Oman’s Shift to a Post-Oil Economy

Abstract

Oman’s economy has grown dramatically since 1970. Until recently, however, Oman’s economic progress has been largely driven by the wealth generated from oil export revenues. Despite historical attempts to diversify the economy away from oil, the state budget has remained dominated by oil export revenues, accounting for 84.3% of total government revenue in 2014 and 68.2% in 2016. Without successful development of alternative sources of income and reduced dependence on oil, Oman’s economy will remain highly vulnerable not only to the fall in oil prices but also to other challenges including increasing domestic demand for energy, as well as the effects of climate change on both oil and non-oil economic sectors. This chapter provides policy recommendations that can help overcoming structural challenges and tapping into the opportunities to achieve the goals of economic diversification and shifting towards a post-oil economy.