Oman jumps 39 places on 2024 Economic Freedom Index, UAE ranks 22

The Sultanate of Oman made a significant leap in the 2024 Economic Freedom Index issued by the Heritage Foundation, jumping 39 places to reach 56th in the world, up from 95th in the previous year.

The index, published on Tuesday, assesses economic freedom in 184 countries based on rule of law, size of government, regulatory efficiency and open markets.

According to the 2024 index, Oman scored 62.9 out of a possible 100, elevating its economic classification from “mostly not free” to “moderately free.”

The sultanate ranked fifth out of 14 countries in the Middle East and North Africa region, preceded by the United Arab Emirates, which scored 71.1, Israel with 70.1, Qatar with 68.8 and Bahrain with 63.4.

The Emirates ranked 22nd globally in the 2024 index, while Israel secured 26th place, Qatar stood at 28th and Bahrain ranked 54th. 

“Oman’s economy is being modernized,” read the Heritage Foundation’s report. “The government has acted to diversify economic activity and stimulate more broadly based development. The evolving regulatory framework’s efficiency is improving, and tax rates are competitive.”

It went on, “Foreign investment is welcome in many sectors, although the approval process can be time-consuming.”

Oman’s progress can be attributed to several factors. In 2022, its public debt accounted for 41.2% of its gross domestic product, marking a significant decline from 2021’s 62.3%, according to CEIC Data.

Oman also recorded a budget surplus of 931 million Omani rials ($2.4 billion) for the financial year 2023, according to the Ministry of Finance. It is expected to deliver a surplus this year again. Fitch Ratings projects a 1.8% surplus in 2024.

As part of its Vision 2040 aimed at diversifying its oil-based economy and developing its human capital, among other goals, Oman is seeking to secure a place among the world’s top 40 economies. It has launched a series of economic policies and reforms to achieve its goal.

In 2020, the Omani Ministry of Finance introduced a medium-term fiscal plan to achieve sustainable fiscal balance by 2024.

In a June 2023 report, the Arab Gulf States Institute in Washington praised Oman’s sound economic policy-making and reform progress, but said more is needed to make Oman a regional economic hub.

“Oman is getting its economic house in order, creating a stronger fiscal position, establishing greater resilience to energy price volatility, and building a more attractive investment destination over the near term,” the report read.