Chapter No.3

Geo-Physical and Socio-Economic

Features of Sultanate of Oman and its Diplomatic Relations

26

Chapter No:3Geo-Physical and Socio-Economic Features

of Sultanate of Oman and its Diplomatic Relations.

PAGE NO:

27

3.1: Introduction 283.2: Geo-graphical features 28 3.2.1. Location of Oman 28-29 3.2.2. Economic & Social Indicators of Oman 30-31

3.2.3 .Climate 31 3.2.4. Natural Resources of Oman Economy 32-34 A. Introduction 32 B. Oil Sector 32-33 C. Gas Sector 33 D. Minerals Sector 343.3. Social Features 34 3.3.1. The geographical distribution of Oman population 35 3.3.2. Population 35-36 3.3.3. Population Growth 37 3.3.4. Density of Population 38 3.3.5. Size of Family 38 3.3.6. Fertility and Birth Rate 39 3.3.7. Mortality Rate 40 3.3.8. Age 41 3.3.9. Education 41 3.3.10. Health 423.4. Economic Factors 42 3.4.1. Agriculture 42 3.4.2. Animal Husbandry 43 3.4.3. Fisheries Sector 43-45 3.4.4. Industry 45-46 3.4.5. Labour 46-47 3.4.6. Trade Sector 47-48 3.4.7. Banking Sector 48-49 3.4.8. Tourism Sector 49-503.5. Socio-Economic Political Dimensions of Foreign Policy 50-51 3.5.1. Diplomatic relations 51-52 3.5.2. Social-Cultural Relations 53 3.5.3. Religious Relations 54 3.5.4. Economic Relations 54-55 3.5.5. Political Relations 56

Chapter No.3Geo-Physical and Socio-Economic

Features of Sultanate of Oman and its Diplomatic Relations28

3.1: Introduction : The Omani Economy stands on strong base and diverse sources included

the geographical location at the at most south east of Arabian Peninsula, with

its beautiful features , in addition to Oil and others minerals, and the fisheries

and agriculture sources. The Government of His Majesty the Sultan gives

great attention to all these sources, but gives greater attention to the people

as the main base for development . To have a good information base, the

government has carried the 1st census in 1993 and the 2nd in 2003 and these

census have provide good information to build on all plans. In this chapter

we shall discuss main points relate to Oman, such as Geo-Physical features,

Natural resources, Social and Economic features.

3.2: Geo-Physical Features

3.2.1: Location of Oman The Sultanate of Oman location at the South East of Arabian Peninsula

between 16°.40° and 26°.20° North, and long 51°.50° and 59°.40° East .

The coast line of Omani extend TO 1.700 Km from Arab Sea at South East

to Oman Gulf and ended at Musandam North at Hurmoz Strait. Map of the

location of Oman is given in Map No:( 3.1 ) The boundaries of Oman are the

Republic of Yemen at South West, Kingdom of Saudi Arabia West, and state

of Arab Emirates North, There are many small islands belong to Oman gulf

and Hurmoz Strait as Salama and its daughter and in the Arabian sea as

Masira island and group of Al-Halanyat island. The Sultanate of Oman

controls the most important sea passage in the old, world , and that is the road

between Arab Gulf and Indian Ocean, and from Oman the Camel caravans

had crossed the Arabian Peninsula from East to West and from North to

South. The area of Oman is the 3rd in Arabian Peninsula, it is about

(309.000) km. This area varied from one area to another .Map No:( 3.1 )

Map of Sultanate of Oman

29

3.2.2. Socio-Economic Indicators in Sultanate of Oman.Table No:( 3.1) Indicates the Socio-Economic indicators in Sultanate of Oman.

30

Table No:( 3.1 )

The Economic & Social Indicators in Sultanate of Oman – in 2005

FiguresDescriptionSr:NO

FiguresDescriptionSr:NO

153Tourism – Total Hotels & Motels14309500Area : Km21

11889.8G.D.P. at Current Prices (Mn.R.O)152509Population No:(000)2

4727G.D.P. Per Capita(R.O)168.1

Population Density(person:Km2)3

11279.6Gross National Income(Mn.R.O)1758Hospitals4

4497G.N.I. Per Capita(R.O)18897

Health Centers. Dispensaries & Clinics5

4510.5Total Revenue(Mn.R.O)1945Omani Woman's

Associations6

4207.6Total Public Expenditure(Mn.R.O)

201240Schools7

283Crude Oil Production-Annual (Mn.BBL)21

3024

Institutions of high Education -Government -Private

8

50.26Annual Average Price(US $.BBL)2216Banks9

847489Natural Gas Production(MNSCF)

23364Branches of Banks10

245433233328

-Copper.TonMinerals -Gold .Kg -Silver .Kg

24359Petrol Filling Stations11

10580.9Total Trade Exchange(Mn.R.O)25238Social Houses12

1.U.S.$=0.385R.O

Local Currency:-Rial Omani=1000Bs2648869

The Cases Recipients of Social welfare13

31

We can divide to the following sections from the North coastal plains as

Batina rich plain which has at North West of Muscat (Capital) it extends

about 270 km.

It is considered as the mainly agricultural which extend from heads of

mountains at Musandam to Ras AL Had (at most extension to A. Peninsula

from the South East in the Indian Ocean) in a shape of a bow from North

West to South East.

The summit of these mountains reaches 3000 m at AL Labal Akhdar, at

Musandam it Oman & Iran ; on both sides of these mountains run many

valleys west of which extends a vast desert extends from the west of the empty

quarter. At the South where Governorate of Dhofar we find coastal beaches

which extend from 8-10 km, these coasts are rich with fisheries.

Dhofar Mountains extend from East to West with a length of 400 km. From

Halanyat Islands to Yemen boundaries. The chain of Dhofar mountains

consists of Samhan at the East, Qara at the mind, and Qamar at the West the

at most height reaches 2.500 m.

The geographical areas vary from plains to mountains to valleys to deserts,

and population varies accordingly.

The sea, plain and mountain have participated in making Oman different

than other areas in Arabian Peninsula, and this variation has created a

culture that remain in history till today.

3.2.3: Climate :- The Sultanate of Oman Lays North & South Tropic of Cancer, so it is

considered in the zone of hot dry regions, but Dhofar in the South Lays in the

Tropical zone. So climate in Oman differs from one area to other . At the

coastal areas we find hot humid climate at summer and at the interior areas

it is hot dry except some high lands where climate is moderate at through the

year . Rains are few and irregular at the North through some areas have

some times heavy rains, mainly at winter , but in Dhofar the seasonal

monsoon brings heavy rains (June to October).

32

3.2.4. The Natural Resources of Oman Economy.

A. Introduction. The interest in diversification of the production sector has been known for

along time . Since the Sultanate of Oman recognized the importance of

depending on renewable resources to a single depletable source which is the

Oil . The successive development plans pursued this change . this concern was

clear in the Vision for Oman's Economy ( Oman 2020 ) which aims to increase

the dependence on the Natural Gas sector ; in addition to taking care of the

Industry ; Trade ; Tourism ; Financial Services and other production sector .

The economic diversification strategy forms one of the main fundamental

dimensions to achieve the Vision for Oman's Economy ; together with the

other strategies for sustainable development within a stable Macro-Economic

framework and development for human resources and the private sector .

We shall discuss the main production sector in this chapter .

B. Oil Sector The Oil Sector emerges, among all economic sectors as the most important

sector according to its contribution to the gross domestic product (GDP),

export earnings and government revenues. The importance of the Sector, also

stems from its strong indirect effect on the various national economic sectors.

First through the circulation of its revenues internally by government

expenditure, and secondly through its forward and backward linkages with

other sectors. The two prominent features of the oil are its fluctuation in

international price and non- renewable nature . In accordance with this

Oman’s development strategy aims at reducing the dependence on oil through

diversification of the national economic production base. The vision for the

sector is reliant on achieving the optimal utilization of the national wealth of

the Oil reserves through determining the production level that secures the

required revenues to meet the burdens of development without interfering

with the required technical measures and taking into consideration the

importance of oil for the future generations.

33

The vision aims at diversifying the production base so that the Oil sector

contribution to GDP be decreased from 33.5% in 1995 to about 9% in 2020.

From other side, the statistics of the last 5 years plan (2001-2005) indicate that

the Oil Sector has participated in the GNI with a sum of or 14660.7 m)

The PDO is considered the mother company in the field & Oil exploration in

the S. of Oman H produces about 95% of S. of Oman oil alone it works in 89

fields out of 95 fields in the S. of Oman.

C. Gas Sector The Sultanate since the dawn of its blessed renaissance , and for the

purpose or diversing its resources and production base, concentrated on

increasing the natural gas reserve and maintenance of this resource. The

Sultanate, also aims to replace the other power sources by the Natural Gas to

meet the direct demand of electrical power generation.

The vision for Oman’s Economy very relies on the Natural Gas Sector to meet

the challenge of the dwindling Oil reserves.

Based on this, the vision for the Natural Gas Sector is based on increasing the

reserves of the Natural Gas and its optimal utilization, such that the

contribution of the Sector in the GDP shall not be less than 10% in 2020.

The sector has participated in the National Income during the 6th 5 years

plan (2001-2005)with a total sum (OR 1208.8 m) , i.e. with a yearly

development during the plan(32.9%)This indicates the importance of this

sector in the Omani Economy.

The reserve of Gas reaches 28.32 Trillion sq/feet in Jan 97. He was 27.45

Trillion sq. feet m Jan 96 . The project of Liq Natural Gas Complex which has

been executed at Qalhat (Eastern region) at the year.

34

D. Minerals SectorThe Minerals sector is considered one of the sectors that is expected to

contribute to achieving the economic diversification, as the Sultanate

produces many of the minerals ores such as Copper, Gold, Silver, Chromite,

Manganese, Marble, Gypsum and Limestone.

The sector has many capabilities that qualify it to take an effective role in the

diversification of the production base, as its products are used as raw

materials and inputs for many of the domestic industries. The importance of

the sector arise from its interlacing relations with many of the other economic

sector such as manufacturing agriculture, construction , buildings and

construction of roads and ports. In accordance with the vision for Oman’s

Economy : Oman 2020, it is expected that the sector will meet fully the needs

of the Omani market from the minerals raw materials which will save the

foreign currency. To achieve the objective of national income diversification,

it is expected that the sector will process and export the surplus of the needs of

the local markets to abroad , which will contribute to the amelioration of the

trade balance.

The Minerals sector vision include increasing its contribution to the GDP

from about 0.6% in 1995 to about 2% in 2000. Within the endeavors of the

government to derisively the source of the income, and due to the importance

of this sector, the statistics in the 5 years plan (2001-2005) indicates that this

sector has participated with a sum of ( DR 96. 3M) in the National income. It

is important to mention that there are many factories in the Sultanate

depends on the raw materials in Oman as Cement, Marble, Glass, and

Ceramics.

3.3. Social Features.The social features of Oman are related to the Population of Oman, Size of

family, Fertility and birth rate, Mortality rate along with the forecasting of

Omani an Population in 2020. These features are discussed in this section.

35

3.3.1. The geographical distribution of Oman population.The total population of Oman in December 2003 has reached about (2341000)

persons, that is by increases amounted to (323000) persons or (%16) what was

in then in the year 1993.

And the population of the Sultanate distribution in (8) administrative

portions, it's (3) Governorates and (5) Regions, the bigger area Dhofar

Governorate (99300) sq/K.m , and the smaller Musandam Governorate

(1800)sq/K.m.

As far as the number of the population is concerned AL Batinah Region has

come the first position where it's alone about (%27.9) out of the total

population of the Sultanate and it followed by Muscat Governorate about

(%27.0) and that these two position affricating alone (%54.9) out of total

population of the Sultanate, whereas the les population it's AL Wasta region

and it followed by Musandam governorate where the percentage of the

population in both does not increase more than (%2.2) out of the total

population.

3.3.2. Population of Oman. Scientific Planning and logical study of projects constitute the base for

national development since early of renaissance.

To keep this on, the Government of HM the Sultan is providing update data

base on both sectoral and national bases.

The population of the Sultanate is estimated as 1-500.000 at the first Five-

Year plan (1976-1980), So plans an programmers are put on estimated data

base during the first Five-Year plan, with some partial surveys . In 1993 the

first general census had been carried out for people , houses, and

establishment .

This census provided a basic data used for the Fifth (96-2000) and the Sixth

(2001-2005) plans . IN 2003 the second census has been done, which helped to

provide total and update data base, on which all programmers are planned.

36

The difference in population can be noted within years between the first

census 1993 and the second census 2003 from the indicators in the table

No:( 3.2 ).

Table No:( 3.2)

Dissimilarity between 1993 and 2003 censuses

Sr: No Statements

Censuses

1993 20031 The gross population of sultanate of Oman 2,018,074 2,340,815

2 The total number of Oman citizen 1,483,226 1,781,558

3 The percentage of Oman citizen 73.5% 76.1%

4 The total number of non-Omani 534,848 559,257

5 The percentage of non-Omani 26.5% 23.9%

6 Population density “person/km²” 7.5 7.6

Source: Census Reports(1993&2003)

The results of the second population census in 2003 showed that Oman's

constituted (76.1%) of the total population, whereas non-Oman's constituted

(23.9%). The total increase in the population between the two censuses

reached (323) thousands, or an average annual growth rate of about (1.8%)

while the percentage of non-Omani population decreased from (26.5%) in

1993 to (23.9%) from the total population in 2003. the table No:( 3.2 ) showing

dissimilarity between 1993 and 2003 census.

3.3.3. Population Growth (1993-2020).37

The expects of Oman population up to year 2020. According to 1993 census, at

current annual growth 3.7%. It can show in this diagram No( 3.1 ).

Diagram No:( 3.1)

Source: Long-term Development Strategy(1996-2000).

3.3.4. Density of Population.

38

On author had the population density in Sultanate of Oman in (1.sq/K.m)

about (7.6) persons and it is thereby increases about (1) person what was then

in the year 1993 where recorded according to the results of previous Census

(6.5). Unlike this density have a big disparity between the Governorates and

Regions as clear from the table No:( 3.3 ). Table No: ( 3.3 )

Density of Population

Governorate/Region Area

Population

Density

person/Km

2

Distribution of

Population (%)2003 1993

AL Batinah Region 12500 52.3 27.9 28.0 Muscat Governorate 3900 162.1 27.0 27.2 Ash Sharqiyah Region 36400 8.6 13.4 12.8 Ad Dakhliyah Region 31900 8.4 11.4 11.4 Dhofar Governorate 99300 2.2 9.2 9.4 Adh Dahirah

Region

Adh Dahirah Region 44000 4.7 8.9 9.0AL Bowrami Governorate

Musandam Governorate 1800 15.8 1.2 1.4AL Wusta Region 79700 0.3 1.0 0.8Sultanate 309500 7.6 100.0 100.0Total population ---- ---- 2340815 2018074Source: Census Reports(1993&2003)

3.3.5. Size Family. The average family size stood at (8) persons according to the result of 2003

population census compared to a family size of (5) persons for non-Omani

families. The reason behind this discrepancy is that most non-Omani families

are small in size or constituted of individuals living together but not related to

each other.

3.3.6. Fertility and birth rate.During the 1970’s and 1980’s of the twentieth century, the sultanate witnessed

high promotion growth rates as a result of the prevalence of high fertility and

birth rates. These high rates have started to decline since the beginning of the

39

last decade of the past century for the number of factors. Notably among them

is the increase of the mean age at first marriage which reached (25.0) years

among females and (28.0) years among males during 2003, as compared to

(23.5) years for females and (26.5) years for males in 2000. The second factor

has been the introduction of the birth spacing programme by the ministry of

health since 1994, with the prime aim of improving mother and child health.

As a result of this programme, the average birth interval has increased from

(25.5) months in 1995 to (29.8) months in 2000. All these factors have helped

in the considerable drop of births from (27,917) in 2000 to (45,602) in 2005. it

is worth noting here that nationalization of non-Oman's has not been one of

the factors responsible for the population increase in the sultanate, as the total

number of those who had been given Omani nationality reached (735) persons

during the period 2000 – 2005, with females accounting for (69%) of them.

Main Indicators of fertility rates as age groups in the S. of Oman, as census

2003 in the table No( 3.4 ).Table No:( 3.4 )

Fertility Rate

No. of Born Fertility rates (per 1000) Age Group

1397 10.9 15-19

10313 94 20-2415137 198.6 25-298897 191.3 30-34

5213 136 35-391707 61.9 40-44453 19.8 45-49

General rate of born (For each 1000 of population = 24.4 rate of General Fertility = 3.6%Source: Census Report s .2003

3.3.7. Mortality rate. The improvement in health services in the sultanate in addition to the

improvement of the economic, social and cultural conditions for women have

led to the decline in maternal mortality ratio as well as infant and child

mortality rates between 2000 and 2005. This decline is a natural results of the

40

increase in the immunization coverage against infectious diseases, which led to

the decrease in the incidence if these diseases. The percentage of infants who

has received immunization against polio, measles, and tetanus ranged between

(98%) to (100%) during the above referenced period. The expansion of health

services and the improvement of the different health indicators have resulted

in the decline of the crude death rate which in turn contributed towards the

increase in life expectancy at birth for both males and females. Main

Indicators of Deaths in the Sultanate of Oman between years 2000-2005 . in

the table No( 3. 5 ).

Table No:( 3.5 )

Mortality Rate

Indicators 2000 2005

Maternal Mortality (per 100,000 live births) 16.1 15.4

Infants mortality rate (per 1,000 live births) 16.7 10.28

Under five mortality rate (per 1,000 live births) 21.7 11.05

Crude death rate (per 1,000 population ) 3.65 2.53

Life expectancy at birth

Males

Females

73.38

72

74.30

74.28

73.10

75.42

Source: Statistics Reports(2000-2005).

3.3.8. Age.The main indicators for proportional distribution according to age factor in

the Sultanate of Oman, as results of census 2003.Table No:( 3.6 )

Age wise classification of Population

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Age factor Omani Non – Omani Total

0-14 40.6 12.3 33.8

15-64 56.2 87 63.6

65 3.2 0.7 2.6

Total

100.0 100.0 100.0

1,781,558 559,257 2,340,815

Source: Census Reports.2003

3.3.9. Educational.Educational indicators in the Sultanate of Oman as the results of Census 2003,

in the table No:( 3.7 ).Table No:( 3.7 )

Educational Indicators

Sr:No Disruptions Figure

1 People in the age of pum. education 309,532

2 Students imprimed 303,512

3 Education (Prim ed) 21,526

4 Student (For each Teach) 29

5 Student (For each class) 14.5

6 Ratio of Total joined 98.1%

Source: Census Reports.2003

3.3.10. Health. Health indicators in the Sultanate of Oman as the results of the lost census

2003. in the table No:( 3.8 )

Table No:( 3.8 )Health Indicators

42

Disruptions Figure

Doctors (For each 1.000) 1.59

Nueses (For each 1.000) 3.67

Beds (For each 1.000) 2.23

People most exposed to health rips

Women (pregnant (15-49) 446,678

Children (less than 5yrs) 215,531

Source: Census Reports.2003

3.4. Economic Features.The Economic features of Oman include the Agriculture, Animal Husbandry,

Fisheries, Industry, Labour, Trade, Banking and Tourism. The details of each

are given in the following paragraphs.

3.4.1. Agriculture. The Agriculture Sector (with both Plant and Animal Sectors) represents

one of the basic dimensions in the national economy’s structure , specially in

satisfying the largest possible needs of local consumption from foodstuffs. Its

importance extend to include the exchangeable relations, between it and other

national economy’s Sectors. The agriculture supplies the industry with the

substances that are include in foodstuff industry and it is expected that this

relation will increase with agriculture industrialization through the private

sector. In addition, it has large contribution to the exports and improvement

of commercial balance. The marketing of agriculture products and inputs for

production comprise an essential part of the activity of Trade Sector locally

and abroad, since it supplies the products and take the inputs. The sector is

effected and affects many other sectors.

3.4.2. Animal Husbandry. The Animal Wealth Sector is considered as one of the important production

sections, since the animal husbandry is scattered all over the Sultanate

agriculture regions, inspite of the climate and geographic differences. Also,

the animal wealth is considered as a basic source of nutrition and income to

43

many of the animal owners. The sectors endeavors to provide suitable

incentives to encourage increased production of animal proteins and linking

its expansion with other agricultural activities.

The vision for the sector is related to the Vision for Oman’s Economy Oman

2020, since the potentialities relished by the sector allows the possibility of its

development and consequently the diversification of the production base of

the national economy and the sustainable growth of national income. The

vision for the agriculture sector aims to achieve an annual growth rate not less

than 4.5% and thus increasing its contribution to the GDP to 3.1% in 2020

compared to about 3.0% in 1995. From the figures and statistic of the last 5

years plan in this sector, it show that it has participated in National income

with a sum of (OR 539.6m). The total area of Farms is 101350 Hectors, out of

which 61500 Hectors are cultivated of which 42900 Hectors with long life hope

and 18600 Hectors seasonal crops. The efforts are continuing to introduce

modern irrigation systems in the farms & Nationals, also construction of

protection done against valley’s floods. In the field of animals resources

efforts are continuing to breed better animals about 1406000 of cows, sheep,

and camels ) efforts are also carried on the improve animals of milk

producing though better methods of feeding and housing.

3.4.3. Fisheries SectorThe Fisheries Sector is considered one of the important Sectors in the

Sultanates economy due to its economic potentials involving the fisheries

resources whereas the Sultanate’s coasts are honored by abundance and

diversity of these resources.

In order to achieve its role, much efforts should be exerted towards the

optimal utilization for all available resources to achieve the economic

objectives of the Sultanate.

On the top of these efforts, is the diversification of national economic

resources and achieving food security for the Sultanate and self- sufficiency of

this major nutritional commodity. The Sector is distinguished by important

44

characteristics in the framework of its relation to a number of other economic

sectors, through establishment of industries for both foodstuffs and forages to

contribute; to the availability of the food materials to the animal wealth. The

export activity for fish is honored by a large attention due to its effective

return to the national economy due to its high chances for development &

growth through formulation of standard for quality control and observance

of the international measure and specifications followed by new systems for

sea-foods and required by fisheries importing countries. Since the fisheries

resources are not inexhaustible large resource , but limited resources liable

for depletion, therefore it is of necessity to seek better utilization and

protection from depletion and exhaustive fishing and amelioration of

management system and its improving to ensure the continuity of its

utilization with the required economic efficiency. The sector is considered as

a source of living for a large number of Oman citizens specially those living in

the coastal areas extending from Musandam in the North to Dhofar in the

South, in addition to the other professions and activities related to fishing

such as marketing, transport, preparation and other services. The sector has

a significant economic potential enable it to accommodate a large ratio of the

investment of the Government and private sector for a long period. The most

important of which is, the availability of Fishery Stock estimated for surface

and bottom fishes at about 817 thousand tons, of which , 278.8 thousand ton

available for exploitation if the stock is rehabilitated and the fishing seasons

have been organized and introducing the operation of handling and

processing for same varieties and development of utilization techniques.

The vision for Oman’s Economy rely on the fisheries sector since it is

expected that the growth of the sector will till 2020 accelerate to 5.6% per

year raising its share in the GDP from 1.1% in 1995 to about 2% in 2020.

Due to the geographical location and the long beaches of the Sultanate of

Oman, so this sector has great importance in the National Income. The

statistics of the last 5 years plan analyses in these research indicate that this

45

sector has participated with an amount of (OR 277,9m) in the National

Income. In addition to self-satisfaction from fishes with about 100%.

3.4.4: Industry Sector.The manufacturing sector assumes a distinct and axial role in sustaining

development, due to its interlacing relations with other sectors of oil, Gas,

Agriculture, fisheries, trade, minerals and others. Development in the sector

will reflect a positive effect on the improvement of these sectors. And hence on

the national economy. This will lead to provide more new chances of work to

assimilate the increasing educational graduates and the improvement of these

sectors, and status of the balance of payment. Through increased exports and

substitution of import, and strengthening the connection of the national

economy with the international Economy to benefit from the comparative

advantages of the sultanate through the optimal exploitation of all the wealth

and natural resources in the sultanate and for assimilation and upgrading of

technology.

The vision for the industry sector is related to the vision for Oman’s

Economy: Oman2020 in the sense that it provides the basis for diversification

of the economy base, and development of the national income sources, and

finding new and alternative sources for the Oil revenues through increasing

the investment in income generating projects, specially in manufacturing

industry actives and encouraging private sector industrial investments in the

different regions of the sultanate. Paying attention to qualifying the national

human resources to take their role in the development and improvement of

the industrial sector.

Also encouraging scientific Researches and researches of development and

Transfer of new technology and meeting the finances of the infrastructure to

satisfy the sector requirements.

The vision for the Sector aims to increase the value added in an accelerated

manner to top the average annual growth rate targeted for the national

economy for the period 1995-2020 to raise its contribution to the GDP from

46

5% in 1995 to 15% by the end of the year 2020 The industry is important for

the development of nations, without it no real development can be achieved ,

so in this regard we mention that this sector has participated in the G.N.

income of the Sultanate, in the last 5years plan (2001-2005) with a sum of

5416,4 Mn. R.O. It is important to mention that the Government encourages

to establish General Companies, and Foreign investment particular in these

companies (upto 49% of the shares in the major industrial projects, which are

considered as a joint venture ).

3.4.5. Labour.Indicators of Labour Force in the Sultanate of Oman as the results of census

2003 only Civil Nationals and Non Omani are given in table No:( 3.9).Table No:( 3.9 )

Labour force

Description Non Omani Omani Total

Figure % Figure % Figure %

Government

Employee (Civil)

23,969 3.95 99,076 16.37 123,045 20.31

Labour in private

Sector

407,816 67.33 74,816 12.35 482.632 79.69

Total 431785 71.28 173892 28.72 605677 100

Source: Census Reports.2003

It is observed from table No:( 3.9 ) that the percentage of Non-Omani

Labours is higher ( 71.28%) than Omani Labours ( 28.72%).

However there are 16.37 percent of Oman workers as government employees,

whereas the corresponding percentage of Non-Omani in government service is

only 3.95 percent.

3.4.6. Trade Sector.Trade is considered as the prime mover which regulates all economic

activities . This is due to its distinguished leading role through stimulation

of mechanism and services products promotion, and contribution in

encouragement of production. According , it links the economic sectors and

47

their development , aiming to achieve the sustainable development and

provision of more work opportunities. Due to this, the sector assumes a

significant importance in the Sultanate.

Trade sector in the Sultanate have several major constituents that could

increase the trade activity and enables the sector to assume its leading role.

Such constituents include the strategic location of the Sultanate in the middle

of the old three constituents , the state adoption of the philosophy of free

economy and reliance on private sector, the political stability and security,

and the availability of infrastructure, as well as the integrated legal and

legislative systems.

The vision for trade sector is linked to the vision for Oman’s Economy:

Oman 2020 in terms of provision of basic constituents for the development

and improvement of the sector with the aim of diversifying the economic

base, development of national income resource and finding new resources,

besides the Oil revenues. This will be achieved through broadening the

economic base, which will increase the trade exchange volume through

emphasizing on the export drives of Oman’s Economy, utilization of the

strategic location in increasing export, re-export and transit operations. All

these aim at making Oman an International Centre for Trade and Fiscal

Services. In addition, the development of the legal frameworks for abolishing

restrictions and obstacles that limit market dynamism.

The vision for the Trade sector aimed at rising its relative contribution in the

GDP to 15% by the end of 2020. Due to the importance & Trade and its vital

role in the economy, so the government gives great importance to this sector

and that leads to the participation of trade in the N Income in the 6th5years

plan (2001-2005) with a sum of or 5178m.

The commercial Agreements with friendly countries as the trade agreement

with Islamic Iranian R. in July 03, and the Economical Cooperation

Agreement with Belaries in 17th March 2004, open great opportunities for

trade cooperation generally . In addition the Sultanate is a member in a

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member of Economical groups as GCCC, Arab Free Trade Zone, The League

of Indian Ocean Countries, and the WTO.

3.4.7. Banking Sector.The Banking Sector plays an important role by way of providing an effective

instrument for directing the monetary policies and securing the fiscal balance

and economical stability . The Banking service contribute, beside the other

fiscal intermediary services, to enhancement of the economic activity and

acceleration of development through mobilization of savings and funding of

investment activities by the different economic sector. The banks are

considered an important tool in increasing the efficiency of fiscal

intermediary.

The means if follows in mobilizing savings, credit offering and meeting of

payments, have noticeable effects on the implementation of the objectives of

the plans for Economic and Social Development due to that, the banks have

the ability to raise the level and efficiency of the different production

establishments which further its contribution in the GDP.

The vision for Oman’s Economy aimed at transforming the Banking Sector

into dynamic sector capable of offering improved financial service and grow

at accelerating rates leading to raising its contribution to the GDP from about

2.6% in 1993 to about 5% in 2020.

This sector has participated in the National income within the last 5 years

plan, with a sum of 1653.7 Mn.R.O.

The fund system constitutes of the Central Bank ( constitutes in 1974) many

local banks , branches for Foreign banks , in addition to two specialized

banks, Housing Bank (constituted 1977) and Oman Development bank

( constituted 1979) and exchange companies.

3.4.8: Tourism SectorThe Tourism Sector is distinguished by its broad and strong interlacing

relations with other Sectors, such as industry, Agriculture and Services. The

development of the Tourism Sector leads to the activation of other Sectors and

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consequently , the development of this Sector is considered as one of the

effective mechanisms for the incessant growth of the national economy . Many

countries seek the attraction of foreign investments in tourism areas through

furnishing the suitable legislative environment.

The Tourism Sector in the Sultanate is characterized by solid components

that qualified it to take a distinctive role in accelerating process of

diversification of the production base of national economy ant its activation.

The most prominent component being the strategically geographical location

of the Sultanate whereas, the Sultanate is located in the for South East of the

Arabic Peninsula with its coast extending to about 1700 kilometer from

Hormuz Strait in the North and to the boundaries adjacent to the Yemen

Republic, and thus emerging at three seas which are the Arabian Gulf of

Oman and the Arabian Sea. The entire Sultanate is dotted with many of

historical antiquities , fortresses and forts which are in the midst of a series

of mountains and the three seas, in addition to the clean environment .

The Sultanate is famous for its kindness and hospitality of its people, political

stability and security , and the presence of tourism infrastructure in the form

of hotel chains and tourism establishments.

The sultanate has great expectations on this sector to be as an important

source of the Oman economy due to what has been explained.

The statistics of the 6th 5 years plan (2001- 2005) indicate that thus sector

has participation in the National Income with a sum of 337 Mn.R.O.

Due to the importance of Tourism in the Sultanate , Ministry of Tourism was

declared through Royal Decree No: 61/04 HM has stated a clear vision for

tourism which concentrates on the objectives due to the importance of this

section in diversification of National Income.

3.5. Socio-Economic Political Dimensions of Foreign Policy. The Sultanate is working to improve its mutual relations with other

countries to achieve the common interests, at the same time it is keen to use

50

these relations to sustain its economic role, and to serve the objectives of the

economic development within the plan.

In this context, the Sultanate has played an important role to develop the

cooperation and integration between the GCC as at the early stages of the

council constitution in 1981, or during the post years mainly within the

meetings of the council on all levels, to enable the council to improve its

mechanism, and positive interaction with regional and international

developments for the welfare of its people.

The Sultanate is playing an important role to develop the economic

integration between the GCC members, and to enhance the custom’s Union

that started in 1st January 2003.

And to apply all the regulations of citizenship, including the rights of Real

Estate ownership, and in addition to that the Sultanate has worked, through

the dual channels, to develop its relations with GCC, through the mutual

committees with UAE, Qatar & Kuwait to give an example that can be

pillowed between GCC. From an another side, the Sultanate is activating the

economy in the Sultanate and the Arab Gulf Region.

So it works together with GCC to expand their trades with EU. The

interaction between the GCC is coincide with Arab countries movement

to develop the mutual relations with friends for a better cooperation

environment within the Arab Countries League.

In this context, the Sultanate has joined the constitution of Arab Free Zone,

and played an important role in the Arab Free Trade Area, and works to

activate the role of Arab C. League for the welfare of the countries and people

of the region, and the Sultanate gives a good for problem’s solving with

neighbors, and could reach agreements over borders with them.

The Sultanate of Oman has joined WTO in 1996 and in 1997 the Sultanate

and the other countries of the Indian Ocean has constitute the

IORARC(Indian Ocean Run Association for Regional Cooperation) which

aims to improve the commercial relations between these countries.

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In 1998 has reached a common trades with USA, the EU, Canada, Japan,

Australia, New Zealand and Switzerland from the other side, the Sultanate

has signed an agreement with Morocco the constitute a joint council for

businessmen, in 10th of Feb. 1999, and in 17th of March 2004.

The Sultanate has signed an agreement with Bella Russia for economic

cooperation and political understanding, another agreement signed with USA

to develop commercial and investment relations in the context of this far

vision, the political relations of the Sultanate have extended over the world,

which reflects its greater role within the past 35 years(1970 – 2005).

The organizations and Authorities that have relations with the Sultanate,

either in the Gulf, Arab world, Islamic or International are discussed.

3.5.1. Diplomatic Relations.

The diplomatic relations of Oman with the world countries are given in

table No:( 3.10 ).

Table No:( 3.10 )Analysis of Diplomatic Relations of Oman with the world countries

Year Names of the countries

1992 Albania, Armenia, Azerbaijan, Belarus, Estonia, Greece Hellenic, Guinea Bissau, Iceland, Kazakhstan, Korea North, Kyrgyzstan, Lithuania, Moldova, Mongolia, Turkmenistan, Ukraine, Uzbekistan, Vietnam,

1974 Algeria, Austria, France, Germany, Italian, Italy, Korea South, Lebanon, Morocco, Qatar, Romania, Saudi Arabia, Yemen,

1978 Argentine, Belgium, Canada, Chile, China, Cyprus, Mexico, Spain, Sudan,

1981 Australia, Burkinafaze, Comoros, Gabon, Guinea, Maldives, New Zealand, Nigeria, Sri Lanka, Tanzania,

1979 Bahrain, Brazil, Denmark, Finland, Mali, Sweden,

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1984 Bangladesh, Brunei Darussalam,

1986 Bolivia, Jamaica, Peru, Uganda, Venezuela, --- Bosnia and Herzegovina, Honduras, Macedonia, Mauritania, St. Lucia,

Slovenia, South Africa, Wanda,

1990 Bulgaria, Hungary, Poland, 1975 Burundi, Jordon,

1989 Chad, Ghana,

1985 Colombia, Russian Federation, Singapore,

1991 C’Oted’Ivoire, Mauritius, Nicaragua, 1994 Cuba, Eritrea, Panama,

1993 Czech, Guatemala, Latvia, Mozambique, Slovakia, 1977 Djibouti, Indonesia, Nepal,

1982 Ecuador, Malaysia, Rwandese, Zaire, Zambia, Zimbabwe, 1972 Egypt, India, Iran, Kuwait, Netherlands, United Arab Emirates,

United State of America,

1995 Ethiopia, 1980 Gambia, Luxembourg, Malta, Niger, Norway, Philippines, Somalia,

Switzerland, Thailand,

1976 Iraq, Kenya, Portugal, Turkey, 1987 Ireland, Senegal, Syria, Uruguay,

1973 Japan,

1971 Pakistan, Tunisia, U.K.& Northern Ireland,

1983 Seychelles, Sierra Leone, Source: Ministry of Foreign Affairs ( List of Diplomatic Relations between Sultanate and the Countries

of the World 1995 -96).

3.5.2. Social and Cultural Relations. In order to achieve the common interests the Sultanate is working to improve

its relations with other countries, The Sultanate is playing an important role

to develop social and cultural relations with the world countries.

Table No:( 3.11 ) given details of the organizations at the national and

international level with whom Oman has established its relations. Table No:( 3.11 )

Social and Cultural RelationsYearName of OrganizationSr:No

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Gulf Organization:-1. Arab Culture for Educational Research Higher Education Council…… ...19732. Arab Education Office for the Gulf States ………………………….….…...19793. Arab Gulf University…………………………………………….……..……. 19804. Gulf News Agent……………………………………………………….……...19765. Gulf Television Board………………………………………………………...19806. Technical Office for Communication(Gulf States Co-operative Council ).1982

1.

Arab Organization:-1. Arab Girl Guides Officer……………………………………………………….19762. Arab Health Ministers Council………………………………………………...19753. Arab Housing Ministers Council……………………………………...……….1982 4. Arab League Educational Cultural and Scientific Organization……...…….19735. Arab Scouts Office……………………………………………………...………19766. Arab Social Affairs Ministers Council…………………………………...……19807. Arab Social Defence Organization Against Crime……………………...…...19738. Arab States Broadcasting Union……………………………………………….19729. Arab Telecommunication Union……………………………………………….198310. Arab Youth & Sports Ministers Council………………………………...…..198011. Arabsat………………………………………………...……………………….197612. Organization of Arab Cities…………………………………...……………...1971

2.

Islamic Organization:-1. Islamic Education, Scientific and Cultural Organization (ISESCO)………..1980 2. Islamic History and Cultural Research Centre……………………………….19763. Islamic International News Agency……………………………………………19704. Islamic States Broadcasting Organization…………………………………….1975 5.Islamic States Centre for Statistical, Economic and Social Research Training………………………………...…….1977

3.

International Organization:-1. Internal Association of Schools and Institutes of Administration………...…19862. International Organization for Training and Welfare of the Disabled……….---3. IUAT (International Union Against Tuberculosis)…………………………...19854. IUCN (International Union for Conservation of Nature)…………………....19755. International Union of Child Welfare…………………………...…………….19806. World Association of Girl Guides & Girl Scouts………………...…………...19877. World Council for Welfare of the Blind………………………………...…….1979

4.

Source: Ministry of Foreign Affairs ( List of Diplomatic Relations between Sultanate and the Countries

of the World 1995 -96).

3.5.3. Religious Relations. Oman itself Muslim country . It has relations with several religious

Institutions. The table No:( 3.12 ) given the details of such relations of Oman

with different religious organizations. Table No:( 3.12 )

Religious Relations

YearName of OrganizationSr:NoIslamic Conference Organization (ICO)………………………………………...1972al-Quads Fund(Jerusalem)………………………………………………………..1976International Committee for the Presentation of Islamic Heritage…………....1978

1. 2. 3.

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Islamic Capitals Organization…………………………...……………………….1982Islamic Fiqh Council……………………………………...……………………….1982

4. 5.

Source: Ministry of Foreign Affairs ( List of Diplomatic Relations between Sultanate and the Countries

of the World 1995 -96).

3.5.4. Economic Relations. The economic relations of Oman are established with different

organizations at the national and international level. It is depicted in table No:

( 3.13). Table No:( 3.13 )

Economic relationsYearName of OrganizationSr:No

Gulf Organization:-1. Arab Gulf Cooperation Council………………………………...……………..19802. Arab Gulf States Joint Programme Production Organizations…………......19823. Cooperation Council States Specifications and Standards Board…………...19824. Gulf International Bank………………………………………...……………...19765. Gulf Organization for Industrial Investments…………………………...…...1976 6. Gulf States Labour & Social Affairs Ministers’ Council Continuity Office..1978

1.

Arab Organization:-1. Arab Academy for Maritime Transport………………………...…………….19752. Arab Bank for Economic Development in Africa……………………...……..19753. Arab for the Study of Arid Zones and Dry Lands………………………...….19754. Arab Civil Aviation Council……………………………………………………19735. Arab Fund for Economic & Social Development……………………………..19756. Arab Industrial Development Organization…………………………………..19807. Arab Interior Ministers Council……………………………………………….19828. Arab Labour Organization………………………………………...…………..19739. Arab Monitory Fund……………………………………………………...……197710. Arab Organization for Agriculture Development…………………………...197411. Arab Organization for Specifications & Standards…………………………197412. Arab Planning Institute………………………………………………...……..198013. Arab Postal Union…………………………………………………...………...197114. Arab Tourism Union…………………………………………………………..198415. Arab Transport Ministers Council…………………………………………...198516. Arab World Institute in Paris……………………………………...…………198717. Inter-Arab Investment Guarantee Corporation………………………...…..1977

2.

Islamic Organization:-1. Islamic Center for Commercial Development………………………...………19792. Islamic Center for Technical and Vocational Training and Research…...…19783. Islamic Development Bank……………………………………………………..19744. Islamic Solidarity Fund……………………………………...…………………1974

3.

International Organization:-1. International Bank for Reconstruction and Development……………...…...19712. International Civil Aviation Organization……………………………...…….19733. International Fund for Agricultural Development……………………...…...19834. ILO…………………………………………………………………...………….19945. International Maritime Organization ( IMO)…………………………...……1974

4.

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6. International Monetary Fund ( IMF)………………………………………….19717. International Telecommunication Union……………………………………...19728. FAO……………………………………………………………………...………19719. Universal Postal Union………………………………………...……………….197110. WHO…………………………………………………...………………………197411. World Meteorological Organization………………………………...……….197512. WTO(observer status)…………………………………………...……………199513. International Association of Lighthouse Authorities………………………..198714. International Civil Defence Organization (ICDO)……………………...…..198515. International Hydrographic Organization…………………………...……...198716. INTELSAT (International Satellite Organization)………………………….197517. ISO (International Standardization Organization)……………………...….1989Other Regional Organizations:-1. Afro-Asian Insurance Union………………………………………...…………19812. Afro-Asian Organization for Rural Development……………………...…….19793. Arab Gulf Organization for Support of Development Activities for the United Nations (AGFUND)………………………………….---4. Regional Organization for Protection of the Maritime Environment…...….1979

5.

Source: Ministry of Foreign Affairs ( List of Diplomatic Relations between Sultanate and the Countries

of the World 1995 -96).

3.5.5. Political Relations. Oman has maintained political relations with national and international

organizations. The details of the organizations with whom the political

relations are maintained by Oman are given in table No:( 3.14 ). Table No:( 3.14 )

Political Relations YearName of OrganizationSr:No

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Arab Organization:-1. League of Arab States..........................................................................................19712. Arab Administrative Development Organization.............................................19753. Arab Justice Ministers Council..........................................................................1982

1.

International Organization:-1. United Nations Organization (UN)…………………………………...………..19722. UNESCO……………………………………………………………………...…19723. UNIDO……………………………………………………………………...…...19854. Inter-Government Bureau for Informatics…………………………… ……19865. INTERPOL……………………………………………………………………...19726. International Institute of Administrative Science…………………………….19857. International Organization for Legal Mectonology…………………………..19898. IWC (International Whaling Commission)…………………………...………19809. Non-Aligned Movement………………………………………………………...197310. World Scout Borean…………………………………………………………...1977

2.

Other Regional Organizations:-1. Afro-Asian Legal Consultation Committee………………………...…………1976

3.

Source: Ministry of Foreign Affairs ( List of Diplomatic Relations between Sultanate and the Countries

of the World 1995 -96).

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