MUSCAT: Fearing that oil reserves may one day fail to support its economy and growing population, the Gulf sultanate of Oman is investing billions of dollars in a massive tourist resort near the Arabian sea coast. On Saturday, Oman’s quest to draw tourists was unveiled in plans to construct “The Blue City” (Al-Madina Al-Zarqa), an ambitious 15-billion-dollar tourism project inspired by the success of large-scale building in neighbouring Dubai.

“The priority for the government is to diversify the economy and create new jobs,” Oman’s finance minister Ahmad Bin Abdl Nabi Mekki told the Times of Oman, a local English newspaper.

Ruled by sultan, the Muslim country is perched on the eastern edge of the Arabian peninsula, bordered by Saudi Arabia, Yemen and the UAE.

Characterized by hundreds of kilometres of beaches, stunning natural scenery, rugged mountains and baking deserts, Oman saw its fledgling tourist industry take a hard blow after the September 11, 2001 terror attacks on the United States.

In 2002, tourism accounted for about 13 per cent of Oman’s gross domestic product (GDP), compared with oil at about 43 per cent.

Tourism officials hope “The Blue City” will boost the tourist sector and diversify revenue sources over the long term.

The project will cover a 35-square-kilometre site along the Al-Sawadi seafront, 100 kilometres northwest of the capital.

Promoters say it will be a “real city” housing some 200,000 people, ideal for a country facing a growth spurt in its population. More than half of Oman’s 2.54 million people are under age 20.

Construction on “The Blue City” is to begin by the end of 2005 and last for 15 years.

The plan follows in the footsteps of a construction-frenzy in nearby Dubai, where developers are building what they call “the world’s biggest waterfront development.”

“Dubai Waterfront” is touted as an 81-million-square-metre beachfront landmark that will be larger than Manhattan, Dubai property developers say.

Until recently, Oman has avoided Dubai’s mass tourism pitch, targeting instead middle and high-class tourists to try to better stimulate the economy and not offend local sensitivities.

But Oman’s oil reserves are gradually being depleted.

In recent years, Oman has reaped the benefits of surging world crude prices. Its receipts for 2004 were 78 per cent higher than forecasted.

According to the Times of Oman, the sultanate produces currently some 767,000 barrels per day (bpd), compared to 819,000 bpd in 2003, and 898,000 bpd in 2002.

Although the project appears to be purely private, run by a Bahraini-Omani joint-venture, the Omani government helped significantly by obtaining a royal decree granting the developers a 75-year concession to utilise the land.

The government appeared willing to help the private sector in developing infrastructure for tourism because officials hope the massive complex will create tens of thousands of jobs.

But in a region where certain countries, like the emirate of Dubai, bet strongly on modernization and Westernization, Oman opted instead to emphasize the appeal of “authentic Arabia,” and remain faithful to its culture and traditions as it tries to attract visitors.—AFP