Sector Creation as National Strategy: Lessons from Oman's Vision 2040

What distinguishes serious national development programmes from the performative ones is rarely found in the scale of announcements or the size of the capital commitments. It is found in the sequencing. In the way a government moves from aspiration to allocation to execution, and in whether the institutional architecture can sustain momentum across political cycles and commodity price swings.

The sequencing principle

Oman's Vision 2040 is, by this measure, one of the more carefully constructed economic transformation frameworks in the Gulf. It does not attempt to do everything at once. What it does, with a discipline that is often underappreciated by external observers, is build new sectors methodically. From regulatory foundation through land allocation, infrastructure investment, anchor project attraction, and institutional capital deployment.

Hydrogen as a method, not just a target

The green hydrogen programme is the most visible example. Through Hydrom, the state's dedicated hydrogen orchestration entity, Oman has awarded eight large-scale projects across two auction rounds, securing over $49 billion in investment commitments. The combined target is one million tonnes of green hydrogen annually by 2030. A third auction round launched in April 2025 for additional land blocks in Duqm. The ACME project, Oman's first large-scale hydrogen development, is now under construction, targeting 100,000 tonnes of green ammonia by 2027.

What makes this instructive is not the tonnage figures. It is the method. Hydrom does not simply invite bids. It defines land blocks, structures concession terms, establishes infrastructure-sharing arrangements, negotiates fiscal incentives, and coordinates across regulatory bodies. The $3.6 billion incentive package approved in 2025, which includes phased land fee reductions and royalty adjustments, was designed not as a subsidy but as a structured de-risking mechanism calibrated to the capital expenditure profile of early-stage hydrogen projects.

This is sector creation in its most precise form. The government does not build the industry. It builds the conditions in which the industry can be built by others.

Beyond hydrogen

The approach extends well beyond hydrogen. Oman's mining sector, historically marginal, is being repositioned as a strategic pillar. New projects in limestone, gypsum, dolomite, silica sand, and copper exploration are advancing across the Al Wusta and Dhofar governorates. The Duqm Special Economic Zone, anchored by a $1.2 billion MIGA-backed infrastructure programme, is being developed as an integrated industrial and logistics hub linking the Sultanate to East African and South Asian trade corridors. A 238-kilometre rail link between Abu Dhabi and Sohar, developed through the Hafeet Railway joint venture, connects Omani logistics capacity to the wider Gulf network.

Tourism, aquaculture, and food security are being developed in parallel. The Yiti Sustainable City project, the Muttrah cable car expected to be operational in early 2026, and aquaculture investments targeting 4,600 tonnes of annual production represent smaller interventions. But they follow the same logic. Identify a sector with structural demand. Establish the enabling infrastructure. Attract the anchor investment. Then allow the ecosystem to compound.

Three characteristics of serious programmes

For investors and advisors working across emerging markets, the lesson is not about hydrogen or mining specifically. It is about the architecture of sector creation. The most successful programmes tend to share three characteristics. First, a dedicated institutional vehicle with a clear mandate, not a ministry directorate, but a purpose-built entity with authority to negotiate, allocate, and execute. Second, a phased approach that sequences policy, infrastructure, and capital attraction rather than attempting all three at once. Third, and perhaps most importantly, the discipline to conclude projects that do not meet market conditions, as Oman did when two hydrogen developments were terminated by mutual agreement after developers reassessed commercial viability.

That last point is worth pausing on. In many emerging markets, the political cost of admitting that a flagship project has not worked out can be prohibitive. Contracts are extended, timelines are pushed, and capital remains committed to projects that have already lost their commercial rationale. Oman's approach of allowing a clean exit signals something important to the market. It means the next auction round attracts stronger bidders, because developers trust the framework and believe it will be applied consistently.

The trajectory

Oman's economy continues to evolve. Non-oil activities have expanded meaningfully, with the hydrocarbon sector's share of GDP falling from 37 per cent in the early 2010s to roughly 30 per cent by late 2024. Manufacturing is the fastest growing sector, recording 8.3 per cent growth. The trajectory is clear, even if the destination is still some years away.

For governments across Africa, Central Asia, and Latin America seeking to build new industries from limited starting positions, the Omani model offers a practical framework. Not because it is perfect, but because it is honest about what sector creation actually requires. Patience, institutional discipline, and the willingness to let the architecture do the work.