Economies across the globe are undergoing profound shifts, setbacks and uncertainties. These changes stem from local factors — such as the scarcity of resources and their distribution — as well as external influences from major powers and global political turbulence.
Even advanced economies are not immune. In the United Kingdom, for example, official data from the Department for Work and Pensions (DWP) show that before housing costs, 17 per cent of the population lived on relatively low incomes in 2023/24. That figure rises to 21 per cent — around 14 million people — after housing costs, according to the House of Commons Library report published in April. Added to this is the flight of wealthy individuals from Britain to countries offering more attractive incentives for growth and investment.
Despite the presence of world-class institutions such as Oxford, Cambridge and the London School of Economics, the complexity of managing economies remains daunting. Economics, after all, is a dynamic system where consumers, companies and governments interact to produce and distribute goods and services in response to societal needs.
Oman is no exception to these global currents, particularly as its economy continues to rely heavily on oil and gas revenues. The Ministry of Finance’s second-quarter report for 2025 highlights a six per cent decline in state revenues, falling to RO 5.839 billion compared to RO 6.197 billion during the same period in 2024. This drop is largely attributed to reduced oil revenues.
The government has worked hard to balance public debt — currently standing at RO 14.1 billion — while financing development projects, social protection schemes and revised pension systems. These measures have benefitted groups such as the elderly and children. Yet the central challenge persists: can these initiatives generate enough sustainable employment to absorb the steady stream of graduates from Omani universities and training institutions? The short answer is no.
Some policies have resembled trial-and-error experiments. Investment permits that were opened too widely now require review. The minimum wage of RO 350 for Omanis in the private sector, while well-intentioned, has at times been exploited by employers. The introduction of “golden visas” to attract serious investors is a promising step, provided it is implemented rigourously and complemented with fair opportunities for Omani entrepreneurs.
This is not to dismiss the achievements of the current economic team. Since 2020, it has tightened oversight of public spending, restructured state-owned companies and made notable progress in diversification efforts. The current model has supported Oman’s renaissance by expanding services nationwide, providing jobs, education, healthcare and housing; and ensuring social justice. These successes are reflected in international indicators where Oman has achieved commendable rankings.
Yet sustaining progress requires a new philosophy — one that changes the “rules of the game”. Oman must shift from an oil-dependent system, where revenues are largely directed towards salaries and subsidies, to a diversified economy able to withstand shocks and seize future opportunities. This means investing in job-generating sectors such as industry, tourism, agriculture, healthcare and services, while also embracing knowledge-based economies, education, technology and renewable energy. The aim should be to integrate production, innovation and sustainability into a single framework tailored to Oman’s youthful and educated society.
This does not imply a sudden paradigm shift alone, but a genuine transformation — a “game changer” — to free the economy from oil dependency, achieve real sustainability and convert challenges into strategic opportunities. While Oman Vision 2040 serves as a road map, a practical and adaptable economic model remains an urgent necessity.
Building such a model requires transparent national dialogue on sensitive issues such as demographics, identity and Omanisation. For instance, can Oman truly build a resilient economy without expanding its market size and increasing its population? Some view the small domestic market as a constraint, while others fear the social consequences of demographic shifts.
Ultimately, success depends on bold leadership and innovative economic minds capable of crafting policies rooted in both knowledge and practical experience. Encouragingly, Oman has no shortage of young talent, as seen in entrepreneurial successes across Nizwa, Dhofar, Musandam and Al Batinah North. With such a dynamic and educated population, the foundations are in place for Oman to move confidently from a resource-reliant economy to a productive, knowledge-driven and sustainable one — an Oman ready for the challenges and opportunities of the twenty-first century.
Translated by Badr al Dhafari
The original version of this article was published in Oman Arabic newspaper
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