Planning & Development  

Regional Development And Regional Distribution of Investment» Introduction

The particular characteristics of the Sultanate make the regional presentation and regional development method an inevitable necessity for the achievement of the objectives of development and progress in the Sultanate. The area of the Sultanate is about 309.5 thousand square kilometres located in the extreme south east corner of the Arabian Peninsula. It is the second largest country in the Arabian Peninsula Region The costs extend 1,700 kilometres along the Gulf of Oman and the Arabian Sea.

The nature and topography of the country varies from region to region. Fallow uncultivated land dominated by sea inlets can be found in the regions that open onto the Straits of Hormuz and Musandam governorate in the north. There is the fertile Al Batinah plain in the north west of Muscat the remote Empty quarter in the west and the semi equatorial green plain of Salalah in the south.

This geographical and environmental diversity means that the development pattern in the Sultanate needs special characteristics. The most prominent of these are the regional considerations the necessity of utilizing the diversity resources and the use of environmental differences for the benefit of the development process.

The population distribution in the country reflects the environmental and geographical diversification and variation. Since the primary aim to development is the improvement in the life of the people, it follows that regional development is fundamental to the all aspects of the development programme.

During the first three development plans, the need was for the establishment of a modern state and the completion of the basic elements of this. This and the rapid economic and social progress achieved led to the concentration of a large number of government investments in the governorates of Muscat & Salalah. In addition a number of major projects of a global nature were implemented in the governorates of Muscat although their impact extended all over the country. Since its formulation the fourth five-year plan has followed the regional course as a basic dimension in development planning. It adopted this as a main criterion for the distribution of investments among the regions. The direction of the fourth five-year plan depended on attaching special importance to regional planning in the development strategy decided on in 1975. One of the fundamental bases of that strategy was to reduce the variation in the living standards between the different regions, together giving priority to the less developed regions. This direction also depended on the fact that the basic infrastructure and most of the economic and social facilities considered to be per-requisite for the take-off were competed.

The government of His Majesty the Sultan considers regional development as one the basic dimensions of the future vision. Included in this is the enhancement of the standard of living of the citizen the reduction of regional differences the elimination of wage differentials and the provision that all citizens will benefit from the fruits of the development process. In harmony with this the plan approaches the provision and distribution of the health and educational services projects in a way which conforms to the above objective. In general the distribution of allocations for the new projects has depended on the same objective base and criteria for the regional distribution of those investment allocations as those followed in the fourth five-year plan. The mo important of these bases and criteria include the following:

1. The regional weight of the population numbers in each area.

2. The relative weight of the geographic area for each region.

3. The regional balance of the per capita share in the development expenditure index.

4. The absorption capacity of the region and its development capabilities.

The regionally balanced distribution of public investments through the specification of a ratio for each region was firmly established as part of the public policy of the State. This policy enhanced regional development during the previous phase which was characterised by its extensive dependence on government investment programmes. This plan emphasises the importance of the private sector with regard to balanced regional development. The most important policies adopted by the plan in this respect clued the following:

• establishing industrial areas at Khasab and Al Burimi

• providing soft loans with favourable terms for the areas outside Muscat.

The following table illustrates the regional distribution of the civil ministries investments. This is expected to improve in the Fifth Five Year Plan compared to the Fourth Five Year Plan. The relative share of distribution of the civil ministries investments to other areas outside the governorate of Muscat will increase in the fifth five-year plan to 81.6% compared to about 72.3% in the fourth five-year plan. This increase in the relative share of regions outside the governorate of Muscat conform fully with the new development directions regarding the reduction of the variations between the different governorates and regions.

In this new development phase investments are moving primarily towards the commodity and service production sectors. The private sector has assumed the role f the most important investor. It has become important to deal with the regional dimension of the plan from a broader perspective which is not restricted to the regional distribution of the civil ministries investment programmes alone. The perspective should encompass the investment programme of the plan as a whole whether public or private.

The location of the large investment projects that were adopted in the plan and those that were under study during its preparation was based on the requirements and terms of regionally balanced development. The liquefied natural gas project and the chemical fertilizers project were based in Sur a wilayat of Sharquia region. The aluminium smelter project and the poly olefin will both be based at Sohar a wilayat of Al Batinah region. The Raysut development project will be implemented in the governorate of Dhofar and a new port will be established in the Al Batinah region.

It is hoped that this regional distribution of the large projects will have a positive effect on the regional distribution of other private sector investments in the plan.

The division of the Sultanate from the planning point of view s based on its administrative division which was ratified in accordance with the Royal Defence no. 6/91. This divided the country into 8 administrative regions: Muscat governorate, Al Batinah region, Musandam governorate, Ad Dhaira region, Ad Dakhilyah region Ash Sharqiyah region, Al Wusta region and Dhofar governorate. Each governorate or region was divided into wilayats. One or two regional centres were determined for each governorate and region.

The process of the distribution of the investments allocated for the civil ministries and the different executive units in the fifth five-year plan has resulted in a pattern of regional distribution for these investments as shown in the following table.

Structure of regional distribution of new projects

of civil Ministries in the fifth five-year plan

The above table shows that the ratio of the share of national projects in the investments of the different civil ministries and executive units in the fifth five-year plan will increase to about 43.9%. This is a marked increase when compared to the 26.4% ratio in these investments in the fourth five-year plan.

The marked increase in the ratio of projects of a national nature is attributed to the inclusion f about OR. 44 million of the development reserve allocations of electricity and water sectors. In addition about OR. 182 million of the human resources development allocations were allocated to projects of a national nature.