page_title: Oman
section_title: Economy
hierarchical_section_title: Oman / Economy
caption_attribution_description: English: Oman Export Treemap from MIT Harvard Economic Complexity Observatory
context_page_description: Oman, officially the Sultanate of Oman, is a country on the southeastern coast of the Arabian Peninsula in Western Asia. Located in a strategically important position at the mouth of the Persian Gulf, the country shares land borders with the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest, and shares marine borders with Iran and Pakistan. The coast is formed by the Arabian Sea on the southeast and the Gulf of Oman on the northeast. The Madha and Musandam exclaves are surrounded by the UAE on their land borders, with the Strait of Hormuz and the Gulf of Oman forming Musandam's coastal boundaries.
  From the late 17th century, the Omani Sultanate was a powerful empire, vying with the Portuguese Empire and the British Empire for influence in the Persian Gulf and Indian Ocean. At its peak in the 19th century, Omani influence or control extended across the Strait of Hormuz to modern-day Iran and Pakistan, and as far south as Zanzibar. When its power declined in the 20th century, the sultanate came under the influence of the United Kingdom. For over 300 years, the relations built between the two empires were based on mutual benefits.
context_section_description: 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." By regional standards, Oman has a relatively diversified economy, but remains dependent on oil exports. In terms of monetary value, mineral fuels accounted for 82.2 percent of total product exports in 2018. Tourism is the fastest-growing industry in Oman. Other sources of income, agriculture and industry, are small in comparison and account for less than 1% of the country's exports, but diversification is seen as a priority by the government. Agriculture, often subsistence in its character, produces dates, limes, grains and vegetables, but with less than 1% of the country under cultivation, Oman is likely to remain a net importer of food.
  Oman's socio-economic structure is described as being hyper-centralized rentier welfare state. The largest 10 percent of corporations in Oman are the employers of almost 80 percent of Omani nationals in the private sector. Half of the private sector jobs are classified as elementary. One third of employed Omanis are in the private sector, while the remaining majority are in the public sector. A hyper-centralized structure produces a monopoly-like economy, which hinders having a healthy competitive environment between businesses.
  Since a 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, namely tourism and infrastructure. Oman had a 2020 Vision to diversify the economy established in 1995, which targeted a decrease in oil's share to less than 10 percent of GDP by 2020, but it was rendered obsolete in 2011. Oman then established 2040 Vision.
  A free-trade agreement with the United States took effect 1 January 2009, eliminated tariff barriers on all consumer and industrial products, and also provided strong protections for foreign businesses investing in Oman. Tourism, another source of Oman's revenue, is on the rise. A popular event is The Khareef Festival held in Salalah, Dhofar, which is 1,200 km from the capital city of Muscat, during the monsoon season (August) and is similar to Muscat Festival. During this latter event the mountains surrounding Salalah are popular with tourists as a result of the cool weather and lush greenery, rarely found anywhere else in Oman.
  Oman's foreign workers send an estimated US$10 billion annually to their home states in Asia and Africa, more than half of them earning a monthly wage of less than US$400. The largest foreign community is from the Indian states of Kerala, Tamil Nadu, Karnataka, Maharashtra, Gujarat and the Punjab, representing more than half of entire workforce in Oman. Salaries for overseas workers are known to be less than for Omani nationals, though still from two to five times higher than for the equivalent job in India.
  In terms of foreign direct investment (FDI), total investments in 2017 exceeded US$24billion. The highest share of FDI went to the oil and gas sector, which represented around US$13billion (54.2 percent), followed by financial intermediation, which represented US$3.66billion (15.3 percent). FDI is dominated by the United Kingdom with an estimated value of US$11.56billion (48 percent), followed by the UAE USD 2.6billion (10.8 percent), followed by Kuwait USD 1.1billion (4.6 percent).
  
   
  Oman, in 2018 had a budget deficit of 32 percent of total revenue and a government debt to GDP of 47.5 percent. Oman's military spending to GDP between 2016 and 2018 averaged 10 percent, while the world's average during the same period was 2.2 percent. Oman's health spending to GDP between 2015 and 2016 averaged 4.3 percent, while the world's average during the same period was 10 percent. Oman's research and development spending between 2016 and 2017 averaged 0.24 percent, which is significantly lower than the world's average (2.2 percent) during the same period. Oman's government spending on education to GDP in 2016 was 6.11 percent, while the world's average was 4.8 percent (2015).
caption: A proportional representation of Oman's exports
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