Just over 40 years ago, while the first man was preparing to land on the moon, the gates of Oman's capital, Muscat, were still shut at night. The country had about six miles of paved roads and, it is said, 12 working telephones. Eyeglasses were banned. It would not be an exaggeration to describe the then ruler, Sultan Said bin Taimur, as having something of a difficult relationship with not only the modern world but also, eventually, his son, Qaboos bin Said, who, with the backing of those who wanted to use the new-found oil to modernise the country, ended up deposing him in a bloodless coup in 1970. Sultan Said spent the remaining years of his life in the Dorchester Hotel in London while Sultan Qaboos began the daunting task of taking his country into the 21st century.
Visit Muscat today and its recent past seems almost unimaginable - as remote as faded daguerreotypes of a vanished world. Instead of donkey trails leading into the capital, a sleek modern flyover curves through its surrounding hillside, but you still enter Muscat through a canyon of rock rather than the fantastic hyperreality of glass, steel and concrete that lines Dubai's Sheikh Zayed Road. Somehow the buildings along the motorway, even in the business district of Ruwi, blend into the surrounding hills - unobtrusive yet present. It's not an accident or a trick of the light, but a conscious choice from a government determined that the country, as it grows, maintains a sense of its own cultural and aesthetic identity. Oman has long been considered the most beautiful country in the Gulf and, because of its long isolation, also one of the most unspoilt (in fact it's become something of a cliché to use words such as "timeless" and "unspoilt" in the same sentence as Oman, but as anyone who's been there knows, it's also pretty much inevitable). It's still possible to look out over the Muscat harbour and not be able to determine which century, let alone decade, you are in. Yet we now live in age where such things as "unspoilt landscape" and "timeless beauty" have become a valuable commodity. Head down the coast towards the Sur or further inland towards the mountains and medieval towns such as Bahla with its eerie fort towering over the landscape, and you can see why, according to Hassan Shaban of National Bank of Oman, "The natural beauty of Oman is the core business for the future."
One of the main reasons behind this new direction is the diversification of the country's economy away from its petrochemical base. At the moment, crude oil makes up nearly half of Oman's GDP, but with reserves beginning to run out, the government plans to grow the country's economy so that crude oil ends up contributing to less than 10 per cent of GDP by 2020. In order to bring that about, the government is transforming the economy by: opening Oman to new businesses such as an aluminium plant in Sohar; building a huge industrial hub in the port of Duqm; setting up a free zone in Salalah; reforming the tax and ownerships laws to bring in foreign direct investment; allowing the partial privatising of state owned companies, introducing authentic competition into its telecommunications sector, and ploughing a significant proportion of its windfall oil revenues into developing the country's infrastructure. This year Dh7 billion ($1.9 billion) will be spent on the country's roads; about a billion more will go into ports and another Dh1,285 million ($350 million) on airports. All of this has led to a feeling in the country that Oman is now ready to open its doors to the rest of the world. Around 1.4 million visitors travelled to the country last year. In 2006, the tourism sector's value-added GDP increased from 59 million Omani rials (Dh564 million) in 2002 to 103.2 million rials (Dh986) in 2006. According to one of the country's leading businessmen, Maqbool Hameed al Saleh, "People were asking us in the Seventies and Eighties, 'Why aren't you allowing tourists to visit? Why are you making it difficult for them to get a visa?' and we said, 'Well, we're not ready'. We wanted to make sure that the infrastructure was built before we allowed people to come in. We didn't want them to come here when they couldn't find hotels, when there were no proper roads. Now our infrastructure is almost complete." However, Oman won't be encouraging any form of mass tourism. According to Wael Ahmed al Lawati, the head of Omran, a company set up by the government to develop the country's tourist infrastructure and facilities: "The idea is to target the upper segment. Oman's natural attributes lead us to develop high-end tourism - obviously with time you can reach a point of saturation of five star hotels so we will also contemplate four star properties, but the starting point is very much an upmarket destination." There is no question, though, as anyone who has tried to book a hotel room in Muscat during the high season knows, that the country needs more hotel rooms and Lawati says this is something that is being addressed. "The government looked at the current portfolio and basically we have just over 8,000 hotel rooms in the whole of Oman," Lawati says. "We plan to increase that. There are now licenses provided for up to 25,000 more rooms; although it's difficult to assess how many of them will actually see the light of day, I would imagine Muscat will be looking at 5,000 to 10,000 rooms over the next three to four years." Many of these new hotels will be located in a series of vast master plan residential and tourist developments that are currently being built throughout Oman. It's the next stage in the country's development and goes to the heart of the dilemma of how to grow a successful tourist industry while at the same time protecting the very reasons that made it so special in the first place. These master plan projects currently include ones from Muriya (a multibillion dollar venture between Omran and Orascom) that is turning the island of Al Sodah into an exclusive haven for the uber wealthy; a kilometre-long street in Muscat with shops, restaurants, cafes, offices and a hotel; a 9.5 million square metre project near Salalah consisting of five hotels, 550 villas, 600 apartments, a town centre, a marina and a golf course, and Jebel Sifah, a development some 45 kilometres outside of Muscat that will also have a marina, four hotels, 450 villas, 500 apartments, a town centre and a golf course. Muriya's plans might seem ambitious but they are nothing compared to Madina A'Zarqa, another coastal development an hour's drive from Muscat which, if it achieves its stated goals, will become the country's second largest city with 200,000 inhabitants, schools, universities, medical centres, hotels, a tourist village, golf courses and a wide range of businesses. The project's chairman, Anees Issa al Zadjali, is upbeat about the future. Talking on the roof of a hotel overlooking the site, he paints a picture of the final city: "We're creating an economy here. We're going to create a lot of jobs in the hotels. We're expecting to build about 20 hotels here. We are looking at universities and colleges with more than 5,000 students. We will have hospitals specialising in different diseases ? and then we are looking at other projects that will generate employment, such as amusement parks, shopping centres and cinemas, everything." As you follow his gaze, you can't help but notice that, as yet, none of this exists, although there is a great deal of work being carried out constructing the accommodation for the workers who will build the project, accommodation which was recently described in an article in the Financial Times as "Good-quality housing - a rarity in the booming Gulf - for up to 7,000 construction workers ? with space for an extra 2,000 under way as the developer boosts the level of its workforce to speed up the construction process." There are, though, some doubters who think the labourers will not be staying long in their new homes. Critics question the long term viability of the project. There has been a series of negative stories that question ownership, financing and sales. However, Richard Russell, the new CEO, makes says the project is still on track: "The interest in the project is huge, both locally and internationally. We have a number of investors that have approached us for investments in the future and I don't know if you are aware of this but we had fantastic initial sales, with the first 400 units sold out in about four days? My role in the project is to deliver phase one, and with regards to phase one, all the financing is already in place. I know from my experience with the board and others that there is a huge interest in the remaining phase of the project, so I don't really foresee any problem with finding partners or finding financing for the remaining phases of the project." One project that will see its first customers take possession of their new houses in late September is The Wave, a 2.5 million square metre canal and waterfront development stretching along six kilometres of beachfront which, when finished, will consist of 4,000 residences with a marina, five star hotels and the by now obligatory golf course - this one designed by Greg Norman. The Wave was the first in this new series of developments, but the CEO Nick Smith points out that getting permission for the project was a relatively straightforward process. "Doors were easily opened here," he says. "From the very top, there was the direction to get on with it and create some really world-class facilities ? It's in the Sultan's plans for a serious expansion over the next 20 to 30 years so, as a developer, the land is made available and you can get your zoning. There is every opportunity, particularly in a country that hasn't really had any kind of major development here before." So far, properties in The Wave have sold well. According to Smith, "We've sold 872 properties out of our eventual 4,000 - that's proper sales, exchanged contracts, 10 per cent down. During our last sale, we sold 200 properties in just under a day and we had a queue of people for a week." Anyone who lived in Dubai when the first wave of housing developments came onto the market will remember investors queuing for days on end, desperate to get onto Dubai's property ladder. Many made small fortunes but that fervid burst of desire, which sometimes ended up in scuffles as people jostled for position in the queues, is not yet in evidence in Oman - nor is it likely happen. Oman has no plans to concrete over large swathes of desert or build islands (with over a thousand kilometres of coastline available for development it doesn't need to). But among Omanis, there is some disquiet about the impact the mega developments will have on the country. They don't want to find themselves lost in a version of a new Oman. According to Hassan Shaban, the government is making sure this won't happen: "One good thing about the government is that they have made their voice very clear, that investors should respect the local flavour and culture of the country. We're glad to see that when people come to Oman, thinking to invest, one of the first things they say is that they will protect the social and local culture." And the government is making sure that all the new projects will be in keeping with Oman's traditional architecture. Nick Smith says The Wave had to keep to very strict guidelines. "We are only allowed to build up to six stories," Smith says. "That's the maximum height we're allowed to build above ground level and only 25 per cent of our properties can be of a six story height - the rest have to be four stories or lower. So this will not be Dubai or Abu Dhabi or, indeed, many other cities in the world. This will be Omani culture. The design of the properties can be a modern Arabic Omani style but it won't be modern glass towers. There won't be that. That's what's written into the terms of our development agreement and all of the other developments are the same. That's not to say they'll all look the same because you can interpret the guidelines in different ways, but the idea of the developments fulfilling and reflecting the culture of the country is absolutely inbred and I have been advised by government that that's what they want Oman to be like." It's a policy designed to ensure Oman does not harm its selling point as a place that offers a distinctive natural beauty - that elusive quality much in demand from jaded, well heeled tourists of "authenticity". York Brandes, the general manager of the luxury Chedi hotel says, "I think it's very, very important to keep to Oman's traditions and culture. What's the point going to an Arab country if you don't see any locals or any local heritage? For me, that's what I want to see. I want to see the local population and eat the local food because otherwise I might as well stay at home." Brandes also says the government is making sure there's no danger of overdevelopment. "As far as I know, what has already been approved will take place but at the moment there has been a stop to the developments, which I think is very clever, because the Sultan wants to see what the outcome is when everything has been developed, to find out what the reaction is and then continue or perhaps stop." So there seems little chance that Oman will end up looking like Dubai or Abu Dhabi - but that's exactly the point. Oman's recorded history stretches back thousands of years. Its merchants sailed the trade routes between Arabia, India and Africa. It had an empire that stretched as far south as Zanzibar and has been independent since the 17th century. It's used to doing things its own way and believes the world is going to take notice. As Zadjali says, "We're going to build the ninth wonder in the world. Students are going to do their PhDs on it. We're going to create something with an Omani architecture from the Omani character. It'll be something unique that will attract people from all over the world."