Economic diversification and sustainable development: Evaluating progress in SDGs 7, 8 and 11, 12

Abstract

Economic diversification is a critical strategy for achieving sustainable development, particularly in resource-dependent economies that face vulnerabilities linked to volatile commodity prices and environmental degradation. By broadening the economic base—through investment in sectors such as technology, renewable energy, agriculture, and services—countries can reduce their reliance on singular industries, thereby fostering resilience against market fluctuations. This research investigates the interplay between economic diversification strategies and sustainable development in Oman, focusing on the objectives outlined in Oman Vision 2040. With an emphasis on transitioning from an oil-dependent economy to a diversified economic framework, the study employs a quantitative approach in which data from 402 respondents are analyzed through a structured questionnaire. Key dimensions of economic diversification, including production, trade, and revenue, are examined for their respective impacts on sustainable development outcomes. The findings reveal significant positive correlations between the independent variables and the dependent variable, underscoring that effective diversification in production enhances trade and revenue generation, thereby contributing to greater economic resilience. Notably, the results indicate that diversified trade partnerships and increased nonoil production are critical for mitigating the risks associated with fluctuating oil prices. Furthermore, the analysis emphasizes the importance of a balanced revenue model, highlighting the need to expand government revenue sources beyond oil. This research contributes to the understanding of how strategic economic diversification can facilitate sustainable development in resource-rich contexts. The implications of these findings are pertinent for policymakers aiming to achieve the ambitious targets set forth in Oman Vision 2040. By prioritizing initiatives that enhance economic diversification, Oman can advance toward a more sustainable and resilient economy equipped to navigate future challenges.