Progress through reform: Diversifying the economy while conserving heritage and culture

The Report: Oman 2012 – Country Profile

The year 2010 marked the 40th anniversary of the accession of His Majesty Sultan Qaboos bin Said Al Said and the establishment of the Sultanate of Oman. As a member of the Gulf Cooperation Council, the Sultanate continues to play a fundamental role in promoting regional stability. It is also a country that strives to adopt economic reforms that are in line with global market expectations, while retaining and protecting all aspects of its traditional heritage and culture.

Today, the Sultanate is considered one of the top economic reformers in the world, and it is poised to continue on this path. As outlined in Vision 2020, Oman’s 25-year development plan, the country seeks to achieve economic diversification and reduce its dependency on hydrocarbons. The country aims to stand out from its neighbours and strives to become one of the top regional and global destinations for foreign investment.

HISTORY: Since ancient times Oman has benefitted from contacts with many of the world’s major civilisations, as it occupies a very advantageous position in the Gulf. Between the 6th century BC and the arrival of Islam in the 7th century AD, Oman was controlled by three dynasties: the Achaemenids, Parthians and Sassanids. In the 7th century AD, during the lifetime of the Prophet Muhammad, Oman adopted Islam.

About a decade after explorer Vasco da Gama discovered the sea route to India in 1498, the Portuguese occupied Muscat. They fortified the city and held it until the Ottomans arrived in 1660. The Ottomans ruled intermittently for just over 100 years until a tribal leader, from whom the current line of Omani sultans is descended, took over in 1741. Oman’s emergence as a seafaring economic power began in the 1600s. As the Omanis sailed down the coasts of Persia, India, Zanzibar and Kenya, they built a trading empire – one in which the East African coast became increasingly central as Oman’s empire developed into an economic force.

FORMATION: When Sultan Said bin Sultan Al Busaidi died in 1856, his sons quarrelled over succession. The British government intervened and two principalities were formed, Zanzibar and the Sultanate of Muscat and Oman. Throughout the late 19th century and early 20th century, the Sultanate’s territories and influence began to slip away as the country lost its trading competitiveness against the more technologically advanced European powers. The Omani interior started becoming alienated from the more secular coastal Muscat.

With the discovery of oil in the 1960s, the British, under pressure from European oil companies, helped the Sultanate to consolidate power. In 1970 Sultan Qaboos came to power and renamed the country the Sultanate of Oman. Under the reign of Sultan Qaboos, the internal disputes originating in the Dhofar region were quelled with the help of the British and peace has long since prevailed. The reign of Sultan Qaboos has widely been acknowledged as being characterised by social and economic progress.

GEOGRAPHY: Located in the south-east corner of the Arabian Peninsula, Oman occupies a total area of 309,500 sq km – roughly the same size as Italy – including coastal islands such as Masirah, Halanyat and Salama, and the exclaves of Musandam and Madha, which are completely surrounded by the UAE. The country has 1374 km of land borders, which it shares with the Republic of Yemen to the south-west, the Kingdom of Saudi Arabia to the north-west and the UAE to the north. Oman has 2092 km of coastline on the Gulf, Arabian Sea and the Gulf of Oman. The interior is covered by a vast expanse of desert. The imposing Hajjar mountain range forms an arc extending from the north-west of the country to the south-east. The highest peak in Oman is Jabal Shams, at about 2980 metres. Approximately 82% of the land mass is occupied by deserts and valleys, with mountain ranges and coastal plains making up the remaining 15% and 3%, respectively.

CLIMATE: The country’s climatic conditions are as varied as its geography. The coastal areas are hot and humid during the summer, while the interior generally remains hot and dry. The southern Dhofar region features unique weather conditions between May and September, called thekhareef, when it catches the Indian Ocean’s monsoon season, and temperatures can be 10-15 degrees lower than the rest of the country. Precipitation falls almost exclusively in the winter months. Other than in the Dhofar region, it is rare to see any rain between May and November. The coastal areas and the interior plains average 20-100mm of rainfall annually, but this can increase to around 900 mm in the mountainous regions. In winter, it is not uncommon to see snow on the highest mountain peaks.

POLITICS: Since the accession of Sultan Qaboos bin Said Al Said in 1970, Oman has gone through a substantial political reform process. The sultan is the head of state and head of government and is advised by the Council of Ministers, which acts as a cabinet. Two bodies act in a consultative role for the government. The Consultative Council is an 83-seat body with popularly elected members serving three-year terms. In early 2011 Sultan Qaboos granted the council increased legislative and regulatory powers. The more senior State Council has 48 members who are appointed by the sultan. All Omanis over the age of 21 are eligible to vote. The last Consultative Council elections were held in 2007 and around 390,000 Omanis voted in them, an increase of around 100,000 voters from the previous elections, which were held in 2003.

ADMINISTRATIVE AREAS: Royal decree No. 114/2011, issued in late 2011, reorganised Oman’s administrative division, streamlining governance. For administrative purposes the Sultanate is now divided into nine governorates: Muscat, Dhofar, Musandam, Al Buraimi, Al Batinah, Al Dakhiliyah, Al Sharqiyah, Al Dhahira and Al Wusta. Each governorate is further subdivided into wilayats, or provinces. There are 61 wilayats in total.

INFRASTRUCTURE: Oman has approximately 11,071 km of paved roads and 16,667 km of unpaved roads. The road network covers most parts of the country and paved roads are generally of high quality. With such a long seafaring history, it is no surprise that ports play an important economic role in Oman. There are currently five active ports in the country: Sultan Qaboos Port, the Port of Salalah, the Port of Sohar, the Port of Khasab and the Port of Shinas. Each port is located in a different part of the country and serves a different function. The Port of Duqm, which is currently under construction, will be one of the country’s largest ports upon completion. There are currently two airports in the country, in Muscat and Salalah. Both are undergoing major upgrades to accommodate expected growth in domestic as well as international passengers and tourist traffic. Another four additional regional airports are also under construction in Duqm, Sohar, Ras Al Hadd and Adam. In terms of communication networks, the Sultanate is connected to the UAE, Yemen and Pakistan via fibre-optic cables. Work is ongoing to establish a fibre-optic connection with Saudi Arabia.

MINING: Archaeological evidence shows that copper was both extracted and smelted up to 4000 years ago in Oman. Much of these copper reserves have since been exhausted. However, new mineral finds continue to be made, including reserves of gold, silver and chromite. Non-metallic industrial minerals, such as limestone and silica sand, which are used in the steel and glass-manufacturing industries, respectively, are in abundance. Large, commercially viable deposits of other minerals, such as dolomite, gypsum, zinc and cobalt, are regularly being found as well, and new ventures are being formed to exploit this wealth of industrial minerals in a sustainable, economical way.

NATURAL RESOURCES: Unlike most of its neighbours, Oman does not have bountiful supplies of oil and its geography and geologic composition make extraction difficult. It is not an OPEC member country. For 2010, the government sustained oil production above 800,000 barrels per day (bpd). The government has a goal of increasing this to 1m bpd by 2012 with the aid of enhanced oil recovery techniques and further exploration. However, the increasingly complex methods required to extract the remaining reserves have resulted in a steadily rising cost per barrel. Petroleum Development Oman (PDO) made headlines in 2009 when it made several oil discoveries, including joint heavy oil in a PDO acreage called Al Ghubar South, which is believed to hold around 1bn barrels of oil. Oman also has a significant amount of natural gas, estimated at 795.2bn cu metres of reserves. To try and reduce its economic reliance on oil, Oman has invested heavily in liquefied natural gas facilities. The availability of cheap natural gas has also been the engine behind big industrial developments, mainly in the northern city of Sohar.

POPULATION: The Sultanate has a population of approximately 2.9m, according to the most recent government estimates, of which roughly 900,000 are expatriates who come mostly from the Indian subcontinent and other countries in the Middle East.

Oman is a very young country: 55% of the population is under 20 years of age, while 83% is under the age of 35. The gender ratio of males to females is 1.26:1 and life expectancy currently stands at approximately 73 years. Some 78% of the population lives in urban centres. The largest city – and the administrative and business capital – is Muscat, with a metropolitan area population of more than 1m. The other large population cluster is the Batinah coastline, which stretches between Muscat and the city of Sohar. Around half of the country’s population is concentrated in this stretch of land. The second most populous city is Salalah, in the Dhofar region by the Yemeni border, which is home to around 210,000 people. A large proportion of the rural population still works in agriculture and fishing.

Many employers have in recent years come to depend on foreign workers from South Asia and the Philippines. The largest foreign community comes from the southern Indian states of Kerala, Tamil Nadu and Karnataka, and represents more than half of Oman’s labour. The government has developed a policy called Omanisation to encourage private sector companies to increase the numbers of nationals they employ.

LANGUAGE: Although Arabic is the official language, English is also widely spoken, and almost all signs and postings are written in both. Many nationals also speak local dialects of Arabic, such as Baluchi, derived from Old Persian. Semitic dialects are found in the Dhofar region and Kumzari, a sub-branch of Persian, is spoken in northern Musandam. Other languages spoken in the Sultanate include Hindi, due to the widespread influence of Indian immigrants, as well as French and Swahili, due to historical links with Zanzibar and East Africa.

RELIGION AND CULTURE: Oman is the only country in the world where the Ibadi strand of Islam is the dominant religion; it is practised by approximately 60% of the population. The Sultanate is religiously tolerant and is also home to sizeable Shia and Sunni populations, while the largest minority religion, accounting for around 13% of the population, is Hinduism, primarily due to the large proportion of the expatriate population coming from the Indian subcontinent. Due to Oman’s location and its long seafaring heritage, the population is a unique product of various waves of immigration, while its culture is a compelling combination of diverse influences. African, Persian, Arabic, Zanzibari and even Baluchi elements all intermingle, resulting in very open-minded and hospitable people.

EDUCATION: In 2010, about 12% of the government’s expenditure budget was allocated to education. There are more than 1000 public schools throughout the country and Omanis enjoy free public schooling through the secondary level. The government also funds scholarships at the tertiary level. The adult literacy rate is 86.7%. Higher education in Oman is still relatively young but developing steadily. Sultan Qaboos University, the first university in the country, was opened in 1986 and is now the premier tertiary institution and home to some 17,000 students in colleges covering agriculture, art, commerce and economics, education, engineering, law, Islamic studies, medicine, nursing and science. It also offers graduate studies, including a doctoral degree, for certain disciplines. The private sector has been increasingly involved in tertiary education. Indeed, there are now 24 private colleges and universities.

Many Omanis take advantage of government-funded scholarships to study both at home and abroad, regardless of their financial situation. Total tertiary enrolment stands at around 80,000 students, representing about 19% of the population between the ages of 18 and 24. The government aims to increase that figure to 50% by 2020. Due to Oman’s young population, the demand for higher education is growing quickly and, as new private universities are accredited, there is a greater emphasis placed on improving quality.

ARCHITECTURE: Forts are probably the most visible and characteristic architectural features of Oman. Practically every city and every village has one, and of those you can find, Muscat’s Mutrah or the city of Nizwa are probably the most famous examples.

Oman’s capital has successfully resisted the regional trend of erecting high-rise buildings. However, the design of many buildings is often quite imaginative and makes up for the lack of skyscrapers. Even outside of the cities, the architectural diversity is quite large, with modern houses made of expensive materials and more modest dwellings constructed using less sophisticated mediums. Housing made of palm-wood is still common along the coast from Duqm to Shuwaymiyah. In the Sharqiya Sands, Bedu use goat-hair tents, and many people in the mountains live in caves with an improvised front door. Most interesting of all are the round houses made from constructed, interlocking sticks that cling to Dhofar’s hills. They were once thatched but now are more likely to be covered in stronger material.

WILDLIFE: Oman has one of the richest wildlife habitats of the Arab world, and while the authorities encourage eco- and nature tourism the emphasis is very much on protection, with the animal welfare considered paramount. Indeed, the largest confirmed population of the rare Arabian leopard inhabits the Dhofar region.

Other endangered species that live in Oman include fox, wolf, hyena, hare and oryx. Avian fauna includes vulture, eagle, stork, falcon, sunbird, bustard and Arabian partridge. The Sultanate’s warm waters are also home to an array of rich sea life, with dolphins, turtles and hundreds of varied fish species present in its waters.

Countries: Oman
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