Oman's fishery sector has a considerable, if largely unquantified, potential to harvest both demersal and pelagic species. To date, the Government of Oman has focused on coastal fisheries, disbursing $10.5 million over the past 10 years through the Fishermen's Encouragement Fund (FEF) to subsidize the purchase of fishing skiffs with outboard motors. This fleet of small vessels accounts for 55% of the national fishing fleet and 70% of the annual catch. A private sector fish processing and export business has begun to evolve, assisted by a government program to install small refrigeration facilities along the coast. The only commercial fishing effort in Oman, except for eight foreign-owned trawlers, is the operation of the traditional wooden-hulled dhows used mainly for gill net operations. The previously substantial catch by the dhow fisheries has dwindled due to lack of crews: the FEF subsidy makes it attractive for dhow crews to operate their own boats in coastal waters; coastal youth are not attracted to fishing as a career; and government policy forbids dhow owners from recruiting foreigners. The main constraint to exploiting Oman's rich marine resources is lack of appropriate government action. The Government of Oman's plans to develop offshore fishing involve the creation of a largely vertically integrated company with an exclusive mandate for offshore fishing. Private processors and exporters are uniformly opposed to this plan and hope the government will instead make efforts, in this sector as it has in others, to develop private sector potential. (Author abstract, modified).