The plan is based on a forecast for gross domestic product (GDP) growth of at least 4 per cent a year, although Maqbool estimates that the current growth rate is more than 7 per cent thanks to high oil prices. The 2005 budget based assumptions on an oil price of $25 a barrel. The new budget is likely to increase this to at least $30 a barrel.

However, said Maqbool: 'To rely heavily on depleting oil resources is dangerous.' Diversification is focusing on gas-based industries - mainly at Sohar industrial port, where more than $10,000 million of investment has been attracted - tourism and IT-related industries.

'Some $4,000 million of investment is likely to go into tourism in the next five years,' said Maqbool. 'Foreign investment in the industry is already looking good. The government has a masterplan for the sector which takes into account the type of tourism we want - which is at the middle and upper end. Also, we don't want to copy what other countries have done. There are things in Oman that are different from the rest of the GCC and we want to develop these - the GCC should market itself as a unified destination, with each state offering different things.' The sultanate is also looking at improving its marketing among travellers. Maqbool is chairing a government committee named Branding Oman and US consultant Landor Associateshas been appointed to prepare a study on the issue.

Muscat is also hoping for an economic boost from the free trade agreement (FTA) signed in October with the US - the second GCC state after Bahrain to do so. 'It will be good for Oman because our trade is already relatively free, with low customs duties and no quotas. Hopefully it will lead to more US investment and more technology co-operation, and products from our new projects will gain duty-free access to US markets,' said Maqbool.

Disagreements regarding the legitimacy of bilateral FTAs with Gulf states in light of customs union commitments appear to have been resolved. 'It has been agreed within the GCC that countries can sign individual agreements with the US,' said Maqbool. 'However, in general it is better to go in as a bloc - the GCC is talking about collective FTAs with China, Pakistan, Turkey, India, Mercosur and the EU. Negotiations with the EU have been going on for years but the last few months have brought progress. I am more optimistic than in the past - hopefully a deal will be signed by the end of the year.'