10 Given the recent impact on inflation, GCC countries are discussing a move from the U.S. dollar peg 
to a more flexible currency basket ma de up predominantly of euros (IMF Press Release, 22 January 2008).  The 
CBO has indicated that there are no plans to drop the peg to the U.S. dollar;  fiscal policy will remain the main 
tool to curb inflation ( Times of Oman , 16 March 2008). Oman WT/TPR/S/201/Rev.1 
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consistent with the economy's absorptive capacity.11  Nevertheless, with oil-related revenues 
accounting for about two thirds of to tal public revenue, Oman is taki ng steps to achieve a sustainable 
non-hydrocarbon budget position through an expansion of the tax base, while there are plans to 
reform the Civil Service Employees Pension Fund.  In  addition, public expendi ture could be further 
reduced by gradually eliminating electricity and fuel subsidies (Chapters III(4)(i) and IV(3)(ii-iv)).12 
Table I.2 
Selected economic indicators, 2001-07 
 2001 2002 2003 2004 2005 2006 2007a 
Miscellaneous        
Nominal GDP (RO million, year en d) 7,670 7,815 8,376 9,516 11,856 13,710 .. 
Real GDP (percentage change) 7.5 2.6 2.0 5.3 6.0 6.8 6.4 
Consumer price index (average;  percentage  change) -0.8 -0.3 0.2 0.7 1.9 3.2 5.9 
Gross domestic savings (percentage of GDP) 33.8 33.1 34.2 34.6 45.5 .. .. 
Monetary sector        
Narrow money (M1;  percentage ch ange) 30.1 10.7 4.5 12.8 24.3 9.0 55.9 
Broad money (M2;  percentage change) 9.2 5.2 2.5 4.0 21.4 24.9 37.0 
Interest rate (per cent)b 9.2 8.5 8.2 7.6 7.1 7.4 7.3 
Public finances (percentage of GDP)        
Overall fiscal balancec 8.4 5.2 4.7 4.5 12.4 15.4 .. 
Fiscal balance (net of transfers to reserves)c -4.2 0.9 1.4 2.4 2.6 0.7 .. 
Total revenues 33.1 38.5 39.5 42.4 38.7 36.7 .. 
Oil revenue 24.4 28.2 27.7 30.5 27.3 23.5 .. 
Total expenditure 34.8 37.6 38.1 40.0 36.2 36.0 .. 
National accounts (percentage of GDP)        
Private consumption 43.9 43.5 43.7 44.0 35.1 .. .. 
Government consumption 22.3 22.1 21.4 21.4 19.4 .. .. 
Investment  12.6 12.5 15.6 20.6 18.1 .. .. 
Exports-Imports (goods and services) 21.2 21.0 18.6 14.1 27.3 .. .. 
External sector        
Exchange rate (US$ per RO) 2.6 2.6 2.6 2.6 2.6 2.6 2.6 
Real effective exchange rate (2000 = 100) 100.6 97.2 88.8 83.2 82.0 .. .. 
Current account (percentage of GDP) 9.8 6.7 3.8 2.4 15.2 12.1 10.0 
Trade in goods (exports + imports;  percentage of GDP) 85.3 86.0 85.1 89.4 89.7 91.5 .. 
Central Bank reserves (months of imports) 5.5 6.7 6.3 5.0 6.0 5.5 .. 
.. Not available. 
a Projected or preliminary. 
b Lending rates are average returns on the entire RO loan portfolio. 
c Including statistical discrepancy.  Negative sign indicates deficit. 
Source:  IMF, International Financial Statistics,  various issues;  and information provided by the Omani authorities.  
8. In line with the significant increase in oil and g as earnings, the ratio of Oman's external debt 
to its GDP declined from 12.7% in 2000 to 4.4% in  2007.  Oman's debt situ ation seems manageable 
despite the fact that the Government needs to fina nce various development proj ects, notably on health, 
education, and infrastructure. 
                                                      
11 The SGRF, established in 1979, was used to finance the budget deficit in some  years.  Oman also has 
other funds, including the Oil Reserve Fund;  revenues from the sale of some 15,000 barrels of petroleum per 
day are transferred to the Oil Reserve Fund. 
12 IMF Public Information Notice No. 07/35, 20 March 2007. WT/TPR/S/201/Rev.1 Trade Policy Review 
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(3) TRADE PERFORMANCE AND INVESTMENT  
(i) Trade in goods and services 
9. Oman's balance of payments has registered surp luses over the recent years (Table I.3), with 
the external current account sustained surpluses play ing a key role, mainly during the years the capital 
and financial account is in deficit.  Oman's exte rnal current account surpluses averaged 8.6% of GDP 
during 2001-07 (Table I.2), and a surplus of 11.7% of GDP is predicted for 2008.13  This impressive 
performance has been led by a surge in oi l revenues, from US$8,910 million in 2000 to 
US$14,502 million in 2006, with the trade su rplus increasing from US$6,726 million in 2000 to 
US$11,691 million in 2006 (Table I.3). 
10. Oman's economy is increasingly dependent on in ternational trade: the ratio of merchandise 
trade (exports and imports) to GDP rose from 85.3% in 2001 to 91.5% in 2006.  In 2006, Oman ranked 44
th among world merchandise exporters (consider ing the countries of the EC together and 
excluding intra-EC trade), and 57th among importers.  In services trade, Oman ranked 79th among 
exporters and 47th among importers.14 
Table I.3 
Balance of payments, 2000-06 
(US$ million)  
 2000 2001 2002 2003 2004 2005 2006 
A  Current  account 3,131.3 1,883. 0 1,698.3 1,264.0 801. 0 4,176.9 4,377.1 
1.  Goods 6,725.6 5,763.3 5,537.1 5,583.9 5,508.5 10,663.2 11,690.5 
 Exports (f.o.b.) 11,318.6 11,074.1 11,173.0 11,669.7 13,381.0 18,691.8 21,586.5 
  Oil 8,910.3 7,706.1 7,534.5 7,922.0 9,240.6 13,420.0 14,502.0 
  Natural gas 465.5 1,173.0 1,068.9 1,394.0 1,648.9 2,309.5 2,977.9 
  Other exports 645.0 691.8 678.8 790.6 1,092.3 1,443.4 2,111.8 
  Re-exports 1,297.8 1,503.3 1,890.8 1,563.1 1,399.2 1,518.9 1,994.8 
 Imports (f.o.b.) -4,593.0 -5,310.8 -5,635.9 -6,085.8 -7,872.6 -8,028.6 -9,896.0 
2.  Services -1,305.6 -1,412.2 -1,271.8 -1,534.5 -2,031.2 -2,309.5 -2,827.0 
 Exports 452.5 486.3 606.0 645.0 725.6 741.2 912.9 
  Travel 221.1 265.3 392.7 384.9 413.5 400.5 538.4 
  Transportation 195.1 197.7 189.9 239.3 288.7 299.1 317.3 
  Insurance 13.0 2.6 2.6 2.6 2.6 5.2 5.2 
  Communication 23.4 20.8 20.8 18.2 20.8 36.4 52.0 
 Imports -1,758.1 -1,898.6 -1,877.8 -2,179.5 -2,756.8 -3,050.7 -3,739.9 
  Travel -470.7 -517.6 -530.6 -577.4 -616.4 -642.4 -686.6 
  Transportation -647.6 -749.0 -769.8 -819.2 -1,016.9 -1,050.7 -1,238.0 
  Insurance -114.4 -96.2 -171.7 -221.1 -257.5 -299.1 -343.3 
  Communication -39.0 -39.0 -31.2 -28.6 -33.8 -41.6 -44.2 
  Other services -486.3 -496.7 -374.5 -533.2 -832.2 -1,016.9 -1,427.8 
Balance on goods and services (1 + 2) 5,420.0 4,351.1 4,265.3 4,049.4 3,477.2 8,353.7 8,863.5 
3. Income -837.5 -936.3 -964.9 -1,113.1 -850.5 -1,919.4 -1,698.3 
 Credit 291.3 322.5 241.9 244.5 658.0 676.2 1,201.6 
 Debit -1,128.7 -1,258.8 -1,206.8 -1,357.6 -1,508.5 -2,595.6 -2,899.9 
Balance on goods, services and income 
(1 + 2 + 3) 4,582.6 3,414.8 3,300.4 2,936.3 2,626.8 6,434.3 7,165.1 
4.  Current transfers -1,451.2 -1,531.9 -1,602.1 -1,672.3 -1,825.7 -2,257.5 -2,788.0 
  Worker remittances -1,451.2 -1,531.9 -1,602.1 -1,672.3 -1, 825.7 -2,257.5 -2,788.0 
Table I.3 (cont'd) 
                                                      
13 IMF (2008). 
14 WTO Statistics database, "Trade Profiles:  Oman ".  Viewed at: http://stat.wto.org/CountryProfile/ 
WSDBCountryPFView.aspx?Language=E&Country=OM. Oman WT/TPR/S/201/Rev.1 
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 2000 2001 2002 2003 2004 2005 2006 
B  Capital and financial account  -361.5 -228.9 -712.6 150.8 1,032.5 -764.6 -1,100.1 
5.  Capital account 7.8 -10.4 5.2 10.4 20.8 -15.6 -96.2 
 Grants (credit) 33.8 7.8 5.2 10.4 20.8 0.0 0.0 
 Grants (debit) -26.0 -18.2 0.0 0.0 0.0 -15.6 -96.2 
6.  Financial account -369.3 -218.5 -717.8 140.4 1,011.7 -749.0 -1,003.9 
 Foreign direct investment 83.2 390.1 122.2 340.7 -20.8 785.4 704.8 
 Portfolio investment -36.4 13.0 -78.0 -80.6 93.6 46.8 470.7 
 Other investment -416.1 -621.6 -762.0 -119.6 938.9 -1,581.3 -2,179.5 
  Assets -496.7 85.8 -296.5 -49.4 -829.6 -2,528.0 -5,531.9 
   Trade credit and other  
   receivables 15.6 137.8 88.4 52.0 -15.6 -130.0 -332.9 
   Currency and deposit  -223.7 218.5 -252.3 -88.4 -574.8 -541.0 -1,641.1 
   Other assets -288.7 -270.5 -132.6 -13.0 -239.3 -1,857.0 -3,557.9 
  Liabilities 80.6 -707.4 -465. 5 -70.2 1,768. 5 946.7 3,352.4 
   Trade credit and other  
   receivables 0.0 0.0 62.4 345.9 431.7 460.3 860.9 
   Currency and deposit  -20.8 -111.8 -132.6 -226.3 28.6 -273.1 1,027.3 
   Loans 101.4 -595.6 -395.3 -189.9 1,308.2 759.4 1,464.2 
    General  government  -114.4 -447.3 -598.2 -421.3 195.1 -439.5 509.8 
    Other sectors 215.9 -148.2 202.9 231.5 1,113.1 1,199.0 954.5 
C   Net errors and omissions -509.8 -642.4 -671.0 -746.4 -967.5 -611.2 -1,068.9 
D   Overall balance (A + B + C) 2,260.1 1,011.7 314.7 668.4 866.1 2,801.0 2,208.1 
E   Reserves assets -2,260.1 -1,011.7 -314.7 -668.4 -866.1 -2,801.0 -2,208.1 
Foreign exchange -2,260.1 -1,011.7 -314.7 -668.4 -866.1 -2,801.0 -2,208.1 
 Central bank 345.9 -20.8 -650.2 -291.3 59.8 -858.3 -582.6 
 Government reserves -2,606.0 -990.9 335.5 -377.1 -925.9 -1,942.8 -1,625.5 
Source:   WTO Secretariat estim ates, based on Central Bank of Oman (2004-06), Annual Reports . 
11. As a result of the significant rise in the world pr ice of crude oil, Oman's export base is highly 
and increasingly concentrated in fuels (petroleum a nd gas).  The share of fuels in total merchandise 
exports rose from 82.5% in 2000 to 94.7% in 2006 (Chart  I.1 and Table AI.1).  In value terms, non-oil 
exports increased during the period under review, bu t their share of total merchandise exports fell 
because the increase in oil prices was stronger.  As a result, the contribution of manufacturing (led by 
iron and steel, and chemicals) decreased from 12.4% to 2.8%, while that of agriculture products was 
2% in 2006 (down from 3.7% in 2000). 
12. Oman's imports have increased in line with the country's significant economic growth over 
the last few years.  Total merchandise imports  more than doubled from US$5,039 million in 2000 to 
US$10,898 million in 2006 (Table AI.2).  Almost  80% of Oman's total merchandise imports are 
manufactures, led by machinery and transport e quipment; automotive products, other non-electrical 
machinery, and chemicals also represent a sizeabl e share (Chart I.1 and Table AI.3).  Fuels 
represented 3.3% of total merchandise imports in 2006 (up from 1.6% in 2000), whereas the share of 
agricultural imports decreased from 23% to 11.3% during the same period. 
13. Oman's export destinations are relatively dive rsified (Chart I.2 and Table AI.3):  the 
Republic of Korea and the UAE are the main destinations; together, Asia and the Middle East accounted for 9.7% of total exports in 2006 (down from 91.8% in 2000).  In the Middle East, the UAE has typically been Oman's major export market (1.9% in 2006, down from 7.2% in 2000), followed by Saudi Arabia (0.7% in 2006).  In Asia, the Republic  of Korea is the main destination for Oman's 
exports (4.2% in 2006), followed by Japan (0.9%).  In 2006, the EC and the United States accounted 
for 1.2% and 0.5%, respectively, of Oman's exports. 
 WT/TPR/S/201/Rev.1 Trade Policy Review 
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0%10%20%30%40%50%60%70%80%90%100%
2000 2001 2002 2003 2004 2005 2006
0%10%20%30%40%50%60%70%80%90%100%
2000 2001 2002 2003 2004 2005 2006Chart I.1
Structure of merchandise trade, 2000-06
(a) Exports, including re-exports (f.o.b.)
(b) Imports (c.i.f.)
Source: WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3 data.Other
Fuels Textiles and clothingFood Transport equipment
Chemicals Transport equipmentFood Other semi-manufactures Textiles and clothing
Machinery Mining Other
Iron and steel Telecom equipment
 Oman WT/TPR/S/201/Rev.1 
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%2000200120022003200420052006Chart I.2
Direction of merchandise trade, 2000-06
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%2000200120022003200420052006(a) Exports, including re-exports
(b) Imports
Source: WTO Secretariat estimates, based on UNSD, Comtrade database SITC Rev.3 data.France United Kingdom China IndiaItaly Japan United States United Arab Emirates AustraliaPer cent
EC(25) Saudi ArabiaUnited Arab Emirates United States Other 
Islamic Republic of Iran AfricaJapanChina
Korea
Germany Saudi Arabia The Netherlands Korea Other
 WT/TPR/S/201/Rev.1 Trade Policy Review 
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14. Asia and the Middle East together supplied 69. 9% of Oman's total merchandise imports in 
2006 (70.8% in 2000).  The UAE remains the leading source of Oman's merchandise imports with 25.9% of the total in 2006 (down from 29.5% in 2000), followed by the EC (19.1%), and Japan (17.3%);  the United States supplied 5.2% of Om an's merchandise imports in 2006 (Table AI.4). 
15. Balance of payments data indicate that Oman is, increasingly, a net importer of services, with 
a deficit averaging US$1,813 million per year duri ng 2000-06, peaking at US$2,827 million in 2006 
(Table I.3).  The deficit of transportation services went from US$453 million in 2000 to US$921 million in 2006, while the deficit of trav el services declined from US$250 million to 
US$148 million during the same period. 
(ii) Foreign direct investment 
16. Oman's average annual inflow of foreign direct investment (FDI) jumped from 
RO 208.9 million in 2003 to an estim ated RO 637.7 million in 2006 (Table I.4).  This was largely the 
result of positive developments in the economy over the period, and the steps taken by Oman to 
improve the investment climate, including through the establishment, in 1997, of the Oman Centre for 
Investment Promotion and Export De velopment (OCIPED) (Chapter II(5)). 
17. On the basis of UNCTAD's Inward FD I Performance Index, Oman ranked 88
th out of 
141 economies in 2006 (the same as in 2005).15 Oman's annual FDI outflows averaged 
US$191 million during 2003-06 (US$2 million over 1990-00).  According to UNCTAD's Outward 
FDI Performance Index, Oman ranked 53rd out of 141 economies in 2006 (48th in 2005).16  
18. Oman's vast potential for attracting foreign investors and fostering domestic investment 
remains somewhat untapped.  Its position in UNCTAD's Inward FDI Potential Index was 57th in 2005 
(the same as in 2004)17, reflects, in general, inhibited FDI in Oman due to the slow progress of parts 
of the privatization programme (Chapter III(4)(iii)).  In addition, land ownership for foreigners is 
generally prohibited, except in the new tourist ar eas, while foreign companies still face investment 
restrictions in certain activities (Chapter II(5)).  Oman ranks 49th (out of 178 economies) in the World 
Bank's Ease of Doing Business 2008 Index (43rd in 2007).18 
19. In 2006, 41.4% of total FDI stock was for oil and gas investment projects, followed by 
manufacturing (18.5%), financial services (16.1%), and utilities and construction (8%).  By country of 
origin, the United Kingdom is the largest single source of FDI into Oman (28.9% of the total stock in 
2006);  followed by the UAE (16.5%), the United States (13.2%), India (4.9%), Kuwait (4.8%), and Qatar (3.9%) (Table I.4). 
                                                     
 
15 UNCTAD's Inward FDI Performance Index measures  the extent to which host countries receive 
inward FDI, and ranks countries by the amount of FDI they receive relative to th eir economic size.  It is 
calculated as the ratio of a country's share in global FDI inflows to its share in global GDP. 
16 UNCTAD (2007). 
17 UNCTAD's Inward FDI Potential Index measures the extent to which host countries receive inward 
FDI, and ranks countries by the amount of FDI they receive relative to their potential.  It is calculated on the 
basis of structural variable s, such as country risk, and trade-related measures. 
18 The index is based on ten topics (Oman's ranking in parenthesis), i.e. starting a business (107);  
dealing with licences (130);  employing workers (26);  registering property (15);  getting credit (97);  protecting 
investors (64);  paying taxes (5);  trading across borders (104); enforcing contracts (110);  and closing a business (59) (World Bank Group, 2007). Oman WT/TPR/S/201/Rev.1 
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Table I.4 
Foreign direct investment, 2002-06 
(RO million) 
 2002 2003 2004 2005 2006a 
FDI inflowsb .. 208.9 16.3 180.7 637.7 
Foreign portfolio investmentc .. 61.5 18.2 31.8 377.1 
Other foreign investmentd .. 209.2 119.3 127.5 975.5 
Total .. 479.6 153.8 340.0 1,990.3 
FDI stockb 720.5 929.4 945.8 1,622.5 2,260.2 
Foreign portfolio investmentc 26.5 88.0 106.2 210.3 587.4 
Other foreign investmentd 973.8 1,182.9 1,302.2 2,173.9 3,149.4 
Total 1,720.7 2,200.4 2,354.2 4,006.7 5,997.0 
FDI stock by sector (% share)       
Oil and gas 45.7 47.9 45.0 42.4 41.4 
Manufacturing 20.0 20.0 15.3 17.3 18.5 
Financial services 16.0 13.2 15.3 18.7 16.1 
Utilities and construction 6.5 8.4 10. 0 8.3 8.0 
Trade 5.7 4.5 4.3 5.7 5.3 
Real estate 2.1 1.8 2.7 3.0 4.4 
Other 4.1 4.2 7.4 4.6 6.4 
FDI stock by country of origin      
United Kingdom 303.4 357.4 390.4 536.2 652.7 
United Arab Emirates 53.4 68.5 75.5 213.4 372.1 
United States 45.4 107.3 99.8 102.9 298.0 
India 32.9 74.5 75.6 112.0 111.5 
Kuwait .. 14.2 17.9 64.7 107.6 
Qatar .. 6.3 6.4 72.4 88.2 
Others 184.1 301.2 280.2 520.9 630.1 
.. Not available. 
a Projected or preliminary. 
b Investments where the direct investor owns 10% or more of th e ordinary shares or voting power (in any locally incorporated 
 enterprise) or the equivalent (in any incorporated enterprise). c Investment in tradeable instruments, su ch as equities (excluding FDI),  bonds and notes, money market  instruments, and financi al 
 derivatives. 
d Other investments, include everything ot her than FDI and portfolio investment, such as trade credit, loans, and deposits. 
Source:  Ministry of National Economy (2006), The Survey of Foreign Investm ent: Concepts and Objectives ;  and 
 information provided by the Omani authorities.  
20. Under Oman's seventh five-year development Plan 2006-10, several investment projects are 
envisaged for an estimated value of RO 14,051 m illion, with the public sector contributing 57.6% of 
the total, and private (local and foreign) invest ors the remainder (RO 5,961 million).  Residential and 
other projects account for 39.6% (RO 2,363 million) of  the Plan's total private investment programme, 
followed by gas-based industrial projects (27.5% ), oil and gas (23.4%), and tourism (9.5%).19  
Nonetheless, questions have been raised whet her some of these investments (with a mix of 
commercial, residential, and tourism) can attract sufficient demand given that other countries in the 
region, notably the UAE, are also implementing similar projects. 
(4) OUTLOOK  
21. Given Oman's high dependency on oil, its economic  outlook depends, to a great extent, on the 
evolution of the world oil market.20  In this regard, Oman's economic policy is aimed at continuing to 
                                                      
19 Ministry of National Economy (2007). 
20 Oman's seventh five-year development Plan 2006-10 assumes, inter alia , average daily oil 
production of about 827,000 barrels, and an average oil price of  US$30 (Ministry of National Economy, 2007).   WT/TPR/S/201/Rev.1 Trade Policy Review 
Page 10 
 
 
reduce its vulnerability to world oil price fluctuations , and accelerating non-oil (e.g. tourism, fisheries, 
and manufacturing) growth to ge nerate more employmen t opportunities for the growing Omani labour 
force.  To this end, Oman is to pursue its structur al reforms, such as lifting the remaining impediments 
to FDI, and reducing the size of its public sector, while encouraging private sector development.  
Moreover, Oman's reserve funds aim to ensure inte r-generational economic equi ty in the exploitation 
of its non-renewable natural wealth.21 
22. Further integration within the GCC area22, including the planned monetary union by 201023, is 
expected to further improve Oman's  macroeconomic performance.  The important steps to be taken by 
GCC countries towards a full monetary union incl ude:  achieving convergence criteria (e.g. price 
stability, sustainable fiscal position, and low interest rates); creating common institutions, notably the 
GCC central bank;  implementing regulatory a nd legislative reforms;  and adopting a common 
currency.  The GCC customs union, together with an  effective monetary union , is likely to enhance 
growth prospects for Oman and the other countries in the region through, inter alia , a more efficient 
allocation of resources, an increase in intra-GCC tr ade, strong boosts to FDI resulting from increased 
business opportunities, and higher productivity as a result of increased competition among member 
states. 
23. Demographic factors, such as Oman's young popula tion structure, and trends in international 
migration may also play an important role.  In a ddition, Oman's main economic and social challenge 
seems to be the creation of employment opportunities for local workers24, through the "Omanization" 
programme.25 
 
                                                      
21 Under Plan 2006-10, RO 319 million are expected to be transferred to the Oil Reserve Fund 
(Ministry of National Economy, 2007). 
22 The GCC area has estimated GDP of around US$800 billion. 
23 A two-speed approach has been agreed for the mone tary union, starting with countries ready to adopt 
the single currency by 2010.  Om an has announced it cannot meet this deadline (IMF Press Release, 
3 December 2007).   
24 An estimated 30,000 Omanis enter the labour mark et each year.  The Ministry of Manpower, created 
in 2001, provides some funding for young entrepreneurs seeking to establish firms in Oman.  In trying to encourage jobs for locals in activities such as tourism and oil, the Government relies on the use of quotas.  
Companies that do not comply with quota requirements face fines, bans on hiring expa triates, and restrictions 
when seeking government contracts.  As an incentive,  the Government also allows  companies that meet the 
Omanization quotas to bring in additional expatriate work ers through a "green-card" system of expedited labour 
clearances (Economist In telligence Unit, 2007). 
25 The Omanization rate in the private sector increas ed from 16.4% in 2000 to 25% in 2005, while in 
the civil government, it went from 74% to 81.8% (Ministry of National Economy, 2007).