Oman’s gross domestic product is expected to be about 63.37 billion dollars in 2020.
What is the state of Oman’s economy?
Oman’s economy is ranked 108th in the 2022 Index for economic freedom, with a score of 56.6. Oman is ranked 8th out of 14 Middle Eastern and North African countries, and its overall score is lower than the regional and global norms.
Why is Oman so impoverished?
Despite Oman’s massive oil reserves, large portions of the people remain impoverished. Unemployment, underpayment, and a lack of economic diversification are the main causes of poverty in Oman.
The sultanate has recently drawn notice for achieving a number of Millennium Development Goals. Oman reduced extreme poverty and child mortality by more than half between 1990 and 2015, achieved universal primary school enrollment, and increased gender equality in education.
Despite this, thousands of foreign workers remain impoverished, and 40% of Oman’s people are unemployed.
Companies in Oman are not compelled to pay migrant workers minimum wage due to lenient labor rules. This disparity, combined with the fact that foreigners are not eligible for the Omani government’s 100-rial ($263) monthly allowance, has forced many migrants into slums. As a result, Oman’s 100,000 laborers are treated as second-class citizens.
Many Omani residents are unable to obtain job because foreign laborers can work for less than the minimum pay. Despite recent progress in primary school attendance, many Omanis lack the higher-education skills required to compete with low-cost migrant labor. As a result of these factors, about 40% of Omani citizens are unemployed.
Oman’s economy has always been unaffected by its high unemployment rate since oil earnings have allowed the government to give allowances to its residents. Global oil prices, on the other hand, have dropped by 50% since 2014. With oil accounting for 46 percent of Oman’s GDP and 84 percent of government revenue, the government has been obliged to tighten its belt and begin taxing citizens rather than granting allowances.
The reasons of poverty in Oman may deepen, and progress toward the Millennium Development Goals may be reversed, unless the oil market turns around and Oman takes significant measures to diversify its economy. If no changes are made at the national level, poverty in Oman would only worsen.
What is Dubai’s Gross Domestic Product (GDP)?
Dubai’s economy has a gross domestic output of US$102.67 billion as of 2018. The construction boom was curtailed by the Great Recession.
It’s been described as “centrally-planned free-market capitalism” by the International Herald Tribune. Oil production, which once contributed for half of Dubai’s gross domestic product, now accounts for less than 1%. Wholesale and retail commerce accounted for 26% of total GDP in 2018, while transportation and logistics accounted for 12%, banking, insurance activities, and capital markets accounted for 10%, manufacturing accounted for 9%, real estate 7%, construction 6%, and tourism 5%.
For Western manufacturers, Dubai has become an important port of call. The port region was home to the majority of the new city’s banking and financial centers. Throughout the 1970s and 1980s, Dubai remained a vital trading route. Dubai has unrestricted gold commerce and was the center of a “brisk smuggling trade” of gold ingots to India, where gold imports were prohibited, until the 1990s.
Dubai’s economy is now centered on tourism, with hotels being built and real estate being developed. Port Jebel Ali, built in the 1970s, boasts the world’s largest man-made harbor, but it’s also becoming a centre for service industries like IT and banking, thanks to the new Dubai International Financial Centre (DIFC). Emirates Airline, situated at Dubai International Airport, was formed by the government in 1985 and is still state-owned; in 2015, it carried over 49.7 million passengers.
Dubai is the #1 business gateway for the Middle East and Africa, according to Healy Consultants. In order to develop Dubai property, the government has established industry-specific free zones throughout the city. Dubai Internet City, which is now part of TECOM (Dubai Technology, Electronic Commerce and Media Free Zone Authority), is one of these enclaves, with members including EMC Corporation, Oracle Corporation, Microsoft, Sage Software, and IBM, as well as media companies like MBC, CNN, Reuters, and the Associated Press. Dubai Knowledge Village (KV), an education and training hub, has been established to support the Free Zone’s other two clusters, Dubai Internet City and Dubai Media City, by offering facilities to train the clusters’ future knowledge workers. Companies engaged in outsourcing activities can set up offices in the Dubai Outsourcing Zone, which offers concessions from the Dubai government. In most parts of Dubai, internet access is restricted, with a proxy server screening out sites that are believed to be against the UAE’s cultural and religious values.
In Oman, what is the minimum wage?
Oman has a government-mandated minimum wage, and no worker in the country can be paid less than this amount. Employers in Oman who do not pay the Minimum Wage may face penalties from the government.
What is the Oman Minimum Wage?
The Minimum Wage in Oman is the lowest amount that a worker can legally be paid for his or her work. Most countries have a national minimum wage that must be paid to all workers.
The minimum wage in Oman is 225 Omani rials per month ($592) plus a 100 rials per month ($263) allowance for residents; there is no allowance for foreign workers.
The minimum wage in Oman was last adjusted on July 1, 2013.
How does Oman’s minimum wage compare to the minimum wage in other countries?
In international currency, Oman’s annual minimum wage is $7,000.00. International Currency is a currency measurement based on the US dollar’s value in 2009. There are 28 nations with a higher minimum pay than Oman, and the country ranks in the top 14% of all countries in terms of annual minimum wage rates.
Are Omanis wealthy?
Oman is a high-income country that relies on diminishing oil resources for 84 percent of its revenue. The country, which has been struck hard by the global decline in oil prices, is attempting to diversify its economy through tourism and gas-based industries.
How is Oman’s financial situation?
“The market reaction reflects a recognition that meaningful reform, particularly as it relates to taxation in an area with scant precedent, would face challenges, but has not been materially derailed,” said Sharif Eid, a portfolio manager at Franklin Templeton Investments.
“Short-term, measured modifications are to be expected,” he added, noting that they may have an impact on social dynamics.
At the end of last week, Oman’s government bonds due in 2047 yielded 6.9%, just slightly more than the 6.7 percent before the protests. The yield touched nearly 12% in March of last year, when the coronavirus outbreak caused crude prices to plummet.
Oman’s austerity measures, which were announced last year, are considered as critical for the cash-strapped country’s ability to access foreign debt markets ahead of $11 billion in debt redemptions this year and next.
Oman is one of the poorest countries in the oil-rich area monetarily, making it more exposed to price changes in hydrocarbons, which accounted for nearly a third of its GDP in 2019.
Since the 2014 oil price fall, Oman’s debt-to-GDP ratio has risen from under 15% in 2015 to over 80% last year, despite promises to diversify revenue away from oil and cut expenditure on its bloated public sector.
Requests for comment from Oman’s finance ministry and central bank on the country’s ability to support its economy in the face of financial restraints were not returned.
Investors have been encouraged by Oman’s medium-term fiscal plan, which included the implementation of a value-added tax (VAT) in April. This has helped Oman finance billions of dollars in bonds and loans this year.
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“Oman has disclosed comfortable levels of information to the market since late last year, which has supported the market, and oil prices at $70 per barrel have greatly decreased their funding gap,” said Zeina Rizk, executive director, fixed-income asset management, at Arqaam Capital.
“Oman also increased the majority of its budget funding demands this year, which is very encouraging,” she added.
Oman wants to cut its budget deficit from more than 4 billion rials ($10.4 billion) in 2020, or 15.8% of GDP, to 537 million rials in 2024, or 1.7 percent of GDP.
The debt-to-GDP ratio is forecast to remain around 80% by 2024, but without the medium-term fiscal plan, it would have risen to 128 percent, according to the ministry of finance.
In the next years, Oman wants to raise non-oil revenue to 35 percent of total revenue, up from 28 percent last year.
The budget plan does give for some time to implement more delicate measures, such as a personal income tax on high earnings, which Oman has announced it is exploring for 2022, a first for the Gulf region.
Despite the fact that the disturbance that erupted last week appears to have subsided following a forceful security response, it is an indication that Oman’s efforts to reduce state deficits and debts may be slowed to accommodate employment demands.
According to World Bank figures, Oman’s unemployment rate reached a new high of 5% last year, with young unemployment exceeding 10%.
“The road to budgetary consolidation was never going to be easy, and the authorities’ concessions would impede the rate of adjustment,” said Scott Livermore, Middle East head economist at Oxford Economics.
The International Labour Organization’s lead employment policy specialist for Arab governments, Tariq Haq, said Oman needed to adopt a medium- to long-term employment policy.
“Providing government jobs as an emergency solution is not a long-term alternative for a more comprehensive labor market reform, which must be accompanied by structural reform of the Omani economy as a whole,” he said.
Oman slashed civilian and military spending in 2020 and has projected for more reductions this year, in addition to adopting VAT and gradually hiking water and power bills.
Investors and credit rating agencies, on the other hand, have generally factored in the expectation that such ambitious reforms would have to be weighed against socio-economic constraints.
Fitch downgraded Oman’s outlook last month, citing “risks to sustained enactment of fiscal consolidation plans given the tough economic and societal climate.” Oman is rated sub-investment grade by all major agencies.
Oman may use government expenditures to mitigate some of the social consequences of its efforts to diversify revenue, but the reform path will remain same, according to Livermore.
“The Omani authorities have no choice but to remain committed to medium-term fiscal adjustment, albeit the manner in which this is accomplished may require some fine-tuning.”
Nonetheless, some investors believe that Oman’s response to any revival of civil upheaval or other economic issues should be constantly observed.
“Investors reacted positively to Oman’s medium-term consolidation plan since it provided some short-term fiscal relief,” said Sergey Dergachev, a fund manager at Union Investment.
“However, Oman confronts other dangers, such as a problematic tourism sector outlook and inflationary pressures, all of which must be monitored in tandem with the employment situation,” he said.
What is Oman’s claim to fame?
Oman is known for its ancient aflaj deserts irrigation system, terraced orchards (Jebel Akhdar), adobe fortresses, numerous mosques, wadis (stream valleys), dhows (traditional Arabian sailing ships), meteorites, and the Sultan’s yacht, Al Said, which is the world’s third-largest yacht.
What makes Qatar so wealthy?
The once-sleeping peninsula off Saudi Arabia’s eastern coast has transformed into an important oil-exporting international hub in the last two decades, with only a little fishing economy and nearly no schools. Qatar began substantial natural gas shipments to Japan and Spain in 1997, then expanded to additional nations in the early 2000s. After fifteen years and 14 natural gas plants, the country’s GDP has risen from $30 billion to more than $200 billion. Qatar, behind Russia and Iran, has the world’s largest natural gas reserves, with about 900 trillion cubic feet, accounting for 60 percent of the country’s total GDP.
It began producing 46,500 barrels per day in 1951, after discovering oil in 1939 and natural gas 30 years later. Although some of the revenue was used to begin modernizing the country, the Royal Family amassed a large portion of it, with portions going to the kingdom’s sovereign country, Great Britain. Khalifa bin Hamad deposed his father after the country gained independence in 1971 and increased spending on social programs, housing, health, education, and pensions while lowering the Royal Family’s benefits. Investments in foreign businesses, banks, and even the Paris Saint-Germain soccer team and London real estate provide big returns for the country.