Oman - Current economic position and prospects

Report No. 2528-OM a . r*&% v Oman FILE LUI'Y Current Economic Position and Prospects October 16, 1979 Europe, Middle East and North Africa Region FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  OMAN CURRENCY EQUIVALENTS (Official Exchange Rate) Prior to August 15, 1971 O.R. 1 U.S. $2.40 U.S.$l = O.R. 0.417 August 15, 1971 to January 1973 O.R. 1 U.S. $2.60 U.S.$l = O.R. 0.385 Since February 1973 O.R. 1 U.S. $2.895 U.S.$1 O.R. 0.346  FOR OFFICIAL USE ONLY OMAN: CURRENT ECONOMIC POSITION AND PROSPECTS TABLE OF CONTENTS Page No. BASIC DATA SUMMARY AND CONCLUSIONS ............................ i-v I. INTRODUCTION ......... .............................. 1 II. SOCIAL DEVELOPMENTS ................................ 2 Population ........ ............................ 2 Manpower and Employment ..... .................. 3 Education ........ ............................. 5 III. RECENT ECONOMIC DEVELOPMENTS ....................... 6 Output .......... .............................. 6 Use of Resources .............................. 8 IV. FINANCIAL DEVELOPMENTS ............................. 10 Public Finance ................................ 10 Monetary Developments ......................... 12 Prices and Wages .............................. 13 Balance of Payments ........................... 14 External Debt ................................. 16 Budget Outlook for 1979 ..... .................. 16 V. DEVELOPMENT PROSPECTS AND ISSUES .... .............. 17 Sectoral Prospects ............................ 18 Constraints and Policy Issues .... ............. 20 Mission's Projections ......................... 22 External Borrowing Requirements .... ........... 23 ANNEX I. MISSION'S PROJECTIONS 24 STATISTICAL ANNEX This report is based on the findings of an economic mission which visited Oman in January 1979. The mission was composed of Messrs. Kadir Tanju Yurukoglu (chief and general economist), Damianos Odeh (manpower specialist) and Ms. Margaret O'Donnell (research assistant). This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   Page 1 of 2 pages OMAN: COUNTRY DATA AREA POPULATION DENSITY 1/ 2/ 2.9 per km.sq.2 300,000 km2 860,000 (1978)- 2.9 per km.sq. Rate of growth: 2.9% (from 1972-78) 3 / POPULATION CHARACTERISTICS (1977) HEALTH (1977) Crude Birth Rate (per 1,000) 47 Population per physician 4,108 Crude Death Rate (per 1,000) 19 Population per hospital bed 589 Life expectancy at birth 48 EDUCATION (1977) INCOME DISTRIBUTION Adult literacy rate (%) 30 % of national income, highest quintile Primary school enrollment (%) 55 lowest quintile , Secondary school enrollment (%) 5 4/ GNP PER CAPITA IN 1978: $2.510 NATIONAL ACCOUNTS Annual average rate of growth (%) (At constant prices) 1978 -5 1974-78 US $ million GNP at Market Prices 2,129.0 100.0 11.1 Gross Domestic Investment 618.1 29.0 35.2 Gross Domestic Saving 903.6 42.4 -2.6 Current Account Balance -31.4 -1.5 Exports of Goods 1,599.0 75.1 2.3 Imports of Goods 1,249.2 58.6 23.3 OUTPUT, EMPLOYMENT AND PRODUCTIVITY IN 1978 Value Added Emoloyment V.A. per worker US $ million _ Thousands _ US $ % Agriculture 75.2 3.0 82.0 34.0 917 8.8 Industry 1,729.0 68.9 100.1 41.5 17,272 166.1 - oil 1,443.0 57.5 4.9 2.0 294,490 2,831.6 - non-oil 286.0 11.4 95.2 39.5 3,004 28.8 Services 702.2 28.1 38.9 24.5 18,051 173.5 Total 2,506.4 100.0 241 100.0 10,400 100.0 GOVERNMENT FINANCE Central Government Millions of RO Percent of GDP 1976 1977 1978 1973-76 1977 1978 Government Revenue 505.4 613.3 509.0 57.1 70.2 58.7 - oil 454.7 482.2 457.7 50.1 55.2 52.8 - non-oil 32.7 38.4 44.6 2.7 4.4 5.2 - grants 18.0 92.7 6.7 4.3 10.6 0.7 Government Expenditure 580.7 534.3 560.0 63.6 59.5 64.7 - Recurrent 385.6 388.4 437.4 40.6 42.8 50.4 (of which: civil) (102.3) (136.6) (154.3) (10.9) (15.6) (17.8) - Development 195.1 145.9 122.6 22.9 16.7 14.2 Overall balance -75.6 71.7 -51.0 -8.5 8.2 -5.9 1/ Government estimate (Statistical Yearbook, 1977) 2! Bank mission's estimate;in the absence of a population census, population estimates vary from 480,000 to 1.5 million (Government estimate for planning purposes) 3/ Growth rate for Omani population only 4/ Based on World Bank Atlas methodology (using weighted average of 1976-78 prices and exchange rates) and 0.86 million population. 5/ Provisional Not available EMENA CPIIB . Not applicable July 1979  Page 2 of 2 pages 1973 1975 1976 1977 1978 MONEY, CREDIT AND PRICES ___ (millions of Rn) Money and Quasi Money 46.7 117.9 164.6 206.6 230.4 Bank Credit to Public Sector 6.6 69.2 107.9 64.4 69.8 Bank Credit to Private Sector 18.9 86.0 120.2 167.1 198.3 (Percentages or Index Numbers) Money and Quasi Money as % of GDP 27.4 15.7 19.5 23.7 27.1 General Price Index .. .. Annual percentage change in: General Price Index .. .. .. Bank Credit to Public Sector .. 22.4 55.9 -40.3 8.3 Bank Credit to Private Sector .. 30.6 39.8 39.0 18.6 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1976-78) (millions of US $) 1976 1977 1978 US $ Mln