GOSO Impact of recent policy changes

GOSO Impact of recent policy changes

This work seeks to research the function and impact of recent policy alterations made by the Government of the Sultanate of Oman ( GOSO ) to let exiles i.e. non Omani citizens to buy residential belongings in the Sultanate.

In peculiar every bit good as documenting the grounds behind the policy alteration it seeks to place and quantify the impact of a assortment of policy instruments deployed by GOSO on land and rental values both within the countries where exile purchases are allowed, the ‘Integrated Tourism Complexes ‘ ( ITC ‘s ) and more loosely within the mainstream residential belongings sale and rental markets.

In making so and in order to help and clear up the analysis it applies a typology of public policy tools drawn from the work of Adams et Al ( 2003 ) . Whilst these are drawn from UK research, it is considered that they provide a systematic attack in all residential land and belongings markets to placing the types of public policy tools utilised and supply a suited model for measuring their impact.

The research is presented in six chapters ;

Chapter One – Provides an debut to the thesis capable affair and includes a principle for the subject chosen and the purposes, aims and hypothesis of the thesis. This chapter besides seeks to supply the reader with an apprehension of the modern economic history of the Sultanate and the economic policy model under which the residential belongings policies have been pursued.

Chapter Two – Focuss more explicitly on the development of private residential lodging targeted at the exile buyer market peculiarly in the ITC ‘s and explores the grounds for their constitution in policy footings by GOSO. This chapter besides includes the background to the Royal edict leting expatriate purchase and a brief description of current and planned ITC ‘s in the Sultanate.

Chapter Three – Undertakes a reappraisal of the academic and theoretical literature in this research country. The chief subjects covered include economic theories of lodging economic sciences, the policy aims and function of authorities intercession in existent estate markets and introduces the typology of Adams et Al ( 2003 ) as a vehicle for analysing the GOSO ‘toolkit ‘ of policy instruments used to excite the market.

Chapter Four – Analyses the scope and type of research methods that could be undertaken to research this capable country and concludes with an rating and choice of the research method to be adopted in this work and the grounds underlying this.

Chapter Five – Comprises of an analysis of qualitative informations collected through a semi structured interview attack used to interview cardinal public and private sector histrions in this policy country and quantitative research obtained through an analysis of Oman existent estate market studies

Chapter Six – In this concluding chapter the writer draws decisions and provides recommendations for international economic development professionals seeking to utilize ITD ‘s as a vehicle for national or regional economic development based on the Omani experience in this country.

Chapter One – Introduction to the Research Topic and the Sultanate of Oman


In states with a long tradition of unfastened markets for lodging development in both for sale and for rent, it is frequently hard to spot the impact of authorities policies and policy instruments in this sector because of the impact of many interrelating factors. However the Sultanate of Oman, which long prohibited the development of lodging for sale and onward lease by exiles, has late opened up this market section to exiles.

Oman therefore provides an ideal state of affairs to prove out theories and typologies of policy tools used by authorities to excite this sector by looking at their impact on land and belongings values both positive and negative. Due to the failure of macro-economic theory to adequately explicate the impact of authorities policy on the market and the failing of generalizing general accounts from a instance survey based attack in mature markets, this is an facet of the existent estate market which should be reviewed and analyzed and the decisions of which can lend much to the work of existent estate and economic development professionals seeking to utilize this internationally spread outing sector as a agency of national or local economic development in their countries.


To look into and measure the impact of policy alteration which opened up Oman ‘s existent estate market on residential belongings values in Oman.


In order to accomplish this purpose the research has the undermentioned bomber aims ;

• To analyze the consequence the policy alteration has had on residential belongings values ( house monetary values ) in both the ITC ‘s and the broader lodging market of the Sultanate ‘s capital, Muscat.

• To find if the policy alteration has increased or decreased the degrees of supply

• To set up whether rental values have been positively or negatively affected by the debut of the new Royal Decree allowing expatriate ownership of ITC belongingss

• To look into how land values have been affected

• Measuring the policy instrument that has been utilized by the Government of Oman to back up the economic development aim

More specifically this work has been undertaken to prove the undermentioned hypothesis ;

If there are alterations in the signifier of authorities intercession leting exiles to buy residential freehold belongings in Oman so the supply and values of residential belongingss will increase?

Background to Oman

Location and Size

The Sultanate of Oman is strategically situated on the South East Coast of the Arabian Peninsula and portions boundary lines with Kingdom of Saudi Arabia to the West, Yemen to the south-west and the United Arab Emirates ( UAE ) to the north-west. Oman has an country of about 212,460 square kilometres ( 82,030 square stat mis ) and a coastline that extends 2,092 kilometres ( 1,299 stat mis ) from the Strait of Hormuz to the Northern boundary line of the Republic of Yemen.


Oman has a really alone history and at one clip had its ain imperium, which at ?its peak in the nineteenth century stretched down the east African seashore and vied with Portugal and Britain for influence in the Gulf and Indian Ocean ‘ ( Oman Country Profile – BBC ) . Under the former Sultan, Sultan Said bin Taimur, who came to power in 1938, Oman experienced decennaries of international isolation and internal rebellion. With the aid of British Advisers, the current Sultan, Sultan Qaboos bin Said assumed power on July 23rd 1970 in a thick of internal struggle in a ‘country plagued by endemic disease, illiteracy and poorness ‘ ( Country Profile -US Department of State ) . After force outing his male parent in 1970, Sultan Qaboos embarked on immense economic, political and societal reforms including get rid ofing the harsh limitations which resulted in its international isolation. A modern authorities construction was established and development plan to better and supply a modern substructure and the development of exporting the huge sums of the state ‘s natural resources.

Geography and Climate

The Sultanate of Oman is composed by diverse topographic countries with comeuppances accounting for 82 % of the land country and mountains 15 % . The staying 3 % is the coastal field overlooking the Gulf of Oman where the bulk of the population lives in and around the capital metropolis of Muscat. With the exclusion of the southern Dhofar part, which has a light monsoon clime and receives cool air currents from the Indian Ocean, the clime of Oman is highly hot and dry most of the twelvemonth with the coastal countries sing high humidness. Summer begins in mid-April and stopping points until October. The highest temperatures are registered in the inside, where temperatures of more than 50 & A ; deg ; C in the shadiness are common. The average summer temperature in Muscat is 33 & A ; deg ; C, but the ‘gharbi ‘ ( literally translated as ?western? ) , a strong air current that blows from West can raise temperatures from the towns on the Gulf of Oman by 6 & A ; deg ; C to 10 & A ; deg ; C. Winter temperatures are mild and pleasant, runing between 15 & A ; deg ; C and 23 & A ; deg ; C.


Unlike other Gulf States such as the UAE, Bahrain and Qatar, Oman has a big country and a comparatively big autochthonal population of assorted tribal groups mostly united by a common faith – the Ibadhi religious order of Islam. The Sultanate of Oman is divided into 9 administrative Regions of which 4 are called Governorates ( Muscat, Dhofar, Musandam and Al Burami ) and the other 5 are called Regions ( Al Batinah, A’Sharqiyah, A’Dakhliyah, A’Dhahirah and Al Wusta ) . These governorates and parts are comprised of 59 territories called wilayats under the disposal of a ‘Wali ‘ or city manager. About 55 % of the population lives in Muscat and the Batinah ( Basin ) coastal field northwest of the capital ; about 215,000 live in the Dhofar ( southern ) part, and about 30,000 live in the distant Musandam Peninsula on the Strait of Hormuz. Oman is presently roll uping informations for the 2010 nose count therefore the most recent information is that of the 2003 nose count which has Omans population at 2,340,815, with 23.9 % being expatriates this a 2.0 % addition on the 1993 nose count. As of the 2003 nose count Oman has population denseness of 7.6 people per kilometer in comparing to Scotland which has a population denseness of 64 people per squared kilometer. Harmonizing the US State Department the current population estimation is 3,337,000 ( including 580,000 exiles ) .


Oman is a Sultanate ( one of merely two in the universe the other being Brunei ) – an absolute monarchy although there are increasing moves to increase public engagement through audience in determination devising through the constitution and elections to the Majlis a Shura and the Majlis a Dowla ( Upper and lower houses of a proto parliament ) .


In the past decennaries Oman?s economic system has relied entirely on agribusiness and traditional handcrafts. Indeed every bit tardily as the 1970 ‘s, Oman was described by many observers as about medieval in societal and economic constructions ( Rabi 2006, Allen 1987 ) .

Oil geographic expedition and production has been the chief drive force of the economic system since its find and commercial production in the early 1970 ‘s and has enabled Oman ‘s development over the last 40 old ages. In common with other Gulf states oil gross histories for a big proportion of the GDP and last twelvemonth Oman was 24th in the world-wide list of oil production.

However, Oman is non a typical Iranian Gulf oil manufacturer due to its little, scattered oil Fieldss and, as a consequence, production costs are much higher per barrel than those in other GCC states. Since 2003 oil production has been shriveling. In 2007 entirely, rough oil production fell 13.4 % with some gauging oil will run out by 2022. However, billowing crude oil monetary values mean that oil grosss still play a really of import function in Oman ‘s economic system.

The state has an institutionalised economic planning system with the production of 5 twelvemonth economic development plans the first being produced in 1975. Economic policy has focused on diversifying the economic system off from its trust on the hydrocarbons sector, utilizing the grosss from oil to put in economic variegation and on run intoing the economic and employment demands of a immature and spread outing population. Key and consistent economic subjects have been variegation of the economic system off from Oil and indigenization ( Omanization ) of the expatriate labor force.

Two other policy paperss have shaped the policy model of modern Oman – Vision 2020 ( a strategic vision for Oman ‘s economic system in the twelvemonth 2020 ) produced in 1995 and the Basic jurisprudence of the State produced in 1996 – a quasi- fundamental law for the Sultanate. These paperss every bit good as the 5 twelvemonth programs contain as a cardinal foundation of the programs the consistent policy subjects identified above – indigenization and variegation

In order to speed up economic development big Numberss of exiles were recruited to transport out Oman ‘s economic development. These were chiefly from the Indian subcontinent for manual labor ( although this has changed with turning accomplishment degrees in India ) and from Western Europe ( peculiarly the United Kingdom as the Sultan was educated at that place ) and America for higher degree professional and managerial places. Large expatriate communities ( communities of aliens who have left their ain state to populate and work abroad ) are really common in the Gulf states on history of the oil and services industries.

Employment in Oman is mostly dependent on nationality. In the populace sector, Omanis held 70 % of the occupations in 1999, while in the private sector -which contains most of the lower-paying jobs-90 % of the employees were from foreign states. Due to its non merely big but comparatively immature population force per unit area has been put on authorities to make occupations for the autochthonal population.

In response to this the authorities has initiated a structured and structural attack ( ?Vision 2020? ) to supply solid foundations for a diversified economic base led by the private sector. The Vision for Oman ‘s Economy aims at transporting out a significant transmutation in the construction of the national economic system by developing a multiplicity of income beginnings, alternatively of depending chiefly on a depletable beginning like oil, in order to accomplish economic balance and sustainable growing. It is expected that by 2020, the oil sector part to GDP will be 9 % , while the part of the gas sector will increase to 10 % . The addition of other production and service sectors will lift to 81 % .

The early 5 twelvemonth programs sought economic variegation through the constitution of fabricating industries peculiarly on an import permutation footing supported with Government soft loans. This policy was non a great success as the industries established had trouble in turning out with Oman as other GCC counties had set up similar industries on the same footing and Omanis were non culturally interested in working in fabrication.

Whilst some fabrication has remained a policy precedence for the Government of Oman peculiarly in big scale industrial undertakings using natural resources ( oil, gas or inexpensive power ) as a feedstock, attending in the 5 twelvemonth programs has shifted to other economic countries peculiarly ICT ( where the World Bank prepared an ICT Development scheme in the twelvemonth 2000 ) and Tourism.

Tourism followed in the aftermath of Dubai ‘s increasing success in the sector in the late 1990 ‘s and a acknowledgment that Omani societal attitudes peculiarly towards visitants to the state were really welcoming and appropriate for touristry. There was besides acknowledgment that tourers were seeking more reliable eco and lifestyle tourer experiences therefore bring forthing a new economic driver for indigenization. The comparatively developing Sultanate appealed to this section as did the comparatively big ( by Gulf criterions ) autochthonal population of Oman which contributed to the genuineness of the touristry experience. This rather of course leads to tourers wishing to be served by Omani instead than Indian subcontinent staff.

As can be seen from the above treatment, Oman has been drawn to tourism by a assortment of supply and demand factors. After the comparative failure ( peculiarly in footings of indigenization ) of a fabrication led economic development scheme, the GOSO sought to place and aim economic development chances and sectors that were more consistent with and appealed to the aspirations and character of the Omani people.

Tourism which internationally has been one of the largest economic growing sectors over the past 30 old ages was identified as something that Oman could associate to and benefit from. The challenge for the GOSO was to place a practical programme that would let the Sultanate to profit from this planetary tendency. How this was achieved is revealed in the following chapter.