EIGHTH FIVE-YEAR DEVELOPMENT PLAN
The Eighth Five-Year Development Plan (2011-2015) specifically seeks to increase Oman’s Gross Domestic Product (GDP) by an average of 6 per cent annually at current prices and 5 per cent annually at constant prices during the five-year plan period, and also to keep the inflation in check at an average of 4 per cent per annum during the period.
The total projected revenue for the five-year period is estimated at OMR 37.495 billion, leaving a deficit of OMR 5.215 billion. The ratio of the deficit to the total revenue will be around 13.9 per cent. The oil revenues are based on a projected daily crude oil production of 897,000 barrels and an assumed average price of USD 59 per barrel during the plan period.
The plan strives to enhance the economic diversification process through focusing on development of sectors such as tourism, industry, agriculture and fisheries. The plan also accords prime importance to the development of human resources by scaling up the government expenditure on education and health care to 52 and 88 per cent respectively, as compared to the Seventh Plan. The plan places special emphasis on increasing job opportunities for the national work force through increasing the investment volume, developing labour intensive sectors and Small and Medium Enterprises, raising Omanisation rates in various sectors, and providing guidance and counselling services. The plan is expected to provide between 200,000 to 275,000 new jobopportunities during this period.
It is anticipated that billions of Rials will be pumped in for developing various infrastructure projects like roads, airports, seaports and sewerage water networks during the plan period. As much as OMR 2.09 billion have been allocated for the massive expansion of the Muscat and Salalah airport projects, and for building four new regional airports at Sohar, Adam, Ras al Hadd and Al Duqm. Further, it is expected that OMR 1.23 billion will be spent to build various major roads and RO.445 million for developing various seaports.
The budget for 2011 is expected to infuse new vigour into the core sectors of the economy, and promote the welfare of the citizens through increased allocations to the health and education sectors that is necessary for the development of the nation.
The budget estimates a 14 per cent increase in the total revenues at OMR 7.280 billion as compared to OMR 6.380 billion in the last budget. Oil and gas revenues, which account for about 81 per cent of the total revenues, are estimated based on average oil price of USD 58 per barrel.
The budgeted total expenditure of OMR 8.13 billion represents a substantial increase of 13 per cent when compared to OMR 7.18 billion for 2010. The education and health sectors allocations amount to OMR 1.26 billion, representing a growth of OMR 94 million from the 2010 allocation. The budget deficit is expected to remain well within the limits at OMR 850 million that represents 12 percent of the budget revenues and 4 per cent of the GDP. The budget aims to move forward the national development process with the active participation of all its citizens who are looking forward to the Sultanate becoming a beacon of progress in the region.
(This write-up is contributed by the Oman member firm of PKF International Ltd.)