Oman's long-planned market reforms, spearheaded by a spirited privatization program, are finally rousing more than just interest. Foreign investment and blossoming large-scale private sector growth are pumping fresh life into several key private energy and industrial projects, both domestically and regionally.
Guiding market reform is a largely pragmatic axiom underpinned by the Gulf-wide diversification argument. Oman, like many of its neighbors, has been historically dependent on oil revenues, which presently account for roughly 80% of the country's export earnings and 40% of GDP. Oil price volatility and acutely limited proven reserves are an anxiety for any heavily oil-reliant economy.
Hit hard by the oil price crash of two years ago, Oman's economy is now on a sturdy, oil-price driven rebound. The recovery has sent prices soaring from a low of $9 per barrel to $30-plus highs. But notwithstanding this possibly fleeting respite, the demand for greater investment, faster growth and more jobs remains explicit. The medium term aim is to balance the budget and to maintain a reputation for financial prudence. According to the Central Bank of Oman, the government is focusing on further reducing the budget deficit and increasing deposits in the Reserve Fund.
But Oman, in contrast to some of its Gulf neighbours, first etched its plans to boost investment and promote diversification away from oil a decade ago. Moreover, it has already taken some bold steps towards their implementation. The result, so far, has been one of the most punctual and extensive privatizations...
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