Oman country brief

Overview

The Sultanate of Oman is the oldest independent state in the Arab World.  It is bordered by Saudi Arabia on the western side, the United Arab Emirates in the northwest and Yemen in 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.  Oman has a population of 3.8 million (2013 est.) of whom 1.7 million are foreign expatriates working in Oman.  Administratively, Oman is divided into six regions.  Its national day, 18 November, is the birthday of the Sultan, HM Qaboos bin Said Al-Said.  Oman’s capital is Muscat on the northern coast.

Political Overview

Oman is a monarchy. The head of state and government (prime minister) is the hereditary sultan.  The Sultan, HM Sultan Qaboos bin Said Al-Said, acceded to the position in 1970.  He also performs the roles of Defence, Foreign Affairs and Finance Minister, and is Chair of the Central Bank and Commander of the Armed Forces.  In international relations, the Sultan is assisted by HE Mr Yusef bin Alawi bin Abdullah who has been Minister Responsible for Foreign Affairs since 1997. 

In 1996, Sultan Qaboos issued a royal decree to establish a bicameral legislature with advisory powers, the Council of Oman.  It comprises an 83 member upper chamber, the Majilis al Dawla (State Council) appointed by the Sultan, and an 84-member lower chamber, the Majilis al Shura (Consultative Council) elected by popular vote to serve a four year term, most recently elected in October 2011.  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.  Legislation was amended in February 2010 to allow the formation of labor unions. 

As with other Gulf countries, Oman has a large youth population (just over 50 per cent are under the age of 24). Popular protests occurred in Oman in 2011 calling for political and economic reform, jobs and access to education, leading to some reforms.  In 2011, 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, Organisation of Islamic Cooperation, Gulf Cooperation Council (GCC) and the Indian Ocean Rim Association  (IORA).

Bilateral Relations

Australia established diplomatic relations with Oman in 1981.  The Australian Embassy in Riyadh, Kingdom of Saudi Arabia, is accredited to Oman.  Australia appointed an Honorary Consul in Muscat in December 2011.  Austrade services in Oman are provided through the Australian Embassy in Riyadh. Oman’s Ambassador in Tokyo is accredited to Australia.  Oman opened a Consulate-General in Melbourne in June 2005. 

Our bilateral relations with Oman are friendly and cooperative. As co-founders of the Indian Ocean Rim Association (IORA), Australia and Oman work closely together to advance cooperation on a range of Indian Ocean rim regional issues, including fisheries and maritime security and safety.

Education links are growing, with about 800 Omani students at Australian institutions in 2014. There are eight formal agreements between Australian and Omani universities to facilitate student and academic exchange, and research collaboration. People-to-people links are further enhanced by an association of alumni of Australian universities which is active in Oman, and the Oman students’ association in Melbourne. Some three thousand Omani visitors arrived in Australia in 2013-14. Oman participated in the AFC Asian Football Cup 2015 held in Australia.

Economic Overview

Oman is a middle-income economy (GDP around US$77.1 billion in 2013).  Faced with the prospect of dwindling oil supplies, the Omani Government has pursued an accelerated economic reform agenda 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 the skills and employment of Omanis. The Omani Government is also seeking to attract more foreign business and investment.

Up to a billion dollars have been committed to the development of new maritime ports and the expansion of existing gateways.  A new international airport in Muscat is scheduled to open in 2016 with the capacity to handle 12 million passengers annually.  A project for a railway over more than 2,000 km to link Oman to Saudi Arabia and the other Gulf countries is also part of its national development plan.  Development of a Special Economic Zone at the port of Duqm is intended to create a major logistics hub for the region.    

In 2014, non-oil sectors, especially services, were the driver of the economy, despite a contraction in industrial activity.  Real GDP grew 3.4 per cent year on year in 2014 (IMF estimate) and is expected to slow in 2015.  Under Oman’s budget for 2015, a deficit of US $6.5 billion is expected but the government will increase spending in order to continue investing in diversification.

With an extensive Indian Ocean coastline, Oman has historically looked outward to the Indian Ocean and South Asia.  Oman aims to become a gateway to international trade between Europe, the Gulf and South Asia.

Trade and Investment

Australia’s two-way merchandise trade with Oman totalled $447 million in 2013-14 and is growing.  Passenger motor vehicles (PMVs) and agricultural commodities were Australia’s principal exports.   Our sheepmeat exports have grown 188% over the last four years, to $29.7 million.  In 2013, imports from Oman to Australia had increased by almost 258 per cent, largely due to imports of fertilisers worth $66 million; this trade has continued with fertiliser imports of $50 million in 2013-14.

Several Australian companies are active in Oman across a range of sectors. Oman is encouraging Australian investment to support its economic reform agenda, aimed at diversification of the economy and the education of its citizens.  It has a particular interest in tapping into Australia’s agribusiness and natural resources-related expertise, including on dairy production. 

There is potential for useful scientific collaboration on agriculture, aquaculture and coastal ecosystems. There are significant prospects for further expansion in Australian education services, including in vocational education and training (VET).    

A priority for the Australian Government is the resumption of free trade agreement negotiations with the Gulf Cooperation Council, including Oman. 

High level visits

April 2015: Visit to Oman by the Speaker and a delegation of Members of the WA Legislative Assembly.

February 2014:  Visit to Oman by the Victorian Minister for Agriculture and Food Security.

October 2013: Bilateral Senior Officials’ Talks held in Perth. 

September 2012: The then-Governor-General  undertook the first visit by an Australian serving Head of State to the Sultanate. 

June 2012: The then-Minister for Foreign Affairs visited Oman, the first visit by an Australian Foreign Minister. 

October 2012: The then-Governor of Victoria visited Oman. 

January 2012: The then-Minister for Defence Science and Personnel visited Oman.

September 2011: The most recent senior Omani visitor to Australia was the Secretary-General of the Ministry of Foreign Affairs, HE Sayyid Badr Al-Busaidi, in 2011 for an ‘Oman Cultural Days’ event held in Sydney.

December 2011: The first bilateral Senior Officials’ consultations took place in Muscat.

Updated April 2015


Last Updated: 18 August 2014