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This article also features in Oman’s 50th Renaissance Day: Looking back on 5 decades of economic and social development in the Sultanate. Read more about this report and view purchase options in our online store.

Oman's 50th Renaissance Day: Looking back on 5 decades of economic and social development in the Sultanate

Oman | Economy

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On July 23, 2020 Oman celebrates its 50th Renaissance Day. Exactly half a century ago, His Majesty Sultan Qaboos bin Said Al Said acceded to the throne and established the Sultanate of Oman. On the death of Sultan Qaboos in January 2020 Sultan Haitham bin Tariq Al Said acceded the throne, and he has been responsible for successfully navigating the country through the early challenges associated with the Covid-19 pandemic in the first half of 2020. 

The strides that the country made under the leadership of Sultan Qaboos since 1970 were transformative. Significant investments across the economy took Oman from  an underdeveloped, isolated country with poor basic facilities and infrastructure into a thriving economy with much improved living standards for all citizens. 

In the first few years of his reign, the country joined global organisations and witnessed  the first of many large-scale infrastructure projects that  helped facilitate connections and trade between previously more disparate regions.

As the population expanded from 723,000 inhabitants to nearly 5m today, income more than kept up as GDP per capita increased 46-fold. The life expectancy was raised by 27 years and the infant mortality rate declined from 216 to 11 per 1,000 live births.

These major improvements in health outcomes were possible thanks to a significant investment in basic healthcare infrastructure, including the development of 67 additional hospitals.

The infrastructure  transformation is one of the most illuminating, and serves as an important foundation for the continued development of the country. When Sultan Qaboos first came to the throne, only 3kms of paved roads existed in the entire Sultanate. Since then, Oman has developed some of the best road networks, not just in the region but worldwide, ranking in the global top 10 for road quality with its more than 60,000kms of well-maintained road infrastructure. Meanwhile three large seaports in Salalah, Sohar and Duqm have driven economic growth and facilitated diversification, while the 10 airports constructed since 1970 serve the growing number of both local and international business and leisure travelers.

In 1970, the country was almost entirely closed to foreigners, whereas today the country welcomes 2.3m international visitors yearly. 

While tourism has been one of the key focus areas in recent years, Oman has also made significant strides in industrial development, including a boom in manufacturing.

In 1970, half of the country’s GDP was derived from oil revenues. Thanks to diversification efforts, that figure has been reduced to 21.8%, even as oil production has almost tripled over the same period.

These figures are testament to the legacy of the late Sultan,  their importance underlined by Sultan Haitham’s  emphasis on  his commitment to continuity.

Nonetheless, a half-century into the Renaissance, Sultan Haitham is facing one of the country’s most challenging moments in the shape of the Covid-19 pandemic. 

The government has responded with stimulus packages aimed at ensuring macro-economic stability, while also providing relief for individuals. Omanis whose salaries have been reduced are entitled to have bank loans restructured with no additional interest or fees. Fuel subsidies are also provided, and electricity and water bills have been frozen until the end of June. 

The authorities also acted quickly to limit the spread of the virus itself. A range of measures were implemented, including travel restrictions on international flights and internal public transportation services, the closure of all schools, universities, malls and non-essential shops, and the suspension of prayers at mosques. Meanwhile, major cities went through a period of complete lockdown.

While the economic impact is set to resonate across many key sectors, particularly energy and tourism, there have also been encouraging signs from the nascent tech sector, which was quickly mobilised in the face of the threat. Meanwhile the Muscat-based Research Council has launched a Covid-19 research programme headed by experts from various research institutes across the country, providing financial support to projects conducting short-term applied research in various clinical and non-clinical fields associated with the pandemic. 

Oman’s ability to coordinate an effective and rapid response to the Covid-19 threat  has been underpinned by 50 years of social and economic progress across all sectors. Looking ahead the sultanate’s economic resilience will continue to be tested as the full, longer-term impacts of the pandemic are revealed, and in particular and in particular the country’s ongoing  vulnerability to oil price shocks pose a concern. However this is likely to provide greater momentum to Oman’s Vision 2040, a diversification plan developed under the leadership of Sultan Haitham and which provides a roadmap for the first 20 years of the next half century of Oman’s Renaissance.

Click here to read The Report: Oman 2020.

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