Laila al-Nudbi's eyes smile through her veil. It's a very soft sell. 'This is the best, sir. This is finest quality, sir. This will make you smell better. Life will also taste better.' The eyes laugh again, her hands holding out a small pile of semi-opaque pebbles. An incense burner and a cup of aromatic khawa smokes on the counter beside her. Shopkeeper Nudbi's job is supplying luxury incense, perfumes and essential oils. Wearing her black abaya overdress, she works every day at Abu Mohd, in the Al-Husu market in Salalah, at the southernmost tip of the Sultanate of Oman. Like nearly everyone else in the market, Nudbi stocks oblong frankincense tears, which are precious and necessary commodities on the Arabian peninsula. The busy market, in narrow, sandy alleys amid the town's coconut groves, is full of 'well-priced' gold and silver, turbans, kummah caps, sandals, copper coffee pots, ceremonial daggers and tailors' shops offering fittings for gentlemen's robes, women's thobes and traditional velvet dishdashas (a long, shirt-like garment). But the shops with the baskets, jars and polythene bags of frankincense tears are the most common. Frankincense is good for business. Slabs of the stuff are on everyone's shopping list, whether local or tourist. The Dhofar region is 90 minutes by plane, or 12 hours and 1,000km by road, from Oman's capital, Muscat. Although there is also a long tradition of fishing and dhow-building here, the area has been known for centuries for its production of frankincense. The 'frankincense trail', a 30km-long, 20km-wide coastal belt plus the mountains close to the Yemeni border, receives the khareef, or monsoon, from June to September. Mist blankets the region in an impenetrable 'pea-souper' fog, creating perfect conditions for growing frankincense trees. For four months, Dhofar becomes the coldest place in the Arabic world ... and then becomes the greenest. In the ancient frankincense valley of Wadi Dayqah, 50km from Salalah, guide Naser Sulaiman al-Mani demonstrates that he knows his stuff. 'Everyone gets a frankincense lesson when they come to Salalah,' he says. 'One tree grows to no more than five metres. Its roots grow four metres down into wadis, or water crossings,' he says. 'It takes only 14 months for a tree to become mature and a good tree can produce up to 10kg of frankincense a year for up to 30 years.' Frankincense, or olibanum, is a gum resin obtained from certain species of Boswellia tree. The trees are found in central India and the Coromandel Coast in southeast India, as well as in Ethiopia. But the Boswellia carterii grows only in Somalia, in east Africa, around Hadramaut in Yemen and in Dhofar. It is believed to produce the best frankincense, which, despite its exotic biblical associations and starring role as one of the three original Christmas gifts, is bought to fumigate houses and clothes. The habit of perfuming your house is a way of Arabian life; passing around an incense burner is considered a mark of respect and hospitality and the type of frankincense you use can be seen as a status symbol, or at least a symbol of sophistication. In Oman, frankincense is also chewed to relieve indigestion and freshen the mouth. Public places have huge frankincense censers. Hundreds of years ago, the precious cargo was packed into goat- and sheepskin carriers and exported from the former capital, Mirbat, and Salalah to China, Egypt and even India. A museum dedicated to the frankincense trade pioneers is soon to open on the site of the historic harbour in Salalah. But Oman is not all about frankincense. The country is modernising and expanding. In Muscat, the Ibadi Islam muezzins compete through megaphones from their minarets with charter jets and construction work. Paintings of Sultan Qaboos bin Said al-Said stand alongside billboards bearing corporate logos. The souks are competing with spas and wellness centres. Date cultivation has given way to investment cultivation. Investor appetites are being stimulated. Traditional arts and crafts are being overwhelmed by the modern sciences of engineering, public relations, hotel keeping and catering. The country even has a so-called six-star hotel, Shangri-La's Barr al-Jissah Resort and Spa, which opened recently. The second-largest country in the Middle East, Oman is thought to have been home to the ancient civilisation of Majan. The history of the sultanate can be traced as far back as 12,000BC. In the third century BC, Oman had the biggest and most powerful naval fleet in the world. The Portuguese left in 1650 and Imam Ahmed bin Said, founder of the present dynasty, expelled the Persians in 1741. After 1861, close ties were established with Britain and Oman became the most powerful state in Arabia. In 1970, the current sultan claimed the throne and began a programme of development that may see Oman become the new United Arab Emirates; Muscat the new Dubai. But Salalah, down south, is ancient Oman and the fast-developing country's last link to an illustrious, affluent past. 'It is a unique and fascinating place,' Sulaiman says as he drives through coconut groves and papaya plantations, past tropical fruit on sale in roadside shacks with camels strolling by. 'People come down from Muscat to dance, literally, in the streets. The area is so lush and verdant,' he says. And it's only two hours over the mountains from the Empty Quarter, the Rub al-Khali, or desert. Explorer Sir William Thesiger set out from Salalah to discover the lost city of Ubar, 'the Atlantis of the sands'. The city museum has a permanent exhibition of his photographs. Southern Oman is still a place of old cities and old ways of life. Up in the Jebel foothills, in Jable Ittin, lies the tomb of Job (Nabi Ayoub), who is mentioned in both the Koran and the Bible. The Queen of Sheba's palace was at Khor Ruri, near Samhuram, which was a famous frankincense port located between two creeks. The Dhofar region is also the final resting place of Nabi Imran, the father of the Virgin Mary, and the prophet Emran, the father of Moses. And if you overdose on history, there are many other things to see in and around Salalah, including the world's second-largest blowhole, at Tawi Attair, ninth-century capital Mirbat and the botanical gardens at Ayn Razat, which are watered by underground springs. Perhaps one of the most curious sights is that of tribesmen selling guns outside one of the city's banks in the middle of town. The guns are bought by collectors and the salesmen display their wares outside the bank so that they can obtain change easily. This part of the country has become a magnet for big-game fishermen, thanks to waters rich in black and blue marlin. Diving is also increasingly popular and for that you can take the word of al-Mahrooqy, whose boat is based in Salalah: 'The best dive sites to the west are Mughsayl, Raysoot and Dhalkoot. To the east we have Hasik and the Hallaniyat. You will see every kind of creature in the sea ... except other divers.' Beckoning land-based naturalists is the long day drive to the Arabian oryx (a kind of antelope) sanctuary on the Jiddat al-Harasis plateau, near Haima. This huge protected desert area is not home to just one of only two herds of wild oryx, but also to Nubian ibex, Arabian wolves, honey badgers and Arabian gazelle. 'Frankincense is a reminder of the past and in the souks of Salalah, you can see past, present and future,' Sulaiman says proudly. 'But southern Oman is natural Oman. It is still much like it was. Muscat is changing itself; Salalah will never change.' Getting there: Cathay Pacific ( www.cathaypacific.com ) and Thai Airways ( www.thaiair.com.hk ) fly to Muscat via Bangkok and Dubai, respectively, with connecting flights on Gulf Air ( www.gulfairco.com ).