The Headline Achievement
Oman Vision 2040 is, on the evidence of the 2024/2025 Progress Report, a programme that has delivered in its most tractable areas (fiscal management, institutional reform, education rankings) and faces profound challenges in its most structurally ambitious areas (Omanisation, Economic Complexity, non-oil GDP transformation).
This is not a criticism — it is the normal pattern for ambitious national development strategies. The question is whether the structural challenges are being addressed with sufficient urgency and policy innovation, or whether they are acknowledged but deferred.
The Case for Optimism
Fiscal turnaround: Three consecutive surpluses from a -11.7% GDP deficit baseline is remarkable and real. The deployment of surpluses into debt reduction and the Oman Future Fund rather than current expenditure demonstrates unusual fiscal discipline.
Institutional improvement: The CPI +20 places improvement, the Investment and Commercial Court, the OQEP IPO’s success — these are concrete, measurable improvements in Oman’s institutional environment.
Education early delivery: 5 universities in QS top 500 when the 2030 target was 3 — this is genuine overperformance that creates a foundation for the innovation economy Vision 2040 requires.
Green hydrogen positioning: While commercial viability is uncertain, Oman has attracted credible international partners (Shell, Total, ACWA Power) and signed multiple agreements. The positioning is real even if the commercial outcome is not yet.
The Case for Concern
Omanisation gap: The most politically sensitive target (40% private sector Omani employment by 2040) is running at less than half the required annual pace. Without a structural intervention — not just more of the same — this gap will persist.
ECI ambition vs reality: Top-10 ECI by 2040 would require Oman to develop manufacturing sophistication comparable to Germany or Japan. This is genuinely aspirational in a way that strains credibility. A more realistic ECI target would be top-40 by 2040 — still ambitious, achievable with strong policy.
Non-oil GDP trajectory: 70.5% vs the 83.9% 2030 target suggests the trajectory is on pace for approximately 78-80% by 2030 — 4-6 percentage points short. This gap requires either a major new non-oil sector (green hydrogen production beginning) or structural economic policy innovations.
Youth unemployment: Not explicitly measured in Vision 2040’s public KPIs but implicit in the Omanisation challenge. Youth unemployment is a social stability risk that the labour market and education priorities must address more directly.
The Mid-Point Outlook
The 2030 mid-point review will be the critical accountability moment. If Oman reaches:
- Non-oil GDP: 78-80% (vs 83.9% target)
- Omanisation: 22-25% (vs 35% target)
- CPI: Top 40 (vs top 30 target)
- ECI: Top 40 (vs top 20 target)
- Fiscal: Consistent surplus
- Education: On or ahead of target
…this would represent a programme delivering approximately 60-70% of its 2030 targets, with the near-miss sectors requiring policy recalibration. This is a reasonable development programme outcome — national strategies of this ambition rarely achieve 100% target compliance.
The key question is whether the response to mid-point gaps is genuine policy innovation or target revision downward. The former would be positive for investors; the latter would be a credibility signal.
Investment Conclusion
Vision 2040 is a credible, well-designed development strategy with genuine institutional commitment. It is not equally credible across all its targets — the ECI top-10 goal is almost certainly too ambitious, while the fiscal management targets have been exceeded. For investors, the programme’s credibility is sufficient to justify a re-rating of Oman’s country risk premium over the 2025-2035 period.
The green hydrogen wildcard is the largest unknown — if it materialises, Vision 2040’s diversification trajectory improves dramatically. If it does not, the non-oil GDP shortfall will persist.