Oman country profile

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Oman is the oldest independent state in the Arab world, and is regarded as strategically important due to its position at the entrance to the Gulf.

Sultan Qaboos bin Sa'id has ruled since 1970 when a coup deposed his father, Said bin-Taymur.

The sultan is also prime minister and head of the foreign and defence ministries. Although the economy is dependent on oil, a significant proportion of the population still earns its income from fishing and agriculture. The majority belong to the Ibadi sect of Islam.

The government has looked to remain on good terms with both the US and Iraq in the face of recent tension: in April 2002 Oman signed a free trade agreement with Iraq, while continuing to nurture a strong relationship with the US, from whom it bought a number of the latest F16 fighters in 2001.

Table: Oman at a glance

Government

Government officials

• Head of State, Premier: Sultan Qaboos bin Said

• Personal Representative to Head of State: Thuwainy bin Shihab

• Deputy Premier: Fahad bin Mahmoud al-Said

• Secretary-General: Hamoud bin Faisal bin Said al-Busaidi

• Agriculture & Fisheries: Salim bin Hilal al-Khalili

• Awqaf & Religious Affairs: Abdullah bin Salim al-Rowas

• Civil Service: Hilal bin Khalid bin Nasser al-Ma'wali

• Commerce & Industry: Maqbool bin Ali Sultan

• Defence: Badar bin Saood bin Harab al-Busaidi

• Diwan of the Royal Court: Ali bin Hamoud al-Busaidi

• Education: Yahya bin Saud al-Sulaimi

• Foreign Affairs: Yousef bin Alawi bin Abdullah

• Health: Ali bin Mohammed bin Moosa

• Heritage & Culture: Haitham bin Tariq al-Said

• Higher Education: Rawya bint Saud bin Ahmad al-Busaidiyah

• Housing, Electricity & Water: Khamis bin Mubarak al-Alawi

• Information: Hamed bin Mohammed al-Rashdi

• Interior: Saud bin Ibrahim al-Busaidi

• Justice: Mohammed bin Abdullah bin Zaher al-Hinai

• Legal Affairs: Mohammed bin Ali bin Nasser al-Alawi

• Manpower: Juma bin Ali bin Juma

• National Economy: Ahmad bin Abdulnabi Maki

• Royal Office: General Ali bin Majid al-Maamari

• Social Development: Sharifa bint Khalfan bin Nasser al-Yahya'ee

• Sports Affairs: Ali bin Masoud bin Ali al-Sunaidy

• Tourism: Rajha bint Abdulameer bin Ali

• Transportation & Communications: Mohammed bin Abdullah bin Isa al-Harthi

• State Governor of Muscat: Al-Mutassim bin Hamoud al-Busaidi

• State Governor of Dhofar: Mohammed bin Ali al-Qatabi

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Economy

The government is in the second year of its sixth five-year development plan, which aims at modernising the economy, privatising state utilities, attracting foreign investment, and diversifying the country's industrial base. It has smaller oil fields than its fellow GCC states and these are generally more scattered, less productive and with higher production costs. The economy remains dependent on oil revenues but the government has a stated long term economic goal of moving away from reliance on oil by 2020.

An important factor will be the ability of Petroleum Development Oman (PDO), the consortium that controls 90 per cent of the state's hydrocarbon reserves, to achieve a significant increase in gas production. The government has used the resurgence in oil prices over the last two years to put its fiscal affairs in order, reducing public debt, and investing heavily in civil and industrial infrastructure.

Increased government spending has produced an upturn in construction, with more than $10,000 million of civil, industrial, transport, petrochemicals, oil and gas, and tourism projects planned. Various plans are on the table for grassroots industrial projects, mainly in Sohar, which is set to become the country's industrial centre. These include a 500,000-tonne-a-year aluminium smelter, a 5,000-tonne-a-day (t/d) methanol plant, a 3,500-t/d urea complex and a 75,000-barrel-a-day refinery. The government also hopes to attract high-technology investors to free zones being developed in Muscat and Salalah, and forecasts manufacturing industry making up 15 per cent of GDP by 2020, up from around 5.4 per cent.

The government is committed to a programme of privatisation. It succeeded in selling off Seeb and Salalah airports in 2001, and plans to sell the country's power generation and distribution assets, the national telecommunications network, wastewater treatment, and water distribution. However the plans to sell off a stake in Oman Telecommunications Company (Omantel) have been delayed because of a lack of interest from foreign investors.

Table: Economic indicators

($ million, unless stated)