Oman: State and Prospects of the Economy and International Economic Relations

Abstract

The Sultanate of Oman is an Arab state which economic growth over the past few decades has been largely based on the exploitation of the country’s oil and gas resources. Therefore, special focus is placed on the study of the socio-economic and financial impacts of the fall in global oil prices in the second half of the 2010s as well as their decline in 2020 due to the coronavirus (COVID-19) pandemic for the Sultanate. The author pays particular attention to the measures taken by the Omani government to address the serious economic issues. The article analyzes the steps to minimize the impact of COVID-19 on the Omani economy and incomes of local population, as well as to stimulate industries not related to the production and exports of hydrocarbons. The author places particular emphasis on studying the reforms carried in the Sultanate, in particular, aimed at strengthening the financial system and improving the country’s investment climate. The deterioration of the macroeconomic and financial situation during the pandemic made it particularly clear that the efforts to diversify the Omani economy and carry out structural reforms to reduce the Sultanate’s heavy dependence on oil should be continued. The Vision Oman 2040 program approved in 2020 is aimed at solving this critical task. The article discusses the main ways and methods to achieve this goal, set out in this document. Besides, the author, dwelling in the final part of analysis on the state and prospects of trade and economic relations between the Russian Federation and Oman, notes that improvement of the investment climate, revision of some provisions of the legislative and regulatory framework of the Sultanate’s foreign economic ties could expand Russian-Omani trade and investment cooperation, which corresponds to the economic interests of the both countries.