The government will continue to pursue reforms that lead to diversification away from oil and gas and that promote non-oil exports. However, the immediate focus will be on increasing the number of jobs for Omanis in both the public and the private sector and, it is hoped, providing Omani students with the relevant qualifications to make them employable in the job market. The new eighth five-year development plan (2011-15) allocates more than OR1.5bn (US$3.9bn) to the development of non-oil exports and infrastructure development. However, the government will also invest in increasing Oman's crude oil production. A shortage of gas may cause some projects to be delayed. Plans to expand gas production are under way with a total of OR412m (US$1bn) set aside. Tourism will play a key role in diversifying revenue. Efforts to increase the role of the private sector in large-scale projects will continue. We have increased our oil price forecast for 2011 to an average of US$101/barrel for Brent Blend, and Oman is financially well positioned to withstand a fall in oil prices as it has based its 2011 budget on a price of US$58/b.

The government will intensify its "Omanisation" policy (the replacement of expatriate workers with local staff) in light of the protests. It will focus on educating and training Omanis to develop local professional and technical expertise. The authorities recently increased the minimum wage for Omanis employed in the private sector by 43%, and we expect other such measures to be implemented, although they will have a limited impact on stemming the protests, if they are not accompanied by political reform. The private sector will come under pressure to meet targets to increase the number of jobs for Omani citizens, while cracking down on illegal workers in the country. Despite changes to the Labour Law, however, supply-side problems are likely to continue to slow progress on Omanisation.