Commodities, Emerging Markets, Energy, Frontier Markets, Geopolitics

Oman’s 2016 Geopolitical Chessboard: A Discreet Actor In The Middle East

Oman

Discreet, the Sultanate of Oman becomes more and more a  “pragmatic foreign policy actor” to consider  in the Middle East. But how the Sultanate’s past present and future political choices could affect its territory and the whole region?

A country that has such a geostrategic position in the Middle East and still remains somehow still unknown to the West, comparing to other regional actors such as UAE, Kuwait or Bahrain. As an absolute islamic monarchy, a country which bases its revenues on oil rents though, from being a watchdog of the Strait of Hormuz to coexisting in a neighbourhood with some countries being in a very complicated situation (i.e Yemen)in their history, and some other that one’s cannot establish relations very easily with.

Quick facts about the Omani Sultanate

The monarchy
The sultan is a direct descendant of the 19th century ruler, Usman Sa’id bin Sultan, who first opened relations with the United States in 1833. The Sultanate has neither political parties nor legislature, although the bicameral representative bodies provide the government with advice. The sultan does not designate a successor when alive. Instead, the ruling family tries to unanimously designate a new sultan after his death. If they do not designate a new ruler after three days, then they open a letter left to them by the deceased sultan, containing a recommendation for a new sultan. It is assumed that the ruling family will agree on this person as the success.

The Sultanate of Oman emerges as a first-class diplomatic actor in the heart of the Middle East conflicts .This is the result of a not-interfering and a not aligned foreign policy, led by the Sultan Qaboos who analyses everything very carefully since 1970.

Legislative system and interior policy.
Oman’s judicial system traditionally has been based on the Shari’a–the Qur’anic laws and the oral teachings of the Islamic Prophet Muhammad. Traditionally, Shari’a courts fell under the jurisdiction of the Ministry of Justice, Awqaf, and Islamic Affairs.

It also has a zero rank on the Global Terrorism Index, a position that very few of its neighbors share. They reserve this position due to a variety of factors. First, both the Consultative and State Councils include representatives from every social faction in the country. These bodies are given the appropriate powers and are not simply figureheads to appease the public. In addition, women are provided equal opportunities in education and careers, a basic right which many nations in the region do not provide. Furthermore, Oman’s official religious narrative called Ihbadi Islam is one of the most tolerant in the faith, a characteristic which has a direct impact on governmental proceedings.

Economy (@GlobalriskInsights)

Not only has Oman achieved massive economic growth, it has also exponentially increased the standard of living for its citizens. At the helm of this remarkable economic prosperity has been Sultan Qaboos bin Said Al-Said. Over forty years Sultan Qaboos has overseen a program of both modernization and economic liberalization that has transformed Oman from a former agriculturally and isolated sultanate to a strong economic and diplomatic actor in the Gulf and the Middle East Region.

The Omani economy has seen spectacular GDP growth, increasing from USD$256m in 1970 to around USD$79.66 billion in 2012. Omani oil reserves provide the backbone for economic development, but Oman is not as rich in hydrocarbons as its GCC neighbours. With the implementation of the Eighth Five-Year Plan in 2011, Sultan Qaboos has set in motion an ambitious goal to diversify the economy with an aim to reduce the contribution of oil to the Omani economy from 37.2% to 9% of GDP.

Oman GDP growth (annual %)

DATA WORLDBANK: GDP Growth (annual GDP%)

By 2020, Oman also seeks to have the correct conditions for economic diversification, optimal exploitation of both the Sultanates geostrategic location and its oil and gas resources, while also focusing on human resources to guarantee that Omani citizens benefit greatly from this development. As part of its economic diversification goals, there has been increased government expenditure in the country’s gas deposits, and the development of massive infrastructure projects such as the expansion of three major ports in Sohar, Duqm and Salalah.

Oman is one of the world´s biggest oil producing countries and oil and natural gas extraction account 
for 51 percent of GDP. The services sector represents 37 percent of the wealth. Within services the largest 
segments are: wholesale and retail trade (8 percent of GDP); public administration and defense (7 percent) 
and transport, storage and communication (6.8 percent). Manufacturing and mining contribute for 6 percent 
of GDP, construction and electricity and water distribution for 5 percent and agriculture for the remaining 
1 percent. 

Once completed, these ports are set to make Oman a leading logistics hub in the Middle East. Alongside the advances in investment in infrastructure, there has been exponential growth and investment in the Omani tourism sector and manufacturing industry.

oman oil rents of gdp %

Oil rents of GDP % in Oman :Oil rents are the difference between the value of crude oil production at world prices and total costs of production.

source: tradingeconomics.com

Oman provides an example of both internal and external political and economic stability in an increasingly unstable Middle East.

Geopolitics

Russia 

Russia enjoys traditionally warm relations with Oman and the UAE. Russian Foreign Minister Sergey Lavrov’s has visited both countries earlier this winter and met with Omani colleagues Yusuf bin Alawi and Emirati Abdullah bin Zayed bin Sultan Al Nahyan. Both meetings indicated that traditionally warm relations with these nations will remain so in spite of differences on Syria.

The Kremlin values Oman for its neutral and pragmatic foreign policy especially in terms of handling such sensitive issues as the Syrian conflict. Russia particularly appreciates this neutrality despite Oman’s obligations to the Cooperation Council for the Arab States of the Gulf. Unlike Qatar and Saudi Arabia, Oman is not known for supporting fighting groups in Syria, which is a very strong and positive sign for Moscow.

Iran 

Iran and Oman are respectively located on the north and south coasts of the Strait. This factor requires them to maintain good-neighborly relations regardless of what happens at the regional or international levels. Iran and Oman assume that there is a close connection between the security of the Strait of Hormuz and their own security. This point strengthens their motivation to maintain a close and friendly relationship.

The two countries are aware of the fact that geographical factors are not subject to change. Their geographical proximity via the Strait of Hormuz, Oman’s relative remoteness from the Arab world and the geopolitical and geostrategic importance of the Strait have required Iran and Oman to maintain a good, neighborly relationship with one another.

On that basis, and despite the fact that Oman has always had closerelations with the United States and recently developed its ties with Israel, its friendly relationship with Iran has largely remained intact.

Oman was instrumental in bringing the United States and Iran to the table together, which after decades of sanctions, hostage crises, and opposing security concerns, was a major obstacle to even beginning the discussions which have led to the nuclear deal presented this week.

Oman has always had good relations with the United States while also maintaining a strong relationship with Iran; most other GCC nations actively oppose Iran because they see it as both an economic and ideological threat. Oman’s unique neutral position enabled Sultan Qaboos to mediate between the United States and Iran, the motivations for which mainly regard regional security.

In 2013, the two countries signed an agreement on gas supplies to Oman in a deal valued at $60 billion over 25 years.

Syria

Oman, unlike other Gulf Cooperation Council states, has maintained diplomatic relations with Damascus since the Syrian crisis began.

Last October, Oman’s foreign minister and Syrian President Bashar al-Assad met in Damascus and discussed ideas that have been put forward to address the Syrian crisis according to the Syrian state news agency SANA and Reuters.

Oman, a U.S-allied Gulf Arab state, sees itself as a conciliator in a volatile region and has a history of constructive relations with Syria’s other close ally, Iran.

Diplomats have said it could play the role of mediator between Syria and Assad’s adversaries, which include Washington and other Gulf states.

Omani Foreign Minister Yusuf bin Alawi and Assad discussed regional and international ideas that have been put forward to address the Syrian war, SANA said.

Yemen

Oman was the only GCC member that did not join Operation Decisive Storm. Oman’s mature and far-sighted response to the Houthi takeover of Sanaa underscored Muscat’s understanding of Yemeni history, where no fighting force has ever been able to seize control of the entire nation. Conflict resolution in Yemen will require a power-sharing agreement in which all sides have a voice at the table, rather than a military campaign aimed at crushing the Houthi rebel movement. To this end, Muscat has maintained its neutrality throughout the conflict and has been committed to advancing peace talks.

Since the launch of Operation Decisive Storm, Oman has hosted representatives from many factions in the civil war. In May, US State Department officials held secret talks in Muscat with a Houthi delegation, and Houthi representatives met with Iranian Foreign Minister Mohammad Javad Zarif and with GCC officials. Omani officials have also secured the release of Western civilians detained in Yemen by militant groups.

From Oman’s vantage point, the Houthis and Saleh loyalists do not represent the same threat that Muscat’s fellow GCC members perceive from these actors. Instead, the Omani leadership is most unsettled by the threat that a prolonged conflict poses to the security of Oman’s Dhofar governorate, situated along the Gulf Arab nation’s 187-mile border with Yemen.

Israel/ Palestine

There has been a significant support, during the last years, of the Omanis to Palestine represented in building new campuses for universities, colleges and schools in different parts of Palestine.

For Washington Institute, the most obvious growth period in Israeli contacts, taking it from the intelligence to diplomatic level, dates back to the 1990s and the Oslo Accords, which enabled at least some of the Gulf States to circumvent their previous reluctance because of the absence of peace between Israel and the Palestinians. In 1994, then-prime minister Yitzhak Rabin went to Oman and met Sultan Qaboos, the ruler. A year later, after Rabin was assassinated, Omani foreign minister Yusuf bin Alawi came to Jerusalem to see then-acting Prime Minister Shimon Peres. In 1996, the two countries signed an agreement to each open trade representative offices. The same year, Qatar and Israel agreed to do the same.

Peres visited both capitals, and the trade offices, with three diplomats in each, were established. But Oman shut the Israeli office in 2000 while the one in Qatar lasted until 2009. Neither Muscat nor Doha fulfilled the agreement by establishing offices in Israel.

Sources: Reuters, Omansultanate.com, CIA, Russian Council.ru, Al-Monitor, Wikipedia, GlobalRiskInsights

Links:

Books: A History of Modern Oman

Ronis Sofroniou is the author of Eyes on Europe & the Middle East and  was born in Limassol, Cyprus, and studied Human Resources Management and French Language at Montpellier 3 University (2007) and granted with a Master’s degree in Oil and Gas Management from Abertay Dundee University in 2014. He worked at the Cypriot Embassy in Paris in 2009 and just after as a B2B salesman person in the smartphones market for some years.  Currently, he lives between France and Cyprus where he works as a  French teacher, Interpreter and Career Advisor.

 

About Eyes on Europe and The Middle East

A blog dedicated to discuss independently without any instrumented propaganda against democratic beliefs and freedom of speech in Europe and the Middle East . middleeastnewsservice@outlook.com

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