Editing Economy of Oman (section)

==Overview==
[[File:Muttrah Souq.jpg|thumb|left|Traditional souqs like this one at [[Muttrah]] are very common in Oman and have formed the bulk of the Omani economy in the past.]]
Oman [[liberalization|liberalised]] its markets in an effort to accede to the [[World Trade Organization]] (WTO) and gained membership in 2000.<ref name=":0" /> The Director of the Sultanate of Oman's delegation to the WTO is [[Hilda al-Hinai]].<ref>{{Cite web|last=Matani|first=Ali Al|date=2019-05-29|title=How can private sector benefit from WTO?|url=https://www.omanobserver.om/how-can-private-sector-benefit-from-wto/|access-date=2020-10-23|website=Oman Observer|language=en-US}}</ref> Further, on 20 July 2006 the U.S. Congress approved the [[US-Oman Free Trade Agreement]]. This took effect on 1 January 2009, eliminating tariff barriers on all consumer and industrial products.  It also provides strong protections for foreign businesses investing in Oman.<ref name=":0">[[Chemical & Engineering News]], 5 January 2009, "U.S.-Oman pact expands Free Trade", p. 18</ref>

The government also undertook some important policy measures during 2018 with the establishment of a commercial arbitration center, the adoption of a new commercial companies' law, and a further streamlining of licensing processes through Invest Easy in order to improve the business and investment climate and promote private sector-led growth in the Sultanate.

[[Oman]]'s economy and revenues from petroleum products have enabled Oman's dramatic development over the past 50 years. Notably however, Oman is not a member of [[OPEC]], although it has coordinated with the group in recent years.<ref>{{Cite web|url=https://www.euronews.com/2019/11/11/oman-says-opec-likely-to-extend-supply-curb-deal|title=Oman says OPEC+ likely to extend supply curb deal|date=2019-11-11|website=euronews|language=en|access-date=2019-12-25}}</ref>

[[File:Sohar flickr01.jpg|thumb|Petrochemical tanks in [[Sohar]]]]Oil was first discovered in the interior near [[Fahud]] in the western desert in 1964. [[Petroleum Development Oman]] (PDO) began production in August 1967. The Omani Government owns 60% of PDO, and foreign interests own 40% ([[Royal Dutch Shell]] owns 34%; the remaining 6% is owned by [[Compagnie Francaise des Petroles]] [Total] and [[Partex]]). In 1976, Oman's oil production rose to 366,000 barrels (58,000 m³) per day but declined gradually to about 285,000 barrels (45,000 m³) per day in late 1980 due to the depletion of recoverable reserves. From 1981 to 1986, Oman compensated for [[1980s oil glut|declining oil prices]], by increasing production levels to 600,000 b/d. With the collapse of oil prices in 1986, however, revenues dropped dramatically. Production was cut back temporarily in coordination with the [[Organization of Petroleum Exporting Countries]] (OPEC), and production levels again reached 600,000 b/d by mid-1987, which helped increase revenues. By mid-2000, production had climbed to more than 900,000 b/d where they remain. [[Natural gas]] reserves, which increasingly provide the fuel for power generation and desalination, stand at 18 trillion ft³ (510&nbsp;km<sup>3</sup>). The [[Oman LNG]] processing plant located in Sur was opened in 2000, with production capacity of 6.6 million tons/YR, as well as unsubstantial gas liquids, including condensates.

Oman's 10th five-year plan (2020–2025) is the first implementation plan of [[Oman Vision 2040|Vision 2040]],<ref>[https://www.2040.om/wp-content/uploads/2019/10/2040_En.pdf Vision 2040] 2040.om {{dead link|date=January 2024}}</ref> and will focus its efforts towards achieving economic diversification.<ref>{{Cite web|url=https://timesofoman.com/article/2388537/Oman/Omans-next-5-year-plan-to-focus-on-Tanfeedh-goals|title=Oman's next 5-year plan to focus on Tanfeedh goals|date=2019-12-14|website=Times of Oman|language=en|access-date=2019-12-25}}</ref> The plan for economic diversification aims to move Oman away from the oil-and-gas-based sources of income, and has earmarked five sectors that have high growth potential and economic returns. These are agriculture and fisheries, manufacturing, logistics and transport, energy and mining, and tourism.

According to the [[Central Bank of Oman|Central Bank of Oman's]] Annual Report 2018,<ref>{{Cite web |others=Economic Research & Statistics Department |title=Central Bank of Oman: Annual Report 2018 |url=https://cbo.gov.om/sites/assets/Documents/English/Publications/AnnualReports/AnnualReport2018Eng.pdf |access-date=29 June 2022 |website=cbo.gov.om}}</ref> the Omani crude [[price of oil|oil price]] averaged at US$69.7 a barrel in 2018 as compared to US$51.3 per barrel during 2017. The recovery in oil prices also contributed to growth in non-oil economic activities, reflecting inter-linkages, although the dependency of non-oil activities on oil activities has somewhat weakened in the last few years.<ref>{{Cite web|url=https://cbo.gov.om/report/AnnualReport/89|title=Central Bank of Oman Annual Economic Report 2018|website=Central Bank of Oman}}</ref>

According to the [[World Bank]] growth is expected to increase over 2020–21, driven in part by a large increase in gas production from the new Khazzan gas project, and infrastructure spending plans in both oil and non-oil sectors.<ref>{{Cite web|url=http://pubdocs.worldbank.org/en/523771570664044067/EN-MPO-OCT19-Oman.pdf|title=World Bank Oman Economic Outlook October 2019|accessdate=1 January 2024}}</ref> Notably, with [[Khazzan-Makarem gas field|Khazzan]] phase-I becoming operational, the natural gas under the petroleum sector is also emerging as a significant contributor to the Omani economy, with [[BP]] committing to invest US$16 Billion developing the field.<ref>{{Cite web|url=https://timesofoman.com/article/891196/Oman/BP-Oman-to-invest-16bn-for-developing--Khazzan-Gas-Project|title=BP Oman to invest $16bn for developing Khazzan Gas Project|date=2019-02-25|website=Times of Oman|language=en|access-date=2019-12-25}}</ref> Meanwhile, the Special Economic Zone Authority of Duqm (SEZAD) attracted $14.2 billion worth of investments in the form of usufruct agreements signed till the end of 2018.<ref>{{Cite web|url=https://www.omanobserver.om/duqm-zone-attracts-14-2bn-investments/|title=Duqm zone attracts $14.2bn investments|last=Observer|first=Oman|date=2019-07-23|website=Oman Observer|language=en-US|access-date=2019-12-25}}</ref> With a land area of 2,000&nbsp;km<sup>2</sup> and 70&nbsp;km of coastline along the Arabian Sea, the Duqm Special Economic Zone is the largest in the Middle East and North Africa region and ranks among the largest in the world. Duqm is an integrated economic development composed of zones: a sea port, industrial area, new town, fishing harbor, tourist zone, a logistics center and an education and training zone, all of which are supported by a multimodal transport system that connects it with nearby regions.<ref>{{Cite web |title=Duqm: Special Economic Zone Authority |url=https://www.duqm.gov.om/upload/files/brochure.pdf |access-date=29 June 2022 |website=duqm.gov.om}}</ref>

On the fiscal front, government expenditure also increased noticeably in 2018 due to higher spending on oil & gas production, defence, subsidies and elevated interest payments. The government debt also increased to RO 14,492 in 2018 – with the debt to GDP ratio expected increased to 58 percent by 2020,<ref>{{Cite news|url=https://www.bloomberg.com/news/articles/2019-01-02/oil-keeps-oman-on-borrowing-spree-with-6-2-billion-plan-in-2019|title=Oil Keeps Oman on Debt Binge With $6.2 Billion Plan for 2019|website=Bloomberg|date=2 January 2019 }}</ref> leading to constraints on the ability of fiscal spending to support growth and raising sustainability concerns.