Business Opportunities in Oman - U S Dept of Commerce

The United States and the Sultanate of Oman share a strong bilateral relationship based on a joint commitment to the security, stability, and prosperity of the region. Oman is a regional actor as a member of the Arab League as well as the Gulf Cooperation Council (GCC), which includes Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, and Bahrain. The government of Oman is a monarchy with a population of approximately 3.8 million (including about 1.8 million foreign workers), ruled by Sultan Qaboos bin Said Al Said since 1970. During his more than forty years as Oman's leader, Sultan Qaboos has transformed a nation of subsistence farmers and fishermen with a total of six kilometers of paved road into a thriving state with modern infrastructure and continuing economic and social investment. Oman is a middle-income country with an economy based primarily on limited overall hydrocarbon resources, notwithstanding a few significant recent gas finds. Oil and gas accounted for about 80% of the government's revenue in 2012. High oil prices in recent years have bolstered Oman's budget, trade surpluses, and foreign reserves. Increased subsidies and expenditures in 2011 and 2012 associated with the "Arab Spring" and job creation initiatives offset income from increased oil revenues, although high oil prices helped Oman maintain a budget surplus. Oman enjoyed 5% GDP growth in 2012, due in large part to an average oil price around $100 per barrel. The financial system is well capitalized with a very low number of non-performing loans. Oman has a stable A1 credit rating as well as very low external debt; at 3-4% of GDP it is one of the lowest in the world. According to the Public Authority for Investment Promotion and Export Development (PAIPED), new FDI in Oman jumped to RO 5bn, about $16 bn, in 2010, from just RO 980m ($2.5 billion) in 2003. Oman acceded to the World Trade Organization in 2000, is a member of the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), and entered into a Free Trade Agreement (FTA) with the United States in 2009. The lack of market competition due to the prevalence of family-owned and parastatal oligarchies has resulted in inflated price levels for its mainly imported food and consumer products. Reliance on a large state-owned energy sector leaves the economy vulnerable to market prices for energy products.