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For over two decades Oman’s industrial sector has been a key plank in the government’s economic diversification strategy, and the country’s non-petroleum sectors continued to see robust growth in 2014. Electricity and water supply grew by 8.6% to reach $973.5m, mining and quarrying expanded by 8.5% to $322.3m, and building and construction was up 8.3% to $5.4bn. Recent efforts to boost the manufacturing sector have included the creation of an in-country value scheme, specifically addressed towards the oil and gas industry, which aims to develop local content in servicing the energy sector. Meanwhile, Oman’s international reputation for stable growth is increasingly serving to draw in local, regional and international developers and brands. In 2014 the retail and wholesale segments of the service sector made up 6.6% of the country’s GDP. This chapter contains an interview with Gert Hoefman, CEO, Oman Cables Industry.

Oman’s real estate sector has continued to grow in recent years, and despite the fall in oil prices, demand, particularly from the private sector, has helped fan development. Projects that target niches, such as high-end offices, units in integrated tourism complexes, shopping malls and gated communities are flourishing. The residential leasing market saw five consecutive quarters of stability to the second quarter of 2015, as steadily rising demand matched new projects coming onto the market and the economy expanded at a steady pace. Meanwhile, Muscat’s retail mall market remains buoyant, and as of autumn 2015 all malls were at 100% capacity. This chapter contains an interview with Sheikh Salim bin Ahemd Al Ghazali, Chairman, Golden Group of Companies.

Oman’s construction sector was worth an estimated $5.2bn in 2014, up from $4.9bn in 2013, and forecasts show that it will continue to grow rapidly, to $5.6bn in 2015 and $6.0bn in 2016. Although the drop in oil prices will likely curtail public spending in the sector if prices remain depressed, this has certainly not been the case so far. Indeed, the total value of projects planned and under construction in a range of sectors, including energy, manufacturing, transport and utilities, currently stands at $163.5bn – equivalent to twice Oman’s annual GDP. Meanwhile, demand from the private real estate sector is also driving growth, with developers engaged in projects ranging from grade-A office buildings to shopping malls and integrated tourism complexes. Moving forward, tighter resources will likely bring the benefits of PPPs into sharper focus, helping fuel wider private participation in the sector. This chapter contains an interview with Abdullah bin Nasser bin Abdullah Al Bakri, Minister of Manpower; and Fawzi Al Harrassy, Executive Director, Teejan Group.

With Oman’s economic development plan focused on further industrial expansion, and with the sultanate’s population growing, Oman’s utilities sector is looking to keep pace with growing demand. Market reforms stretching back almost two decades have ensured the power sector is well positioned to deal with this higher demand, ramping up production in line with growth. Current priorities for the sector include completing an ambitious waste management investment program, encouraging the growth of renewable energy and further honing the regulatory environment. Indeed, a number of significant regulatory changes are set to come into effect over the next two years, foremost of which is the introduction of cost-reflective tariffs for large-scale, non-residential consumers, due to enter into force in January 2016. This chapter contains an interview with Qais Saud Al Zakwani, Executive Director, Authority for Electricity Regulation.

Hydrocarbons play a vital role in the Omani economy, comprising almost 50% of GDP and accounting for a large majority of government revenues. In total the government budgeted $3.9bn of spending on investment in oil and gas for 2015, representing an increase of 9.35% on the $3.6bn budgeted for 2014. Although the drop in oil prices has put considerable pressure on government revenues, the price drop has also forced producers to optimize processes. Indeed, Oman has become a testing ground for some of the most advanced extraction techniques currently in use, not to mention a host for new investment in downstream industries. The same commitment to technology should soon see production of natural gas hit new records. This chapter contains an interview with Raoul Restucci, Managing Director, Petroleum Development Oman.

Regulatory changes primarily aimed at encouraging consolidation within the insurance sector have recently been introduced by the Omani authorities. Low penetration levels indicate significant room for growth in the sector, with the life segment widely regarded as the most promising area for expansion. Motor coverage still remains the largest insurance line in the sultanate by premium value, taking a 40% market share in 2014, and while the segment continues to see strong growth, competition has driven down premium levels. Elsewhere, the takaful (Islamic insurance) segment continues to expand since its launch in 2014, with some industry players hopeful that the segment could reach as much as 20% of the insurance market in the medium term, which would be roughly in line with other GCC markets. This chapter contains a viewpoint from Sheikh Abdullah bin Al Salmi, Executive President, Capital Market Authority.