Overview
Oman must balance directing capital into domestic economic development with the need for international investment diversification. The tension between onshore and offshore investment priorities shapes fiscal policy and sovereign wealth management.
Onshore Investment in Oman
Onshore investment in Oman includes infrastructure development, industrial zone construction, energy sector expansion, and social services. Government capital expenditure has focused on roads, ports, airports, and the Duqm development. Private onshore investment targets real estate, retail, services, and increasingly, renewable energy. Vision 2040 calls for raising total investment to 27 percent of GDP.
Offshore Investment from Oman
Oman’s offshore investments are managed primarily through the Oman Investment Authority (OIA), which oversees sovereign wealth across global asset classes. Offshore portfolio investments provide returns that supplement oil revenues and diversify the nation’s wealth base geographically. Omani corporates also invest regionally, particularly in the UAE, India, and East Africa.
Key Differences
Onshore investment directly creates jobs and builds productive capacity, while offshore investment provides financial returns and risk diversification. Onshore projects face execution risk and are concentrated geographically, whereas offshore portfolios benefit from global diversification. The opportunity cost of directing capital offshore is reduced domestic development spending.
Verdict / Bottom Line
Oman needs both strategies. Onshore investment is essential for diversification and employment, while offshore investment protects national wealth against domestic economic volatility. The optimal balance shifts as Oman’s economy matures; currently, the priority should lean toward onshore productive investment to build the non-oil economy.