Overview
Oman and the UAE are both Gulf Cooperation Council members with hydrocarbon-driven economies, yet their trajectories differ significantly. The UAE’s early diversification push, anchored by Dubai’s services hub model and Abu Dhabi’s sovereign wealth, gave it a head start. Oman’s economy, while smaller, is pursuing its own diversification path under Vision 2040 with a focus on logistics, tourism, and mining.
Oman’s Economy
Oman’s GDP stands at roughly USD 105 billion, with oil and gas still accounting for around 30 percent of output. The Sultanate is investing heavily in special economic zones like Duqm and expanding non-oil revenues through taxation reform, including the introduction of a value-added tax. Oman’s debt-to-GDP ratio spiked after the 2014 oil price collapse but has since been brought under tighter fiscal discipline.
UAE’s Economy
The UAE’s GDP exceeds USD 500 billion, making it the second-largest Arab economy. Non-oil sectors contribute more than 70 percent of GDP, driven by trade, aviation, real estate, and financial services. Abu Dhabi’s sovereign wealth fund, ADIA, provides a substantial fiscal buffer, while Dubai’s open economy model attracts global talent and capital at scale.
Key Differences
Scale is the most obvious difference: the UAE’s economy is roughly five times larger. The UAE diversified earlier, particularly through Dubai’s logistics and tourism sectors, whereas Oman is at an earlier stage. Oman retains a larger share of GDP from hydrocarbons. Labour market structures also differ, with Oman pursuing Omanisation more aggressively in certain sectors.
Verdict / Bottom Line
Oman’s economy is on a solid reform path, but the UAE’s diversification head start and larger capital reserves give it structural advantages. Oman’s comparative strengths lie in its strategic location near key shipping lanes, untapped mineral wealth, and a growing emphasis on green energy projects that could reshape its economic profile by 2040.