Economy of Oman

Economy of Oman Last updated on Wednesday 14th April 2010

Prior to the discovery and exploitation of oil and natural gas in the Sultanate of Oman in the mid-1960’s, its economy used to consist mostly of fishing, agriculture and traditional crafts such as boat-making. However, Oman's economy today maintains a largely traditional sector based on agriculture and the country had also managed to develop a modern economic sector based on oil.

In the mid-1990s, oil production accounted for almost half the country's gross domestic product (GDP) [the total value of goods and services produced]. In 1998, however, the GDP was $15 billion. The government controls the oil and gas sector and therefore dominates the economy. The government has encouraged job growth in the private sector to reduce unemployment . Despite the large contribution of the oil and gas sector to the economy, it employs only about 2% of the workforce.

Agriculture, by contrast, makes up 40% of the workforce. Government services employ 24%, social and personal services 18%, manufacturing, construction as well as other jobs 16%.

Agriculture and fishing

Agriculture in the Sultanate of Oman is largely at the subsistence level and contributes only about 3% of GDP. Dates account for about 90% of the country’s agricultural production. Other major crops include melons, tomatoes and bananas. Goats constitute the main kind of livestock raised. Tuna, mackerel and sardines are the main catches for the developed commercial fishing industry.

Mining

Oman's production of oil and natural gas accounts for 76% of the value of all the country’s exports; it is considered modest compared to other Persian Gulf nations,. Oman's oil production (326 million barrels in 1999) is depleting proven reserves by about 6% every year. Oman also has large natural gas reserves that it has already begun to exploit.

Services and manufacturing

Mostly governmental, Oman's services contribute about 43% of the country’s GDP. Tourism is being developed with the purpose of diversifying the country’s economy. The government plans careful and regular development of the tourist industry by preserving cultural and archaeological sites. Tourism is focused on the Muscat area and other historic interior sites such as the 17th century Ibadi fort at Nizwa. Manufacturing industries, which did not exist previously, have been encouraged and now contribute some 4% of the GDP. Copper cathodes, cement and textiles are among the important manufactured products.

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