Economic Diversification
Definition
Economic diversification is the process of expanding the range of economic activities and revenue sources within an economy, reducing dependence on a single commodity or sector. It involves developing new industries, markets, and capabilities to create a more resilient economic structure.
Context
For Oman, economic diversification is an existential priority given finite oil reserves and volatile hydrocarbon prices. Vision 2040 identifies tourism, logistics, mining, manufacturing, fisheries, and renewable energy as priority diversification sectors.
Example
Oman’s investment in the Duqm Special Economic Zone, green hydrogen projects, and tourism infrastructure represents tangible diversification actions that aim to reduce the share of oil revenues in total government income from over sixty percent to below thirty percent.