DUBAI, United Arab Emirates — Oman plans to launch a $5 billion public investment fund to support plans to overhaul the economy in the Gulf Arab nation over the next two decades, state media reported today.

The Oman Future Fund will aim to increase economic activity and support the private sector as the country looks to reduce its reliance on oil. With a population of some 4.5 million, Oman is the second largest Gulf Arab nation after Saudi Arabia but has nowhere near its vast oil reserves.

Oman has long served as a regional mediator, maintaining close ties to the U.S. and other Gulf states as well as Iran. That has allowed it to facilitate prisoner exchanges and other tense negotiations.

State media said Sultan Haitham bin Tariq Al Said approved the new fund, which would launch with 2 million riyals, or around $5.2 billion. It would support the country’s Vision 2040 plans to grow and diversify the economy.

Oman, like other Gulf countries, already has a sovereign wealth fund that invests excess oil revenues in international real estate, businesses and other assets. The Oman Investment Authority was established in 2020 and incorporated an earlier fund dating back to 1980.