MUSCAT - Oman is experiencing an impressive economic performance, characterised by high real GDP growth of 5.3 percent, low inflation, and budgetary surpluses, according to a recent review by the World Trade Organistation (WTO).
The country could further boost its economy by removing restrictions on foreign direct investment in areas such as tourism, internal waterways and taxi transport, WTO’s Trade Policy Review (TPR) for Oman said.
Oman's external current account surpluses averaged 8.6 percent of GDP between 2001 and 2007 and a surplus of 11.7 percent of GDP has been projected for 2008.
This performance has been attributed to a surge in oil revenues, which rose from US$8.9 million in 2000 to US$14.5 million in 2006.
The share of fuels in the country's total merchandise exports rose from 82.5 percent in 2000 to nearly 95 percent in 2006.
The review pointed out that the country's primary economic and social priority under its "Omanisation" programme was to generate employment for its citizens.
Twenty-six percent of Oman's 2.6 million inhabitants are expatriates; the country's per-capita income is US$14,500.
Capital receipts and payments were free of restrictions in Oman, whose currency has been pegged to the US dollar since 1986.
Oman's merchandise trade was relatively diversified. The country's main trading partners are the United Arab Emirates and South Korea.
Globally, Oman ranked 44th among merchandise exporters and 57th among merchandise importers.
Thanks to measures the country took to improve its investment climate, foreign direct investment (FDI) more than tripled between 2003 and 2006.
According to the review, Oman's membership in both the WTO and the Gulf Cooperation Council (GCC) were the main factors driving recent changes in Oman's trade policy.
Oman's Minister of Commerce and Industry, Maqbool bin Ali Sultan, said privatisation is "one of the main pillars" of Oman's economic development programme.
The minister defended his country's past reliance on state enterprises.
"At the beginning, the private sector did not possess the resources or expertise to play an active role in the development process, therefore the public sector had to undertake the assignment to fill the gap. This justifies the big role played by the public sector in the economy," he said.
In agriculture, Oman sought to ensure domestic food security by imposing low import tariffs on farm products of which it was a net importer.
The government also supported domestic agricultural production by providing basic infrastructure, soft loans, and free inputs, including new seed varieties, fertilisers and chemicals.
WTO says it appreciates Oman's push to diversify its economy away from crude oil, and its efforts to ensure intergenerational equity in the exploitation of its non-renewable resources.
However, it calls for further reforms, including stronger multilateral commitments on goods and services.
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