Seventh
Five-Year Plan: Blueprint for sustained
growth
Oman
has launched its ambitious seventh five-year
plan, 2006-2010. The plan calls for
the private sector to play a larger
role than ever before so as to contribute
46 per cent of the earmarked total investment
of RO 13.1 billion. The public sector
would contribute the rest 54 per cent.
At current prices, the economy is expected
to grow at an annual average rate of
3 per cent.
To boost the non-oil industries, the
government expects natural gas-based
industries to grow at an annual growth
rate of 14.5 per cent. The main hub
for natural gas-based industries is
going to be Sohar Industrial Area where
many such projects, including Sohar
Aluminum Smelter project, Polyethylene
project and Oman Aromatics project (at
a total cost of RO 2.8 billion), are
coming up.
The annual growth rate in tourism is
expected to be 7 per cent. The US $200
million ShangriLa's Bar-Al-Jissah project
is nearing completion and, along with
other mega projects such as The Wave,
and the Blue City, it will be a big
boost for tourism. Non-oil merchandise
exports of Omani origin are expected
to grow at 11.60 per cent.
Contribution from the private sector
will mainly come from investments in
gas- based industrial projects (RO 1467
million), tourism projects (RO 958 million),
oil sector projects (RO 896 million)
and residential and other projects (RO
2704 million).
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On the human resources development
front, the main stress is on education
and employment generation. The
focus of the education policy
is to improve the general education
output, expand higher education
opportunities and activate literacy
programmes. |
With 68 per cent of the population up
to or below the age of 24 years, the
seventh plan accords special attention
on generating employment for the citizens.
Thousands of new jobs are expected to
be created for Omanis.
Another notable feature of the plan
is the initiatives related to Oman's
digital society and e-governance. This
aspect involves the designing and management
of the e-government service portal and
the setting up of a unified government
network linking all government institutions.
The exercise also takes into consideration
the preparation, upgrading and implementation
of the security frame for the government
network and the Internet as well as
establishing an emergency and back-up
center.
Though not included in the seventh plan,
the expansion of Seeb and Salalah airports
is under study. The establishment of
airports at Ras al Hadd, Sohar and Duqm
is also under consideration.
The plan has been welcomed by a majority
of the business community. The plan
overall is designed to encourage economic
growth, create employment, enlarge investment
scope and accelerate privatisation.
Sarah Hewin, Senior Economist, American
Express Bank, UK, sums up, "With
expected high oil prices and focus on
non-oil diversification activities in
the new plan, Oman is set for a fast-paced
economic growth which is seen among
other countries in the region."
Budget
2006
Because of steady
and conformist fiscal planning, Oman
ended 2005 on a high note. Instead
of planned deficit of RO 540 million,
the Sultanate closed fiscal 2005 with
a surplus of RO 1470 million in spite
of incurring additional expenditure
burden of RO 331 million. The oil
exports generated additional revenue
of RO 2350 million above the budget
estimates. The higher revenue led
to an impressive GDP growth rate of
21.7 per cent (2004 at 12.5 per cent).
The achievement is more laudable as
the year's best performing economies
like China and India clocked growth
rate between 7-10 per cent.
Assessing the public finance performance
in 2005, Minister of National Economy
and Deputy Chairman of Financial Affairs
and Energy Resources Council Ahmed
bin Abdulnabi Macki said, "The
positive performance covered the approved
budget deficit and financed the additional
expenditure approved during the year.
It also reduced the public debt and
has increased the financial reserves."
The budget lays major emphasis on
the socio-economic development. The
education sector expenditure has been
increased by 17 per cent over last
year. The education sector is allocated
bulk (close to 38 per cent) of the
civil ministries' expenditure.
Keeping in mind the welfare of the
population, the health sector expenditure
has also been increased by 13 per
cent over last year. Similarly, RO
29.8 million has been allocated to
the social security, a 21 per cent
increase over last year's figure.
The oil and gas production expenditure
has been raised by 39 per cent to
RO 196 million.
Of the total expected revenue of RO
3587 million, oil is expected to contribute
70 per cent (RO 2519 million). The
projection is based on an estimated
oil price of US $32 per barrel. But
the oil revenue for 2006 is expected
to be much higher than the government's
projection if we go by the forecasts
of international economists.
Though the government has been conservative
in its GDP estimate for 2006, prevailing
trends suggest double-digit growth
rate for Oman. Another booming year
may make the government further develop
the infrastructure and further push
its non-oil diversification programme. |