Oman has capitalized on its history of trade and seafaring to cultivate globalization and economic diversification. Centuries of trade in frankincense first established Oman's role in global commerce. Today, Oman is using its peak in oil production to maximize economic opportunities in natural gas, manufacturing, transportation and knowledge industries. It has liberalized markets, invested in infrastructure like ports and research centers, and aims to transition to a knowledge-based economy. While oil remains important, the private sector is taking a leading role in job creation and economic growth is increasingly driven by non-oil industries. Oman's strategic location, open economy, and focus on developing new industries means it is well positioned for long-term

1. DISTRIBUTION: 11
QPS
C M Y K VERSION 00
B
FILENAME HEREXX XXXX
DOMES- EUROPE
XX
ASIALATIN AM
A
CENTURIES OF TRADE HAVE GIVEN THE
SULTANATE A UNIQUE VISION. TODAY, IT IS
USING AN OIL PEAK TO MAXIMIZE ITS OPTIONS
Oman: at the cutting edge
An aromatic gum resin found in the Dhofar mountains first put
Oman on the world map. The intense perfume obtained from
frankincense is said to have exercised incantatory powers over
consumers. Trade in the early Middle Ages reached as far as
Alexandria, from where it was loaded onto vessels headed for
Genoa. A nation of seafarers, Omani merchants later spread the
mystique of frankincense to Zanzibar, where it is still sold at out-
door markets.
History can offer smart parables. Oman is located on the
southern tip of the Arabian Peninsula, midway between Asia and
Europe. The nation governed by Sultan Quaboos has learned to
cultivate globalization on its own terms ever since its forebears
explored the Indian Ocean in intrepid dhows. It comes as no sur-
prise then that it is beginning to lay the foundations of what it sees
as a future knowledge-based society. It has liberalized mobile net-
works and opened R&D labs in Muscat, the capital, to maximize
its options.
But Oman is much more than the sum of its historical feats.
Natural gas, a clean-burning fuel, offers a conduit to future eco-
nomic sustainability. The Sultanate is a classic small, open economy
where the tax regime is flexible and inflation is low. Future mone-
tary union with members of the Gulf Cooperation Council (GCC)
will serve to anchor macroeconomic policy. "We are coordinating
policies, designing institutional support and national data systems,"
says Central Bank President Hamood Sangour al Zadjali.
For decades, policymakers knew that oil reserves were finite.
In 1998, a downturn in oil production forced a rethink of eco-
nomic opportunities. Output of oil and condensates is down to
735,000 barrels per day (bpd) in 2005. According to the state-
owned Petroleum Development Oman (PDO), this year marks a
low point ahead of a projected rise back up to 800,000 bpd in
2009. Not to worry. Oil peaking is often a definitional concept tied
to the availability of new technologies.
Geography, it turns out, is a useful ally. Oman is on the world
energy map not only because of its crude output. Its exports of nat-
ural gas will generate $24 billion over the next 25 years, according
to Minister of National Economy Ahmed Macki. The reason behind
this explosive growth is a global switchover to natural gas at elec-
tricity plants. By 2010, world gas demand will surpass 40 million
cubic meters per day. "The strategy to reduce our dependence on oil
is multidimensional. Our share of oil in GDP has decreased from
about 70% to 40%. The completion of our LNG project is thus a
major achievement," says Macki. With oil prices showing little sign
of weakness, petroleum has not lost its appeal. But on a conceptual
level, it is losing momentum to private sector initiatives.
Part of the momentum was lost in 1998 when oil prices fell
below $10 per barrel. The authorities launched a diversification
program known as Vision 2020, which involved gas sales to
finance infrastructure projects. The objective of Vision 2020 is to
gradually build the base for a competitive workforce in IT. In the
meantime, Oman has opened a high-tech transshipment seaport to
tap container traffic. Within two years, the port of Salalah has
picked up contracts with shipping companies in Singapore. It now
competes with Abu Dhabi. At the marine terminals in Sohar, fer-
tilizer plants were added to marine terminals to maximize indus-
trial uses. Natural gas pipelines feed both seaports.
Minister Macki thinks GDP will grow 9% in nominal terms in
2006. Of that figure, he attributes 5% to the non-oil sector. Omani
entrepreneurs are looking forward to projects spinning off of the
privatization program. Many will be gas-based, but others will
reflect how well Oman has adapted to globalization: mobile net-
works and airport services. "Since the private sector will take the
lead in job creation in the long term, we are accelerating the sell-off
program. The main privatization targets will be in power, water and
telecommunications," says Macki. By then, Oman will have come
full circle from trade in frankincense to sales of cellular bandwidth.
SPECIAL ADVERTISING FEATURE
OMAN At the cutting edge
BusinessWeek
PHOTOS LEFT AND CENTER: WERNER THIELE; RIGHT: HANNE & JENS ERIKSEN. ALL PHOTOS COURTESY OF MINISTRY OF TOURISM
As seen in
Special Advertising Sections
opyright 2006 The McGraw-Hill Companies, Inc.
As seen in
Special Advertising Sections
Copyright 2006 The McGraw-Hill Companies, Inc.
As seen in
Special Advertising Sections
© Copyright 2006 The McGraw-Hill Companies, Inc.

2. DISTRIBUTION: 11
QPS
C M Y K VERSION 00
B
FILENAME HEREXX XXXX
DOMES- EUROPE
XX
ASIALATIN AM
SPECIAL ADVERTISING FEATURE
BusinessWeek
INDUSTRY
OPP: multi-million dollar project
The modern Sohar Industrial
Port, 250km northwest of capi-
tal Muscat, will house the new
PP plant which is expected to
be up and running by
September 2006.
The new plant in Sohar will
boast a production capacity of
340,000 metric tons per year of
PP manufactured in pellet form
of various grades. OPP uses the
Novolen technology — a tried
and true system used around
the world — to manufacture its
competitively priced product.
And in a move to give the pro-
ject international reach and
equip it with technological and
marketing know-how, the
Omani government has
brought Korean giant LG
International on board as a
strategic partner. Indeed, LG
will be responsible for interna-
tional markets other than those
in which Oman Polypropylene
LLC is traditionally active, such
as the Middle East and the
Indian subcontinent.
Be it regionally or globally, the
PP market certainly is brimming
with potential. Worldwide
demand has exploded in recent
years, reaching 35 million tons
in 2003, making polypropylene
second only to polyethylene in
the plastics sector. And OPP is
uniquely positioned to bring
value to the market. Says Dr.
Mohammed Benayoune, Oman
Polypropylene’s Chief Executive
Officer: “In our market studies,
we came out to be the lowest
cost producer, even compared
to Saudi Arabia, the reason for
this being that our plant is inte-
grated with the refinery. The
refinery has all the utilities and
storage on its side which means
that our costs are lower than
that of a normal PP plant.”
All of this bodes well for
Oman’s future in the petro-
chemicals sector. The determi-
nation of this smaller country
— often in the shadow of
regional giant Saudi Arabia —
can be seen in the company’s
unwavering commitment to
national development. Dr.
Benayoune explains: “Job cre-
ation is one of the major
objectives for the government
in Oman, and we are hoping to
help the government in that
respect”. The environment also
figures highly among OPP’s pri-
orities, and the company
abides by strict environmental
protection guidelines.
Local and foreign investors
have been quick to respond to
the opportunities presented by
the project. The fact that the
new plant is located in the
ultra-modern Sohar Industrial
Port is particularly attractive, as
is the complete technical sup-
port that OPP offers its cus-
tomers. Dr. Benayoune points
out that the innovative nature
of the downstream PP business
has brought plenty of jobs and
investors to Oman’s neigh-
bours in the Gulf, adding, “We
are hoping to do something
similar here in Oman, obviously
on a smaller scale. We
observe closely what other
countries have done, and we
try to learn from their success-
ful experience.”
DESTINED TO BE A KEY PLAYER IN OMAN’S THRIVING DOWNSTREAM INDUSTRY IS THE OMAN
POLYPROPYLENE PROJECT (OPP), WHICH AIMS TO MAKE POLYPROPYLENE — A PRODUCT THAT IS
INCREASINGLY BEING HAILED FOR ITS VERSATILITY — A CATALYST FOR NATIONAL GROWTH

3. DISTRIBUTION: 11
QPS
C M Y K VERSION 00
B
FILENAME HEREXX XXXX
DOMES- EUROPE
XX
ASIALATIN AM
SPECIAL ADVERTISING FEATURE
OMAN Tourism
T
Tourism and the
economy
The successful promotion of tourism any-
where relies heavily on the physical attrib-
utes that a country has to offer. It is a fact
that Oman does have quite a few advan-
tages over other beautiful destinations: it is
the friendliest, greenest country in the
Arabian peninsula, a part of the world
which has never lacked fascination. Oman,
compared to some Islamic countries takes a
more moderate approach to its religion and
truly welcomes travelers. “In this troubled
world of today where lack of security is a
common phenomenon rather than an
exception, Oman stands as one
of the very few countries where
tourists from any nationality
can enjoy a safe environment,”
says Minister of Tourism Dr.
Rajiha Abdul Ameer Ali.
The trade routes which
Omanis founded or followed
for centuries probably have
something to do with their easy
acceptance of strangers. Apart
from Portuguese and Turkish
dominance of the coastal
regions between 1508 and
1650, it was the Omanis themselves who
extended their territories abroad as far as
the fabled Zanzibar which nowadays
belongs to Tanzania. The Muscat rulers also
established trading posts on the Persian
coast and went even to Pakistan. Coveted
by both the French and the British (who had
seized Oman’s overseas possessions)
throughout the 19th century, the Sultanate
concluded several treaties of friendship with
Great Britain. English is therefore widely
spoken in Muscat, which tends to make the
life of tourists more pleasant.
The Ministry of Tourism is engaged in
a program of maintaining a considerable
number of forts and castles while providing
them with the audiovisual means to depict
the history of the country. The attractions
in Oman, however, don’t stop at passive
sight-seeing of monuments to its captivat-
ing past: the more adventurous should
know that coral lined fjords, going as deep
as 40 meters, afford some of the best
scenery in the diving world. Dolphin, whale
watching or surfing are also popular
options with visitors, and more options
including eco-tourism are being developed.
Within the framework of diversifying
the economy away from oil,
tourism should play an impor-
tant role. The annual growth
rate of the sector’s GDP has
been of over 3% and the pri-
vate sector is being seen as a
strategic partner with which to
capitalize on all the assets the
country offers. “We are work-
ing on increasing private sector
activity in tourism by the intro-
duction of an appealing incen-
tive package on the one hand
and encouraging foreign
investment on the other hand,” says the
Minister. A project for the construction of
three top-class hotels at Barr al Jissah
should be commissioned in joint public-pri-
vate venture this year. The idea is that even-
tually the government role would be con-
fined to the development of infrastructure.
“We have achieved remarkable progress in
the last thirty years in building a network of
roads, communications and public utilities
all over the country,” adds Dr. Rajiha
Abdul Ameer Ali. Such infrastructure pro-
jects will certainly serve to increase the
availability of diverse experience to even
the most jaded travelers.
RUGGED MOUNTAINS,
DEEPWATER FJORDS,
SPECTACULAR SAND
DUNES, GREEN HILLS
AND QUIET BEACHES
ARE ASSETS TO THE
COUNTRY’S TOURISM
MARKETING STRATEGY
Dr. Rajiha Abdul Ameer
Ali, Minister of Tourism
PHOTO HANNE & JENS ERIKSEN, COURTESY OF MINISTRY OF TOURISM

4. DISTRIBUTION: 11
QPS
C M Y K VERSION 00
B
FILENAME HEREXX XXXX
DOMES- EUROPE
XX
ASIALATIN AM
BusinessWeek
SPECIAL ADVERTISING FEATURE
In the world according to Omzest,
dreams can come true. And dreams
deliver handsome profits. Omar Zawawi,
founder and CEO of the Omzest group of
companies, has turned a simple tenet
into the cornerstone of his 34 years in
business. The formula has struck a chord
in the Sultanate of Oman, where Zawawi
has deals in construction, banking,
manufacturing, logistics and education.
The 70 companies in the Omzest family
cover a vast territory of dreams. By
thinking ahead, there is never a deficit of
ideas.
“We constantly assess customer needs and
work out the technical viability of projects.
Later, we figure out how to add value to
our product line,” says Zawawi. His life as
entrepreneur harks back to 1973, when
Zawawi built a series of medical complexes
in record time. Within 18 months, six
different Omani towns got their hospitals
and schools. This was in the days when
Oman boasted dirt roads and inland towns
were off boundaries to strangers.
That same year, Omzest,with a group of
investors, paid for machinery to start
Oman Flour Mills. Zawawi was soon
behind port services and the precursor of
Oman’s national airline. Cement factories
followed. The race of diversification led
Omzest to penetrate the world of
broadcast media. Decades before Al
Jazeera went on the air, Zawawi’s group as
contractors for the Government of the
Sultanate of Oman constructed the Gulf’s
first color television station. The whole
process, from first contract to first
newscast, took less than 8 months. Oman
came into the 20th century with a
Technicolor makeover in 1974.
To continue its expansion, Omzest began
to seek internal sources of finance and
created Oman International Bank, the first
100% Omani-owned financial institution.
Zawawi then entered a joint venture with
the Overseas Trust Bank of Hong Kong
and Singapore. This led to the formation
of the Oman Overseas Trust Bank, later
bought out and renamed as BankMuscat.
It was one of the first signs that the
Sultanate was fully integrated in the
global economy.
Three years ago, in association with the
Birla Institute of Technology in India,
Omzest started the Waljat Colleges of
Applied Sciences. At Waljat, students
receive top-notch training and hands-on
experience with an emphasis on R&D. It is
a unique way to further the goals of
Omanization of the workforce. “Training
and education are vital sectors,” says
Zawawi. “In our own way, we hope to
contribute to the aspirations and growth
of our employees.”
However, the manufacturing sector is still
a priority for the economy, long
dependent on exports of natural
resources. From footwear to decorative
glass, manufacturing activity contributes
41% of Omzest revenue and accounts for
two-fifths of turnover. The factories in the
holding export production to 90 different
world markets. Certificates of quality, such
as ISO/HACCP, are creating new demand.
And a wealth of small and medium-sized
enterprises ensures long-term
employment and keeps workforce skills
versatile.
Today, due to the Leadership and unique
foresight of H.M. the Sultan, Oman is
proudly reclaiming its historical legacy as
a seafaring nation. The port of Salalah has
become a case study for its forward-
looking approach to 21st century
transhipment flows. And the beaches of
the Musandam Peninsula are drawing
divers from as far as Moscow.
Furthermore, the stability - economic,
political and social has paved the way for
entrepreneurs like Omar Zawawi with a
knack for anticipating trends to succeed.
OMZEST thinks the
unthinkable
Omar Zawawi, founder and CEO
of the Omzest group of companies

5. DISTRIBUTION: 11
QPS
C M Y K VERSION 00
B
FILENAME HEREXX XXXX
DOMES- EUROPE
XX
ASIALATIN AM
SPECIAL ADVERTISING FEATURE
OMAN Telecom
BusinessWeek
O
Oman has a lot of bandwidth. With a population of 2.5 million and
seas of sand between its urban centers, it is no conventional market
for mobile operators. Still, this is one of the most profitable mobile
markets in the Middle East. The reason has to do with competition.
The Sultanate is the oldest independent state in the Arabian
Peninsula. Until recently it was virtually cut off from the rest of the
world. But this is in stark contrast to the dynamism with which
telecoms have picked up business ever since. Mobile subscribers
(24.2%) now far surpass the number of fixed line subscribers
(9.2%). In Muscat, systems suppliers are busy devising end-to-end
solutions and managers are talking to their customers.
Oman likes the fact that mobile operators not only introduce
jobs and competitive prices, but also training in cutting-edge tech-
nology. Students at Sultan Qaboos University can now gain prac-
tical knowledge from internships in Siemens or Ericsson. With e-
government projects in the works, their skills will come in handy.
And by rolling out ADSL networks, Omani businesses can open
new markets in the GCC.
Ahead of deregulation in the telecommunications sector, the
government drew up a Telecom Regulatory Authority (TRA). In
February 2004, Omantel, the comfortable state monopoly, was
forced to spin off Oman Mobile. The TRA required that the new
operator be listed at the Muscat Securities Market to ensure trans-
parency and an accurate valuation of assets.
Telecom: the focus is coverageBUNDLED SERVICES, ROAMING CONTRACTS, INTELLIGENT NETWORKS, MISSED CALLS, SMS,
GSMS: COMPETITION IS BRINGING MORE SERVICES TO MOBILE CUSTOMERS IN OMAN
According to the Minister of Communications, Mohammed al
Harthy, by 2009 the number of mobile subscribers is likely to reach
1.5 million, a penetration rate of 51.7%. But things are fast-paced in
the cellular world and business focus is changing. “Before, the net-
work was the priority. Now it’s coverage. We go as far as possible in
our claim that we have 95% coverage of the populated area of
Oman,” says the managing director of Oman Mobile, Amer al Rawas.
Oman Mobile runs a GSM network based on 2.5G technolo-
gy. Its prepaid service, Hayyak, accounts for 62% of its customer
base. With the entry last year of Nawras Telecom, a Danish and
Qatari-led consortium, Oman Mobile shifted priorities to the con-
sumer area. “We don’t want to flaunt the fact that we are a big
company in Oman that makes a couple hundred million dollars.
We want to talk about the shift that we are undergoing. Now we
can begin to show results,” says Rawas.
For Oman Mobile, the best position in the market is as a con-
sumer-oriented organization. In the Sultanate, this is measured by
reliability of service. Oman Mobile has several competitive advan-
tages: nationwide coverage and technical quality. It is currently
working with Siemens to develop a high-end intelligent network.
Will its prepaid customers ask for an upgrade?
SABCO Group, established in
1977 during the early
Renaissance days, has varied
interests in investments, real
estate, retail business, services
and manufacturing, through
wholly owned companies, joint
ventures, equity participation
and public companies. Many
of the group companies are
leaders in their respective
industries such as SABCO Art
in advertising and media,
Amouage in the exclusive per-
fume business, SABCO Centre
in retailing, and Al Hail
Investments in asset manage-
ment, to name a few.
This family owned group has
some of its founding members
devoted entirely to the gov-
ernment activities while other
members’ focus is entrepre-
neurial. SABCO Group’s
Chairman, Khalid bin Hamad
Al Busaid, an MBA graduate
from the prestigious Henley
Management College
(Europe), has been instrumen-
tal in restructuring the group
by focusing on creating proper
corporate governance using
the model of the public com-
pany; a unique approach by a
family owned business. He has
introduced key phased sys-
tems and policy processes,
creating transparency and
credibility securing the inter-
ests of the stakeholders.
Today, the reforms are showing
progress, enabling the Group
to reach even higher levels of
success, contributing to the
socio-economic development
of Oman.
RESEARCH: M. Monte - MARKETING: C. Johansson - TEXT: P. de Zardain - DESIGN: J. Berrio
www.vegamedia.coma VEGA MEDIA creation
“As one of the leading groups
in Oman, Sabco is committed
to its vision of progress while
contributing to the develop-
ment of the country.”
Khalid bin Hamad al Busaid, Chairman
FOCUS: SABCO GROUP