Oman's eighth five-year development plan (2011-15) was ratified by royal decree on January 1st and details of the plan were presented the same day by national economy minister, Mr Macki. The most significant aspect of the plan is a fourfold increase in planned expenditure on new and ongoing projects, compared with the seventh five-year plan. Some OR12bn (US$31.2bn) has been allocated for new projects, compared to the OR3bn planned spend for 2006-10. Of this, OR6.4bn has been allocated to projects ongoing from the seventh five-year plan, and OR5.6bn earmarked for new projects. Total investment is expected to be OR30bn, over 110% higher than the figure in the previous development plan. The considerable increase in planned investment has been made possible by the rise in global oil prices since the publication of the last plan. The average price for Oman's oil over the period of the seventh plan (2006-10) is estimated to have been about US$73/barrel. By contrast the average price for 2001-05 was just US$32/b.

The latest development plan is based on an assumed average oil price of US$59/b and an average oil production rate of nearly 900,000 barrels/day (b/d). Oil production rates have been recovering steadily since the decade low in mid-2007: recently published figures show that average production was just over 860,000 b/d for the first ten months of 2010. Higher oil prices and increased production are expected to contribute to average annual government revenue of OR7.5bn. Average annual public expenditure is planned at just over OR8.5bn which will result in an annual average deficit of just over OR1bn, representing 14% of total revenue.

Mr Macki said that the plan aims to achieve an annual growth rate of 3% at constant prices, with low inflation rates at an average of 4%. The ministry forecasts that GDP will grow at an annual average rate of 6% at current prices, and 5% at constant prices, however. There were no big surprises in the plan, which follows the aims of Oman's long-term development strategy, Vision 2020. Mr Macki outlined the objectives of the plan and itemised some of the projects that will be implemented over the next five years. Investment expenditure for the oil and gas sector continues to be a high priority with OR3.2bn allocated to oil production and OR3.4bn to gas production. The government invested heavily in increasing production over the period of the seventh plan (2006-11) and this policy has been paying off.

The drive for economic diversification is to continue by developing tourism, agriculture, industry and fisheries. The expansion of Muscat and Salalah airports (OR470m; US$1.2bn) and the construction of a network of new regional airports (OR184m) are to be completed. Docks for liquids and bulk materials are to be completed at Duqm (OR216m) and additional quays built at Salalah port (OR184m). A network of ports and facilities for fast ferries is to be constructed along the coast at Salalah, Hasik, Shuaymiya, Al Halaniyat Islands, Shna, and Masirah (OR63m), and a sea port, floating dock and road network are also to be built on the Al Halaniyat Islands (OR39m). Fishing ports are planned for Barka, Al Masnaah, Muhout, Sadah, and Shuaymiya (OR26m) and there is to be an integrated plan for the management of date palm pests (OR8.4m). OR570m has also been allocated over the plan period for financing tourism development projects, presumably through Omran, the state-owned tourism development company, and an Oman cultural complex is to be built (OR32m). According to Mr Macki, non-oil activities are expected to grow annually at 10% at current prices and 6% at constant prices.

The development of human resources continues to be a significant theme, with a 50% increase in government spending on education, and an increase of nearly 90% on health, compared with the previous plan. Over 100 new schools are to be constructed (OR63m) and a thousand grants are to be made for post-graduate studies abroad (OR100m). Major new hospitals are to built in the capital, Muscat (OR140m), and Salalah (OR48m), in addition to new hospitals at five regional towns (OR55m).

According to Mr Macki, the plan aims to increase the role of the private sector in the national economy by developing the small business sector; developing the financial sector to provide profitable investment opportunities; and developing infrastructure. In addition to the sea and airport projects mentioned above, there are several large road projects planned, including construction of the Al Batinah express road (OR250m)-presumably an extension of the Muscat expressway-and the third phase of the Al Batinah coastal road (OR200m) together with replacement houses for those displaced by the road's construction (a further OR200m). Several major routes are to be widened to dual carriageway, including Nizwa-Thumrayt (OR250m), Bidbid-Sur (OR240m) and Ibri-Jabrin (OR73m). The government is to continue investing in water supply and wastewater projects, as well as groundwater recharge dams and flood-prevention dams. A water supply network is to be built from Wadi Dhayqah (where a dam is nearing completion) to Qurayat and Muscat (OR48m), and an emergency reservoir constructed in Muscat (OR40m), presumably prompted by the interruption to water supply caused by flood damage following Cyclone Gonu in 2007. Wastewater networks are to be built in Barka, Sohar and other towns (OR65m), and OR87m has been allocated to fund wastewater company projects. A major infrastructure project, conspicuously absent from those mentioned in connection with the eighth plan, despite receiving much publicity, is the proposed railway from the border with the UAE to Muscat, and possibly to Duqm and Salalah.

The pace of implementation of Oman's digital strategy is to increase with the start of digital television broadcasting (OR20m) and the creation of a national information-technology back-up system (OR19m). An objective of the five-year plan is to widen job opportunities for Omanis, and between 40,000 and 55,000 jobs are expected to be created each year on average, although how many of these will be filled by nationals remains to be seen, as many will be in construction, which is still largely manned by cheaper expatriate labour.