Oman flag

Oman country brief

General information

The Sultanate of Oman is the oldest independent state in the Arab World.  It is bordered by Saudi Arabia on the west, the United Arab Emirates on the northwest and Yemen on the southwest.  The Arabian Sea lies to its southeast, and the Gulf of Oman to the northeast.  Although partially under Portuguese occupation during the 16th to mid 17th century, Oman had its own empire in East Africa from the early 18th to the mid 19th century.  Until 1970, Oman had relatively limited contact with other areas of the world, including neighboring Arab States.  Oman has a population of 3.5 million (2010 est.), including nearly 600,000 (2009 est.) non-Omani nationals.  Administratively, Oman is divided into six regions.  Its national day, 18 November, is the birthday of the present Sultan, HM Qaboos bin Said Al-Said.  Oman’s capital is Muscat.

Political Overview

Oman is a monarchy.  The head of state and government (prime minister) is the hereditary sultan.  The current Sultan, HM Sultan Qaboos bin Said Al-Said, assumed the position in 1970.  He also performs the roles of Defence, Foreign Affairs and Finance Minister, and is Chair of the Central Bank.  Oman has expanded its diplomatic relations dramatically under the current Sultan and maintains good relations with all its neighbours.

In 1996, Sultan Qaboos issued a royal decree to establish a bicameral legislature with advisory powers, the Council of Oman.  It comprises a 71 member upper chamber Majilis al Dawla (State Council) appointed by the Sultan and an 84-member lower chamber Majilis al Shura (Consultative Council) elected by popular vote to serve a four year term.  Sultan Qaboos granted increased legislative powers to the Consultative Council in 2011.  Universal suffrage for those over 21 in Oman was instituted on 4 October 2003.  Oman amended the law in February 2010 to allow the formation of labor unions.  Strikes are prohibited.

As with other Gulf countries Oman has a large youth population (43% are under the age of 15 and 60% under 30).  Sultan Qaboos quickly responded to popular protests in Oman in 2011 calling for political and economic reform, jobs and access to education.  Oman’s wave of protests was moderate.  He dismissed a third of the governing cabinet and created a second public university.  In the wake of these civil disturbances, the other GCC states pledged $US10 billion to Oman over ten years for projects to support economic growth and create employment opportunities.

Oman is a member of United Nations, World Trade Organization, Arab League, Organization of Islamic Cooperation, Gulf Cooperation Council and the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC).

Economic Overview

Oman is a middle-income economy (GDP per capita estimated at U$25,152 in 2012), with the smallest GDP of the Gulf States (U$80 billion in 2012) and oil reserves that are expected to run out within 20 years.  Faced with the prospect of dwindling oil supplies, the Omani Government is pursuing an accelerated economic reform agenda (Vision 2020), built on three pillars: (i) diversification of the economy away from oil, reducing the oil sector’s contribution to GDP to 9 per cent by 2020; (ii) privatisation; and (iii) boosting skills and employment of Omanis.  The Omani Government is also seeking to attract more foreign business and investment, including by implementing a strong rule of law to support and enforce business contracts and through its financial and fiscal policies.  Oman registered 4.5 per cent growth in GDP throughout the peak of the global financial crisis, according to the Government, with an estimated five per cent growth in 2012.

Up to a billion dollars has been committed to the development of new maritime ports and the expansion of existing gateways.  A new airport in Muscat, Oman’s capital, is scheduled to open in 2013.  It will have annual capacity for 500,000 passengers and an initial 50,000 tonnes in freight.  A railway project to link Oman to Saudi Arabia and other Gulf countries is also on the agenda.  Tourism and gas-based industries are also key components of the diversification strategy.  Prospecting for new oil fields is a priority.

With an extensive Indian Ocean coastline, Oman has historically looked outward to the Indian Ocean and South Asia.  Oman’s relations with India are close.  Oman’s 350,000-strong Indian community has made a significant contribution to the Sultanate’s development.  Oman is aiming to become a gateway to international trade between Europe, the Gulf and South Asia.

Bilateral Relationship

Australia established diplomatic relations with Oman in 1981.  In December 2011, Australia appointed an Honorary Consul in Muscat.  Our bilateral relations with Oman are friendly and cooperative, based on common interests and recognition of the potential for growth in the relationship.  There has been a noticeable increase in engagement and visits over the last two years.  The Governor-General, Ms Quentin Bryce AC CVO, undertook the first ever visit by an Australian serving Head of State to the Sultanate between 4 and 6 September 2012.  The then Minister for Foreign Affairs, Senator Carr, visited Oman in June 2012, the first ever visit by an Australian Foreign Minister.  The Governor of Victoria, The Honourable Alex Chernov AC QC, visited Oman between 6 and 8 October 2012.  Australia’s then Minister for Defence Science and Personnel, Warren Snowden, visited Oman in January 2012.

The most recent senior Omani visitor to Australia was the Secretary-General of the Ministry of Foreign Affairs, HE Sayyid Badr Al-Busaidi in September 2011 for an ‘Oman Cultural Days’ event held in Sydney.  The first bilateral Senior Officials consultations took place in Muscat in December 2011.

Australia and Oman, as co-founders of the Indian Ocean Rim Association for Regional Cooperation, work closely together to advance cooperation on a range of Indian Ocean rim regional issues, including fisheries.

Oman’s Ambassador in Tokyo is accredited to Australia.  Oman opened a Consulate-General in Melbourne in June 2005, mainly to support Omani Government scholarship students in Australia.  The Omani community in Australia is small, comprising mostly students.  There were 713 Omani enrolments in 2012, the latest available figures.  The number of Omani visitors to Australia is relatively small in comparison to other Middle Eastern countries.

The Australian Embassy in Riyadh, Kingdom of Saudi Arabia, has responsibility for Oman.  Austrade services in Oman are provided through the Australian Embassy in Riyadh.

Commercial Relations

Australia’s two-way merchandise trade with Oman in 2012 totalled $480 million.  Passenger motor vehicles (PMVs) and agricultural commodities were among Australia’s principal exports.  PMV’s exports to Oman were $110 million in 2012, making Oman our fourth largest PMV market in the Gulf, the lead global destination for Australian PMVs.  Australia’s major import from Oman was fertilisers worth $14 million in 2012.

Oman is encouraging Australian investment in Oman to support its economic development.  It has a particular interest in tapping into Australia’s agribusiness and natural resources-related expertise.  There are significant prospects for further expansion in Australian education services, including in vocational education and training (VET).  Several Australian companies are active in Oman across a range of sectors.

Updated September 2013