Oman and the private sector
Oman is trying to diversify and build a new private sector
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When Oman unveiled a plan this year to build a large petrochemical complex alongside a $6 billion refinery in the southern coastal town of Duqm, officials hailed the project as a step towards diversifying income and creating jobs.
Promoting new industries and expanding downstream oil operations such as petrochemicals have been a cornerstone of the Gulf Arab state’s aim to cut its $73 billion economy’s reliance on crude oil exports and create jobs to combat unemployment, which the IMF puts at over 24 per cent.
The government of Sultan Qaboos bin Said, Oman’s ruler for 42 years, earmarked Duqm as the next industrial growth city with investments of up to $15 billion planned in new petrochemical and infrastructure projects at the port over the next 10 years.
Among other projects, Oman hopes to boost growth and employment with a 1,000 km, $13 billion railway. It is also investing heavily in airport and port operations in the southern city of Salalah near the border with Yemen. It is all part of a plan to give the private sector a bigger role in the economy as oil production, which accounts for 77 per cent of government revenues and half of economic output in non-Opec Oman, looks to be nearing a peak.
Oman has faced sporadic street protests over a lack of work and perceived corruption since early 2011 and faces political uncertainty as Sultan Qaboos, 72, has not revealed his successor, a cause for concern when much of the Arab world is in turmoil. Adding pressure on the economy, and employment, is a drop in natural gas production after a decade-long boom. That has created a shortage of gas supply in the country that Oman quickly needs to correct, with much depending on whether British oil company BP will go ahead with a costly gas project in the country.
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