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Part Ii Road Network Planning PART II ROAD NETWORK PLANNING CHAPTER 6 FUTURE SOCIOECONOMIC FRAMEWORK CHAPTER 6 FUTURE SOCIOECONOMIC FRAMEWORK 6.1 DEVELOPMENT POLICY OF SOCIOECONOMIC FRAMEWORK 6.1.1 Consideration on Development Policy of Oman Government At present, the most important Oman Government's long-term development policy is "Oman Vision 2020". The primary aim of the Vision is to maintain at least the current (1995) level of per capita income in real terms, and strive to double it by 2020. In order to move from an economy based on a mono depletable source continuously by external economic and political factors to an economy with varied and renewable sources, it is essential if economic diversification is to be achieved. Quantitative and qualitative indicators for economic diversification are shown in Table 6.1-1. In order to improve the employment situation of Omanis, human resources development is important. The Vision shows the target percentages of employed Omanis in 2020; for the public sector 95%, and for the private sector 75%. For the preparation of future socioeconomic framework, the above-mentioned targets are taken into consideration as much as possible. 6.1.2 Basic Policy and Methodology for Socioeconomic Framework 1) Target Years Year 2000 is adopted as the base year. For future socioeconomic framework, years 2005, 2010, 2015, 2020, 2025 and 2030 are determined as target years. In addition, year 2003 (Census year) is used for the preparation of national level framework. 2) Basic Considerations As the preliminary results of 2003 Census revealed a low growth rate of Omani population, the future sex-age structure of Omani population should be projected in the first place based on assumed future fertility rates. For expatriate population, the number of employed persons will be obtained first as supplement labor force for the total labor force demand depending on future economic growth. Total expatriate population will 6 - 1 be obtained applying assumed activity rates. Accordingly, future total population will vary depending on future economic growth. Table 6.1-1 Quantitative and Qualitative Indicators for Economic Diversification AAGR (%) Relative Shares to GDP Sector 1995- (%) Remarks 2020 1995 2000 2020 Oil -2.2 33.5 25.9 9.0 1. Crude Oil Extraction Rate Decrease from 850,000 bpd to 426,000 bpd in 2020 2. Oil Reserves Gradual depletion, despite the expected increase 5 billion barrels Gas 11.1 1.5 5.0 10.0 1. Natural Gas Reserves 16 trillion cubic feet, with expected discovery of additional reserves Agriculture 4.5 3.0 3.5 3.1 1. Increase of cultivated consistent with available water resources 2. Raising of productivity with modern techniques 3. Development of agro-industries Fisheries 5.6 1.1 1.0 2.0 1. Utilization of modern and high value added technologies 2. Development of necessary infrastructure, such as fishing ports Mining 10.8 0.6 0.6 2.0 1. Proven Reserves of Main Minerals a. Copper: Additional reserves of around 15 million tons b. Chromite: More than 100,000 tons c. Coal: More than 100 million tons d. Silica: Around 5.6 million tons Manufactur- 7.3 5.4 6.8 15.0 1. Expansion of the petrochemical industry, based on gas as a feed stock ing 2. Expansion of oil refining 3. Expansion of the production of agricultural, fisheries and mining sectors 4. Increase in the participation of foreign investment Electricity & 4.5 1.7 4.3 2.0 1. Promoting privatization in order to increase in productivity Water 2. Providing water to areas that are not yet supplied Const. & 3.2 6.9 10.0 1. Development of the country's infrastructure Real Estate Trade & 3.9 14.1 17.8 18.0 1. Expansion of non-oil production for the increase in trade exchange Tourism 2. Utilizing Oman's location for export, re-export and transit operations 3. Raising tourism's share of GDP from 0.8% in 1995 to 3% by 2020 Transport & 5.9 7.0 8.6 8.0 1. Upgrading the efficiency of existing ports and development of a new port Telecomm. 2. Expanding and upgrading the existing telecommunications network Finance 5.9 7.9 4.3 8.0 1. Meeting the increased funding needs and volume of savings resulting from the high growth of the national economy 2. Need to develop the export oriented services Private Serv. 5.0 8.3 3.2 5.0 1. High rates of growth based on the following factors: a. A large population increase, with an annual average growth rate of 3.7% b. An income increase, with a per capita income of RO3,000 by 2020 Public Serv. 1.1 13.9 12.6 10.0 1. Expected decline of the public services, resulting from the following: a. Achieving economic stabilization and rationalizing public expenditures b. Enhancing the role of the private sector c. Enhancing economic diversification d. Human resources development Custom D. & Imptd Serv. -1.2 -5.0 -2.1 GDP 3.3 100.0 100.0 100.0 Source: "Vision for Oman's Economy - Oman: 2020" For the future economic framework, future petroleum activities (crude oil and natural gas) should be projected in the first place. Then future non-petroleum activities will be forecast based on the assumed sectoral growth rates. Sectoral labor force demand (number of employed persons) will be obtained by applying sectoral labor productivity. Accordingly, future number of employed persons will vary depending on the assumed future labor productivity, even with the same economic growth. 6 - 2 3) Development Scenarios Three development scenarios are studied as follows: a. Higher Omanization Development (Optimistic Case) b. New Oman Vision Development (Strategic Case) c. Steady Economic Development (Pessimistic Case) Selecting one development scenario, future socioeconomic framework at the national level is fixed. 4) Future Gross Regional Domestic Product (GRDP) The future projected GDP by economic activity at the national level is broken down into the regional level. The base is an estimate for the year 2000 by utilizing various kinds of regional data obtained. 5) Future Socioeconomic Indices by Zone Available socioeconomic data for zone (Wilayat) are limited. Published data are only population and number of households based on the 1993 and 2003 Censuses. In addition by favor of Ministries, the Study Team obtained data about agriculture, fisheries and manufacturing at the Wilayat level. Utilizing these data, zonal indices are estimated first for 2000. Future zonal indices are estimated by considering distribution patterns in 2000, location of development projects and location industrial estates. 6.2 DEMOGRAPHIC FRAMEWORK 6.2.1 Revision of Population Growth Trend As described before, the 2003 Census showed a low growth trend of Omani population. Decline of fertility rate seems to be in progress at a faster pace than expected. According to the Ministry of Health (MOH), the changing trend of the total fertility rate (TFR), equivalent to the number of children born from one woman, is 6.87 in 1993, 5.99 in 1995, 4.74 in 2000, 4.19 in 2001 and 3.64 in 2002. However, the TFR might have already dropped to about 4.2 between 1995 and 2000, because an estimation of the change in sex-age structure of Omanis from 1995 to 2000 by applying the component method showed that the Age-Specific Fertility Rate (ASFR) 6 - 3 of 2001 fitted best. After various trials and errors, the population growth trend during ten years between 1993 and 2003 was estimated as shown in Table 6.2-1. For the expatriate population, no revision work was carried out. Table 6.2-1 Revision of Population Trend, 1993-2003 (in thousand) MONE Study Team Year Oma. Exp. Total Oma. Exp. Total 1993 1,465 535 2,000 1,465 535 2,000 Cens.1993 1,483 535 2,018 1,483 535 2,018 1994 1,512 538 2,050 1,498 538 2,036 1995 1,557 574 2,131 1,530 574 2,104 1996 1,602 612 2,214 1,563 612 2,175 1997 1,642 613 2,255 1,596 613 2,209 1998 1,685 602 2,287 1,629 602 2,231 1999 1,729 596 2,325 1,662 596 2,258 2000 1,778 624 2,402 1,693 624 2,317 2001 1,823 671 2,494 1,721 671 2,392 2002 1,872 712 2,584 1,749 712 2,461 2003 1,922 730 2,652 1,776 730 2,506 Cens.2003 1,779 552 2,331 1,779 552 2,331 Source: MONE (1993-1999), Statistical Yearbook MONE (2000-2003), Sixth Five Year Development Plan (2001-2005) 6.2.2 Future Omani Population Future projection of Omani population was carried out, by applying the component method. The reason is that it is necessary to estimate future labor force. Setting 2000 as the base year, populations by sex and age-group of 2005, 2010, 2015, 2020, 2025 and 2030 were forecast. For the estimation of future fertility rates, United Nations' population projections for Oman and neighboring countries were studied. Table 6.2-2 shows the changing trends of total fertility rates assumed by the UN population projections for Oman and neighboring countries (Medium Variant). And Figure 6.2-1 shows the future population of small-scale countries (excluding Saudi Arabia and Yemen with estimated populations of 20,346 thousand and 18,349 thousand in 2000, respectively). The UN projection assumes considerably high future TFRs for Oman. On the contrary, lower rates are assumed for Bahrain, Kuwait, Qatar and UAE, setting TFR of 2.10 (net reproduction rate of 1.01) in the near future.
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