The country's water resources are a key to its economic future, and continued development will require much more water than has been available. Rainfall is so scant that crop production is impossible without irrigation. Livestock raising is restricted to areas having a dependable supply of drinking water for animals. Any substantial expansion of agricultural production will therefore require developing new water sources. Industrial expansion, increased tourism, and an improved standard of living combine to increase the requirements for water.

In the 1990s, water sources include wells for village water supplies, the falaj system, and desalination plants. Although the Muscat metropolitan area, Salalah, and Raysut are supplied with adequate water distribution and sewerage systems, such systems remain underdeveloped in many rural areas.

In 1969 Oman had only one electric power generating station, which produced one megawatt of electricity for the Muscat metropolitan area. Since then, electricity has been introduced in an increasing number of areas: Salahin in 1970; the island of Masirah in 1976; and Nazwah, As Sahm, and Ibri in 1978. In 1990 in the sultanate, 4,503 million kilowatt-hours were produced in comparison with 787 million kilowatt-hours in 1980. The Muscat metropolitan area represents 67.4 percent of the sultanate's electricity consumption, followed by the Al Batinah area at 14.7 percent and Dhofar at 9.4 percent. The government's diversification program and its plans to develop infrastructure across the country to balance economic development and to correct the regional disparities between the less developed south and interior and the more developed north require greater attention to water and power. Several large infrastructure projects are being considered in the Fourth Five-Year Development Plan: a new power station and grid network for the interior; improvement in Muscat's sewerage network; and construction of another desalination plant, which was completed by 1992. However, the water problem requires greater attention to the management of existing installations.

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Source: U.S. Library of Congress