Oman walks domestic and regional tightrope

Published in MEED, 21 March 2018

Rare public protests broke out in the capital Muscat and a number of other towns and cities, including Salalah and Sur, in late January, as young Omanis expressed their frustration with the difficulty of finding a job. Unemployment continues to be one of the country’s greatest economic challenges, and one of its biggest political headaches too.

The government does not have the resources to be able to offer public sector jobs for everyone that emerges from school or university these days, but the private sector has proven unwilling or unable to pick up the slack. The authorities have been trying to force the pace, responding to the latest protests by placing a six-month ban on local companies employing any more expatriate staff in several hundred different jobs categories.

However, it has tried similar moves in the past without notable success, so there are limited expectations as to the impact the latest measures will have. There have also already been some negative consequences, with local media reporting that landlords are complaining that falling rental prices are due – in part at least – to the lower number of expats coming into the country.

One area that has seen some progress over recent months is Oman’s regional trade relations. Since the introduction by Bahrain, Egypt, Saudi Arabia and the UAE of an embargo on transport and trade with Qatar in June last year, Doha has increased its trade and investment in the sultanate, where it continues to receive a warm welcome. While noting that “people generally are concerned about what is happening in the region,” one local businessman in Muscat says: “It is encouraging that Qatari investors see Oman as a second regional hub. The situation has opened up opportunities for Omanis, with the possibility of more trade between Qatar and Oman than before.”

The ability of Oman to exploit the opportunities thrown up by the Qatar crisis, while still maintaining friendly relations with Riyadh, Abu Dhabi and others, is directly tied to Sultan Qaboos bin Said al-Said’s ability to tread an independent path – something he has consistently done since coming to power in 1970 after ousting his father. This ability to maintain friendly relations with all of its neighbours to everyone’s mutual benefit is a rare talent in the region, and one that has stood the country in good stead.

“Oman’s approach to external affairs hasn’t changed,” says one long-term expat in Muscat. “They remain open and friendly with all neighbouring countries and all countries generally. Their approach has always been very diplomatic and helpful.”

Muscat has also been able to draw investment and interest from Iran. The Islamic republic has identified Oman’s Duqm port as a useful staging post for its international trade, and Tehran and Muscat are also continuing to pursue plans for a natural gas pipeline that will run from Iran to the sultanate, and from there on to India.

Muscat has also been showing a greater willingness to act as a mediator in the Yemen war of late. It has helped secure the release of many hostages over the past three years of fighting and, although Kuwait has been making the running in terms of regional diplomacy, Oman has also been willing to provide a useful neutral venue for those on both sides of the war.

In January, for example, senior Houthi negotiator Mohammed Abdel-Salam was reported to have accompanied US citizen Danny Lavon Burch to Muscat following his release by the rebel group. Abdel-Salam is said to have held talks with a number of Western diplomats while in the Omani capital. During the same month, Saudi Interior Minister Prince Abdelaziz bin Saud bin Naif al-Saud travelled to Oman, where he held talks with deputy prime minister Fahd bin Mahmoud al-Said among others.

There are questions as to how much longer Oman can remain above the regional fray though. Sultan Qaboos is 77 years old and has had extensive medical treatment over the past few years for what is reported to be cancer. His public appearances have become rare and there is plenty of speculation in Muscat about his health, and potential successors in what is a peculiarly opaque succession process.

Keen-eyed observers suggest that the most likely successor is one of a trio of the sultan’s second cousins. Of these, Assad bin Tariq bin Taimur is generally seen as the front-runner, ahead of his brothers Haytham and Shihab, although some also point to Assad’s son Taimur as another potential ruler.

The critical question for whoever does eventually take over is whether they will be able to maintain the course adopted by Qaboos over the past several decades. It will not be an easy task, but it may be critical for Oman and the wider region that they at least try. Along with Kuwait, Oman is one of the few countries seen as a reliable mediator by all the significant players – and that, given the extent of the political tensions in the Gulf these days, is an important position to hold.