Oman - COUNTRY PROFILE
Geography
Capping the eastern end of the Arabian Peninsula, Oman's total land area is estimated to be 212,460 sq km. Valleys and desert account for approximately 82% of the land, mountain ranges 15%, and the coastal plain 3%.
Flanked by the Gulf of Oman, the Arabian Sea, and the Rub al-Khali (Empty Quarter) of Saudi Arabia, the country has traditionally been quite isolated. Contact with the rest of the world was by sea, providing access to foreign lands and linking the coastal towns of Oman. The Rub al-Khali forms a barrier between the Sultanate of Oman and the Arabian interior. The al-Hajar Mountains, which run between the coast and the desert from the Musandam Peninsula (Ras Musandam) to the city of Sur at Oman's easternmost point, form another barrier. These natural features divide the country into seven distinct areas.
The northernmost area, Ruus al-Jibal, extends from the Musandam Peninsula to the United Arab Emirates (UAE) border and is separated from the rest of the sultanate by a strip of territory belonging to the UAE. Also, two mountain ranges called the al-Hajar al-Gharbi Mountains and the al-Hajar al-Sharqi Mountains are located inland. The two ranges are divided by a valley that forms the traditional route between Muscat and the interior.
With the exception of the Dhofar region, which has a mild monsoon climate and is cooled by winds from the Indian Ocean, the climate of Oman is extremely hot and dry most of the year. The highest temperatures are registered inland, where readings of more than 50 C in the shade are common.
Recent History
Oman's position, on one of the most important trade routes of the ancient world, has endowed it with a rich and varied history of invasion and economic fortune. The Arabs of Oman were prominent among the early converts to Islam. According to history, the Prophet Muhammad sent one of his military leaders to Oman to convert the Persian Garrison, who were Zoroastrian, and the local Arab inhabitants, who were Christian. The Persians rejected Islam whereas the Arabs embraced it, going on to expel the Persians from Oman.
For much of the 10th century the followers of Qarmat were the most powerful force in the Gulf, controlling much of Oman's coast. Eventually, though, they succumbed to the ambitions of strong leaders in Mesopotamia or Persia and the incursion of tribes from the interior.
The geography of the country and its strategic importance has traditionally led Oman to acquire a dual nature. While foreigners like the Qarmatians normally controlled the coast, the interior was usually controlled by the Ibadi, an early Shia sect. The result is a traditional difference in attitude towards foreigners between the interior and the coastal areas. Coastal Omanis, who long enjoyed the profits of foreign trade, never harboured the same level of hostility towards outsiders as the tightly knit Ibadi communities of the interior did.
Buyids, Zangids and Safavids have all come and gone as their power and trading activity in the Gulf rose and fell. By the end of the 15th century, the profitable coastal areas were under Persian rule again and remained so until the arrival of Europeans in the 16th century.
The Portuguese were the first Europeans to arrive. They captured several coastal cities in the Gulf, with the Iranian shah of the time co-opting the British and French to help stay the Portuguese threat. As a result of Britain's success in getting rid of the Portuguese for the Iranians, Britain became the major power in the Gulf by the beginning of the 19th century. The result of these struggles along the coast of Oman provided the opportunity for the Ibadi to take control of the coast for the first time in a thousand years.
This opened a chapter of history that saw Oman prosper under indigenous rule. The Omanis extended their influence into the interior, into what is now the UAE and the Muslim cities of East Africa that had been established by Omani traders in the 10th and 11th centuries. Zanzibar was an Omani stronghold during this time.
In a bid to control piracy on their principal shipping route from India, the British made treaties with coastal nations in the Gulf. Oman, however, was never party to such an agreement, yet the British were very involved in the country's activities. For the following century the difference between the coastal region and the interior grew as the capital moved to the coast. The discovery of oil in the region was a tremendous boon as the country had been in gradual economic deterioration. However, this resource did not come online until 1967.
Part of the delay in accessing Omani oil stocks was the dispute between the tribes of the interior and the sultan. It was also that other Gulf states at the time were able to provide sufficient oil and the exploration companies only came to the Sultanate relatively late – internal turmoil was obviously a factor in this too. The sultan asked the British government for aid, which it provided, hoping that the sultan would pacify the area and ensure Western access to Omani oil. The sultan was initially successful in this, although his control over the interior slipped again in 1964 when another rebellion arose. Known as the Dhofar rebellion, this obliged the sultan to seek foreign military assistance. As a result, British forces resumed action in the country, this time aided by the Iranians. However, sick of the sultan's policies on the issue, in 1970 a group of Omani military and civilian forces forced the sultan to abdicate and crowned his son, Qaboos bin Said al-Said. By 1976 the new sultan had quelled the rebellion with regional international support.
Government and Politics
Major Political Players
Sultan Qaboos bin Said al-Said: Head of state, commander-in-chief of the armed forces. Coming to power in 1970 following a bloodless coup, the Sultan continues to lead the country. Decision-making is centrally focused in his hands. There is no prime minister and the Sultan also manages a number of ministerial portfolios.
Ali Majid al-Maamari : Minister of the Royal Office and head of the defence council. His portfolio includes the oversight of internal security matters; he is also a powerful behind-the-scenes player. He is tipped to fill a decisive role in ensuring a seamless succession process.
Yusef bin Alawi bin Abdullah: Minister responsible for foreign affairs. Despite the sultan officially holding this portfolio, Abdullah has managed routine operations and policy for over a decade.
Sayyid Asad bin Tariq al-Said: Special representative for the sultan. A former brigadier-general in the army, Sayyid Asad is a possible successor to the sultan. His position is mainly ceremonial, with duties including the personal delivery of messages on behalf of the sultan.
Sayyid Haithem bin Tariq al-Said: Minister of Heritage and Culture. As a first cousin of the sultan, Sayyid Haithem is also a prospective successor to the Sultan. He joined the cabinet in 2002, but doubts are held as to how effectively he can build a power base in this role.
The Sultan decreed the modern Omani state's first constitution, or Basic Law, in 1996. This deals with succession and the state's responsibilities to citizens, including provision for public education, health and defence. It also promises citizens equal treatment under the law, regardless of gender, origin, colour, language, religion, sect, domicile or social status. Freedom of press and religious practice are also guaranteed provided such freedoms do not disrupt public order or hurt the state's security.
Islam is named as the state religion, although adherence to Islam is not a requirement for Omani citizenship. This law also lays down the responsibilities of the Sultan and the Council of Ministers. The two-chamber Oman Council, which consists of the Majlis al-Shura and the Majlis al-Dawla, is also discussed. Prior to the Basic Law, there was no Majlis al-Dawla. The law also states that the sharia, or Islamic law, is the basis for legislation in the country, whilst making provision for the organisation of the judiciary.
Under the Basic Law, the Sultan holds the position of head of state and prime minister, and holds the portfolios of defence, foreign affairs and finance. The system has received some criticism for being too centralised, hence making it difficult to manage projects or tasks and consult with the sultan. The royal family, uncommon for a Gulf state, enjoy few privileges. Whilst some of them hold cabinet and government offices, these are not guaranteed and suitability is judged by merit. In commercial activity, the royal family enjoy the luxury of being very well connected, but success comes as a result of their own endeavour. The Omani equivalent of the civil list is very small, and those closely related to the sultan are not provided with any stipends.
Oman has a close historical relationship with Britain and more recently with the US. The Omani position on the US-led invasion of Iraq in 2003 was in-line with regional opinion - they refused to condone it. The sultan did, however, agree to let the US use remote airbases for transit and refuelling. By the time operations began, the sultan offered little criticism and Oman was subsequently one of the first Gulf states to offer recognition to the Iraqi Governing Council.
As Oman continues to assert its co-operative position as a regional ally for the US and Britain, it is now keen to offer help establishing a functioning government in Iraq and to encourage engagement with the Arab-Israeli conflict.
Omani membership of the Gulf Cooperation Council (GCC) ensures good ties with regional contemporaries. The Omanis are keen proponents of closer regional ties and have, in the last few years, resolved all border disputes with the UAE, Saudi Arabia and Yemen. Relations with Yemen have also vastly improved since May 1990 when Yemen's north and south were reunited. Today's relationship with Yemen is far from the days when the pro-socialist South Yemen government supported the Dhofari rebels, back in the 1960s and 1970s. Thus, whilst Oman has been keen to promote stability and growth in Yemen, it still remains somewhat wary. Maintaining good relations with Iran is also of great importance, given Iran's close proximity on the other side of the Gulf.
Typically for the region, no formal relations exist with Israel, but this has not always been the case. An Israeli trade office was established in Muscat in the mid-1990s during the Oslo peace accord, but following the 1996 election of right-wing Israeli Prime Minister Binyamin Netanyahu, ties were frozen.
Population
A 2004 estimate put the population at 2,903,165 - a figure which includes 577,293 non-nationals. The presence of these non-nationals mildly skews the age distribution of the population and approximately 55.1% are in the 15-64 age range. The estimated growth rate in 2004 was 3.35%.
The population is very mixed. Arabs constitute the majority; the non-Arabs include Baluchis, who are concentrated in Muscat and the al-Batinah, Zanzibari Omanis, and a large South Asian population (Indian, Pakistani, Sri Lankan and Bangladeshi). The presence of Omanis of Indian descent in Muscat reflects the historical commercial ties between the sultanate and the Indian subcontinent. The official language is Arabic, but English, Baluchi, Urdu and a variety of Indian dialects are widely spoken.
Economy
Crude oil accounts for over 30% of Oman's GDP. The country is not blessed with the huge reserves and easy extraction that some of its regional contemporaries enjoy. As a result, output has fallen each year since 2001. This has added urgency to attempts at diversification, which are largely focused on natural gas extraction and processing. This is among a number of challenges that the government has identified. These include the rapidly growing population, public sector dominance of the economy and unemployment, and increasing demands for basic services.
In response, the government has been adhering to an economic policy strategy addressing three themes. Currently, there is five-year plan running until 2006 that addresses "Omanisation" (replacing foreign workers with Omani nationals), economic diversification and privatisation. Job provision is a major problem for the government as some 30,000 Omanis enter the job market each year. The Ministry of Manpower has been established to try and create employment for these individuals by providing funding for small-business start-ups. The government is also encouraging citizens to take up jobs with established private companies. The hope is that during the course of the current five-year plan, the private sector will create more than 100,000 new jobs. The success of this so far has been limited.
The government is also actively attempting to replace expatriate with local labour, focusing mainly on the private sector. A 2003 estimate showed that Omanis made up a mere 12% of the private sector workforce - compared to 75% in the public sector. The Omanisation policy is administered with a quota system under which companies that do not comply with requirements are fined and prohibited from hiring other foreigners. The government has also invested in training to make sure Omani companies can find suitable domestic candidates. This has been slow to show any signs of success though, a fact blamed on resistance from employers, who are often reluctant to employ higher salaried Omanis.
With oil reserves expected to be exhausted in less than 20 years, it is hoped new oil discoveries and advancing technology will prolong production. This does not mean that Oman is avoiding the need to diversify its economy away from oil. Previous attempts at this have focused on manufacturing, but more recently the discovery of natural gas has created hope for gas-based industries. Manufacturing accounted for a mere 7.7% of GDP in 2002, and this is limited by the sector's over-reliance on expatriate labour. Gas-based industries are also not getting started as planned, and are unlikely to provide much employment in the short term.
Privatisation began in the mid 1990s with the power and desalination industry. In 2001 the government privatised the management of some services in Seeb and Salalah airports, and a concession was granted for baggage services. OmanTel, the national telecommunications provider, was going to sell 40% of its holdings to a leading international company, but after failing to find a buyer it decided to sell 30% through the Muscat Securities Market. An increasing role for the private sector in combating the challenges facing the Omani economy is heavily reliant on the outcome of the gas-based projects.
