Oman breaks into a sprint

An ambitious plan is being implemented in Oman to modernise without marring the country's natural beauty.

The corniche in the Mutrah district of Muscat. The sultanate's ports will benefit from US$15bn invested, in part to diversify the economy away from oil and gas exports.
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Development in the GCC country has for years proceeded more slowly than in its neighbours, but an ambitious plan is being implemented to modernise without marring the country's natural beauty. Ivan Gale reports Oman is pressing ahead with a multibillion-dollar modernisation of its aviation, tourism and industrial sectors while striving to maintain the country's natural beauty. The investments include more than US$2.5 billion (Dh9.18bn) of aircraft orders by Oman Air, several billion dollars worth of new airports across the country and in the capital, and more than $15bn of public and private investment at a new port and industrial zone.

The modernisation is intended to end the slow growth that has prevailed in Oman for decades while many of its Gulf neighbours have raced ahead. "Oman has been a sleeping giant for many, many years," says Peter Hill, the chief executive of Oman Air. "Here was a country with almost 1,000km of ... coastline, with mountains and the Empty Quarter, and most of it was virtually unknown to the outside world."

Mr Hill first came to the country in 1974 and says that at the time Oman was a difficult place to visit. "They were just coming out of a period where they were governed by a Sultan who didn't really appreciate too many visitors coming in. And so it was the birth of a new nation when his majesty, the current Sultan, took over. And so then you started to see the country's potential," he says. "Over the last five to 10 years, Oman has changed its attitude to tourism."

Oman Air, which hired Mr Hill as chief executive in 2008, is playing a central role in a development strategy based not only on tourism but also on industrial activity. The plan will see the Omani hinterland play a larger role in the national economy. It will also diversify revenues away from upstream oil and gas production, which is lucrative but not labour intensive, into tourism as well as downstream industries such as petrochemicals and steel manufacturing, which hold great potential to create jobs for Omanis.

The government's airport operator, Oman Airports Management, plans to award a dozen contracts this year and next year to upgrade facilities in the capital city Muscat and Salalah, and build four airports along the coast and in the country's heartland. An airport capable of handling 500,000 passengers annually will be built at Ras al Hadd, helping to improve the tourism infrastructure and support the area's main draw, a turtle sanctuary.

The coastal towns of Duqm and Sohar will each get an airport with a 500,000 annual passenger capacity. These will support the country's industrial plans including metals and petrochemical plants, ports and dry docks, and logistics. In Sohar alone, public and private sector funds totalling $15bn have been poured into the port and adjacent free zone, officials from the Port of Sohar say. The fourth new airport will be at Adam, in the interior, which will be smaller than the others and cater initially for executive jet flights.

Rob O'Hanlon, the regional tourism, hospitality and leisure industry group leader for the consultancy Deloitte, says Oman's next push could be in hotels. "The [Ras al Hadd] region would benefit from expansion of quality accommodation facilities, which are limited at the moment and [for] which there is enormous potential for growth," he says. One of the newest arrivals in Oman's hotel sector will be a Club Med in Salalah on the country's southern coast, after an agreement was signed in January with Oman-based Muriya Tourism Development.

Oman attracts a reported 2 million tourists a year, 40 per cent from Europe, its strongest market. A third arrive from the GCC and about 13 per cent from Asia. Twenty-one new aircraft, which were ordered in 2007, will be used in developing the tourism sector. New long-haul aircraft capable of reaching Europe and Asia will bring in more tourists and businessmen, Mr Hill says, while shorter-range aircraft will tap into regional destinations such as Beirut and Amman as well as ferry tourists from Muscat to destinations such as Ras al Hadd and Salalah.

But while the government is modernising the economy, it does not want to lose sight of what makes Oman special - its relaxed atmosphere and natural beauty, Mr Hill says. "They want to do all this without spoiling what Oman is today," he says. "There is no inferiority complex to their neighbours. In fact, they are very proud to be different." * additional reporting by Rebecca Bundhun