wrmea.com

July/August 1995, pgs. 49-52

Oman: A Model For All Developing Nations

By Richard H. Curtiss

Twenty-five years ago when Sultan Qaboos bin Said Al-Said assumed power in Oman it had three private schools enrolling a total of 900 students, all boys. Today it has more than 1,002 schools enrolling 481,100 students, of whom nearly half are girls. Literacy has climbed from near zero to 41 percent, but is much higher among Omanis aged 30 and younger. Twenty-five years ago Oman's capital, Muscat, and its adjacent port, Matrah, had a combined population of 20,000. Today that population has soared to 549,150. Twenty-five years ago Oman had 6 miles of paved roads. Today it has 22,800 miles of paved roads, including multi-lane divided highways that make it possible to drive in one day from Muscat to Salalah, the capital of the southern province of Dhofar—an overland journey that would have required two weeks by camel caravan a quarter century ago.

These seemingly impossible achievements, which have propelled Oman from feudalism almost into the ranks of "developed" nations in only a quarter of a century, are unparalleled in the developing world. Yet they are verified by a World Bank report which describes Oman as having "graduated" from the ranks of under-developed nations needing World Bank loans.

This was the background for a conference held June 3-4, 1995 in the Omani capital of Muscat entitled "Vison for Oman's Economy, Oman 2020." At the conference, sponsored by Sultan Qaboos and presided over by Omani Deputy Prime Minister for Financial and Economic Affairs Qais bin Abdul Munim Al-Zawawi and Omani Minister of State for Development Affairs Mohammed bin Musa Al-Yousef, Omani participants did not just dwell on their country's remarkable achievements during the 25 years since Sultan Qaboos assumed power from his reclusive and xenophobic father. Instead they discussed where they wanted their country to be at the end of the next quarter century. They also invited foreign participants to point out problems the country would have to surmount to reach those goals by the year 2020 (see boxes).

Oman's transition within one generation from one of the most technologically and educationally deprived countries in the world to a model of economic and social development is one of history's most astonishing, and inspiring, feats. It has been facilitated, of course, by revenues from Oman's inland oil fields, which went into production in 1967. But Oman's petroleum is not nearly as abundant as in neighboring Saudi Arabia and Iran, and it costs $5 to $6 a barrel to extract and bring to the coast for marketing, compared to $1 to $2 per barrel in Kuwait.

Because initial production was so low, Sultan Said bin Taimur, Oman's ruler at the time, was unwilling to use the revenues to begin developing the modern infrastructure his country so desperately needed. When his son, Oman's present ruler, returned from a British military education at Sandhurst and urged his father to open schools to enable Omanis to start acquiring the skills needed to develop their desperately backward country, the Sultan put him under house arrest in Salalah, Oman's southernmost coastal city. From there, reportedly with encouragement from the same British advisers who had urged his father to send him to England for schooling at age 16 and then to Sandhurst, the son took over the government on July 23, 1970, while his father was visiting Salalah.

Most formidable of the problems facing the 29-year-old ruler was illiteracy. For years almost the only Omanis who could aspire to an education were those whose parents could afford to send them to schools in the adjacent United Arab Emirates, to Oman's former colony of Zanzibar where they could live with relatives, or to relatively expensive boarding schools in Egypt or England. By opening schools as rapidly as possible, starting with the first grade all over the Sultanate, and staffing them with teachers from other Arab countries as well as the rare Omani graduates from abroad, Oman's new school system produced its first secondary school graduates in the 1980s. In 1986, the country's large, modern Sultan Qaboos university opened 40 kilometers from Muscat and Matrah, the twin cities of the national capital area. Today, Omanis who have obtained their entire education in Oman, including B.A. and B.S. degrees, are doing graduate work at universities around the world or already have taken their places as teachers, university professors and civil servants in their modernizing country.

Other problems that had to be overcome immediately were the absence of a health care system and of sanitary facilities for water purification, food handling and waste disposal. Although the rugged mountains and broad beaches of their country are spectacularly beautiful, most Omanis lived in relative isolation within tiny date-producing oasis hamlets accessible only by footpaths, or in fishing towns and villages accessible only by boat along some 1,056 miles of Arabian Sea and Arabian Gulf coastline.

Sultan Qaboos knew that to solve these problems his country needed political stability. At the time he assumed office Oman was in the throes of a civil war. Nearby countries like Jordan and the Shah's Iran offered help to the Sultan against a rebellion in his native Dhofar province which was being supplied and supported from South Yemen, then under a hard-line Marxist government. Although that war was contained in 1975, it was only 20 years later that final Omani-Yemeni borders were agreed upon and demarcated at a June 3, 1995 ceremony. Since Oman and Saudi Arabia also completed demarcating all of their long border in the 1990s, two major potential sources of instability have been removed permanently.

Although the 2.1 million residents of Oman, including nearly half a million expatriate laborers, are scattered over 212,457 square kilometers (82,030 square miles), they are united by a strong pride and the assurance developed over a history in which they never have been conquered.

The Omani ports of Muscat and Sohar were briefly occupied by Portuguese seafarers who first visited Oman in 1507, but the Portuguese were expelled on Nov. 18, 1650, a day now commemorated as Oman's national day. The Omanis then turned the tables, harassing Portuguese-held ports in Asia and Africa.

The history of Oman begins with humanity's first written records. The Sumerians, who lived in present-day southern Iraq and invented the world's first writing system, recorded the receipt of shipments of copper from the land of Magan, tentatively identified by modern scholars as Oman. The ancient copper mining and smelting works still can be seen near Sohar, where copper again is being extracted.

The Sumerian records demonstrated that as early as 5,000 years ago Omani sailors had learned to use the monsoon winds to link the inhabitants of the Tigris-Euphrates river valley to two other contemporaneous civilizations in the Nile valley in Egypt and the Indus valley in present-day Pakistan.

Three thousand years later, Roman writers complained that too much of their empire's wealth was being expended on the frankincense that originated in present-day Oman and was burned on altars all over the ancient world. This incense, and the roses grown in Oman's mountain valleys, still play a role in Omani culture, where rose-water is shaken into the hands of visitors to Omani homes, and the host wafts the aromatic smoke of burning frankincense into the clothing of guests as they depart.

Sailors from the Hadramauti ports of Southern Oman and Yemen reached as far as Guangzhou (Canton) in China in the seventh century. Because Omanis embraced Islam in 630 A.D., during the lifetime of the prophet Mohammad, more than 200 million Muslims now live in Indonesia, Malaysia, Sarawak, Brunei and the southern Philippines, marking the trading ports and, sometimes, ruling dynasties set up by these voyagers. Among them was Sindbad the Sailor, many of whose legendary voyages began from Omani ports. It was during this long period that Oman developed its own colonial empire, occupying a colony on the Makran coast of present-day Pakistan and Iran, and another in the giant clove-growing island of Zanzibar (now part of Tanzania) off the East African coast. For generations Baluchis from the Makran coast and, more recently, the descendants of Omani merchants in Zanzibar have been emigrating to Oman, particularly in the past 25 years as Oman's increasing stability and prosperity have contrasted sharply with deteriorating economies in its former colonies.

The present Al Bu Said dynasty was founded in 1744 when Ahmed bin Said was elected imam. In 1795 he divided the titles of imam and sultan between his two sons and in 1798 he signed the first of the friendship treaties that have linked Oman and Britain ever since. During this period Oman sent an emissary on an Omani trading ship to Philadelphia in 1840 to establish diplomatic relations with the United States.

Oman's empire broke up after the death of Sayyid bin Sultan in 1856, when Britain settled a dispute between his sons by giving Zanzibar to one and Oman to the other. Oman gradually lost its other overseas possessions as well and, in 1915, rebellions broke out in the interior. They were not settled until 1959, accelerating the decline that ended only in 1970.

In 1975, Oman initiated the first of four five-year plans that have depended to a large extent on the price and production level of petroleum. At present, since Oman is finding new reserves at almost the same rate that old ones are being depleted, the government's goal is to maintain the present production level of 800,000 barrels per day for the rest of this century.

The extraordinary building and beautification program in Oman's capital and its suburbs was made possible largely by the increase in the price of oil in the late 1970s. New ministries, shopping malls and residential villas sparkle white in the sun in an almost continuous strip from Bustan, east of Muscat, to Seeb, the site of a brand new international airport more than 20 miles to the west. At present, with the price of oil stagnant and delineated in a sinking dollar, Oman has less money to spend on such beautification, but it nevertheless has undertaken major regional expansion and beautification in towns throughout the country.

Having accomplished most of its infrastructure-building goals in its first quarter century, Oman's government will concentrate in its upcoming five-year plan on "Omanization," inducing the private sector as well as the government to find jobs for the growing annual number of graduates from Oman's schools. It also is focusing on environmental protection, on encouraging Omanis to save more of their incomes and thereby reduce the need for foreign investment, on freshwater conservation and production, and on dealing with its extremely high birthrate through education.

Oman's petroleum is produced by private companies and it plans to look to the private sector for some $6 to $8 billion in investments needed for a liquified natural gas (LNG) program to exploit and market its estimated 20 trillion cubic feet of natural gas reserves. Oman already uses its gas for electric power generation and most domestic heating and cooking, saving its precious petroleum for marketing abroad.

Perhaps because of his Sandhurst education, which included actual stints with British army units in England and in Germany, during the early years of his reign Sultan Qaboos brought in British advisers to turn his military forces into crack units by Western standards. Although Oman's military now is a leader in "Omanization," the rigorous training and discipline persists.

Oman has been foremost among the Gulf Cooperation Council states in pushing for collective GCC defense measures. Oman also has cooperated with U.S. military forces, both in providing land-based support facilities for the U.S. Seventh Fleet when it is in the area, and during the Gulf war when Oman joined all of the other GCC members in making its ports and airfields available as needed by the Coalition forces to liberate Kuwait.

The accompanying boxes provide Oman's vital statistics and also facts that surfaced during its recent "Vision 2020" conference to plan the next quarter century. In conjunction with its human resources development, Oman is taking cautious measures toward liberalizing its political structure, which remains that of an absolute monarchy. As in neighboring Arab countries, the first step has been to establish a Majlis al Shura, a consultative council enabling delegates from the country's 59 wilayats (governates) to meet regularly with the Sultan. In each wilaya three potential delegates are selected by popular ballot. Of these, the Sultan nominates one or two from each wilaya for service on the majlis. At present, of the 80 members, two are women.

Sultan Qaboos, who unquestionably is one of the most popular rulers in the Arab world, has enhanced his reputation with annual tours of the country on which he is accompanied by his entire cabinet. As the royal entourage sets up camp in varying parts of the sultanate, direct complaints to the Sultan from local residents are dealt with expeditiously by the responsible ministers.

When Sultan Qaboos acceded to the throne, there were no newspapers or radio or television stations in the country. Edicts from the Sultan had been posted by his military retainers on city walls. Within a week of his accession to the throne, Sultan Qaboos had opened in the national capital area his country's first, one-kilowatt radio station. Now every part of Oman is reached by the multiple transmitters of its national radio. Two television stations in Matrah and Salalah share responsibilities for production of telecasts that also reach virtually every corner of the country. In addition there are five newspapers, three in Arabic and two in English, and the Oman News Agency, which brings news in and transmits news out of the Sultanate.

From Oman as well as from other absolute monarchies in the Arabian peninsula and Gulf, reports began appearing in the European press in 1994 of arrests of critics of the government. Although little of this has appeared in the Omani media, Western diplomats estimate that the Omani government detained about 500 such critics with points of view ranging from those of the Arab nationalist Ba'th movement to Islamists supporting the Sunni Muslim Arab Brotherhood.

While those detained did not constitute an organized opposition, many disliked what they considered excessive Western influence in the Sultanate. Most were questioned and released within a few days, but some 30 were tried on various charges and one sentenced to death--a sentence later commuted. Those serving sentences were held in what one U.S. diplomat describes as "a model prison" near the international airport at Seeb, a far cry from the dungeons that existed in Oman prior to 1970.

The Sultanate, once sealed off almost completely from the outside world, now is opening up in many ways. Tour groups have been allowed to visit the country in growing numbers since 1987, and the government has initiated a 10-year plan to bring tourism up to the point where it provides 3 percent of the gross domestic product. How rapidly the isolation of Omanis is ending is attested by the omnipresent satellite dishes that bring in foreign television to anyone who can afford them.

Oman also has initiated a system of civil courts that operates in parallel to the Islamic law courts and owes much to English common law. Clearly Omani pride and self-assurance in never having been colonized makes its people more open to borrowing what they find good in the West, while conserving the unique features of their ancient culture. The satellite dishes and increasing tourist presence reflect the government's new confidence that when Omanis freely compare their own achievements with those of other nations, they will opt for continuation of the combination of careful planning and free-market exuberance that has made their country an Arab model for developing nations everywhere.

Richard H. Curtiss is the executive editor of the Washington Report on Middle East Affairs.

SIDEBAR 1

Achievements of Oman's Past 25 Years:

Two press conferences conducted June 4 and 5 by Omani Minister for Development Mohammed bin Musa Al-Yousef for some 70 foreign journalists and Omani media personnel attending a seminar entitled "Vision for Oman's Economy: 2020" in Muscat yielded a remarkable array of facts about Oman's achievements during the first 25 years of Sultan Qaboos bin Said Al-Said's reign, his government's plans for the next quarter century, and quotable assessments by Mr. Al-Yousef. Among them:

  • Oman's goal is to double per capita income by the year 2020, making full allowances for the country's current rapid rate of population increase. It seeks to do this by developing expertise in such fields as agriculture and fisheries and through encouraging entrepreneurship. It also anticipates that the rate of annual population increase will drop from the present very high 3.5 percent to 2.7 or 2.8 percent by 2020 as a result of improved education, greater participation of women in the labor force, and family planning programs already underway.
  • Oman seeks to provide health care and primary education for all of its citizens.
  • Oman plans to restore fiscal balance over the next 25 years. At present the debt is not at a dangerous level since it does not exceed 34 to 35 percent of the gross domestic product.
  • Although Oman is in the process of removing subsidization from the economy, such progress will be gradual. The country plans to remove subsidies from gasoline and telephones, but it   does not plan to raise the price of education or subsidized water and electricity.
  • In the fifth five-year plan, starting in 1996, there will be a drop in public expenditures. These reductions will be extended to all public sectors including the military, and they will be accomplished through increased participation by the private sector.   There will be no decrease in salaries or allowances in the public sector.
  • In Oman, trade is free. The private sector may import from any country it chooses.
  • Oman's currency is stable and the government puts no restrictions on sending remittances abroad or on investment abroad by its citizens, with the exception of some socialist countries or countries which have put artificial restrictions on currency exchange rates.
  • Oman's 8.5 percent annual real growth rate in the gross domestic product (GDP) is one of the highest in the world.   Although Oman also has a very high birth rate, nevertheless its present per capita GDP growth rate exceeds 3 percent.
  • Oman's "steady progress and improvement in the quality of life has brought it to a level comparable with the most developed countries," according to Mr. Al-Yousef.

Goals for the Second Quarter Century:

  • The environment is a central concern, having received special attention from Sultan Qaboos.
  • Human resources development is another central Omani concern and is necessary in order to make its economy fully competitive internationally.
  • "There is no development without Omanization," which must extend beyond the government to include the private sector. At present, of 430,000 expatriates in Oman, 180,000 work in private and public sector establishments, and 190,000 are in domestic service or agriculture.
  • Oman has reserves of 25 trillion cubic feet of natural gas.
  • The World Bank has labeled Oman an "outstanding performer" and therefore considers that Oman has "graduated" in that it no longer needs World Bank loans.
  • In seeking to extend privatization of its economy, Oman does not require all foreign firms to have indigenous partners. Of 19 commercial banks operating in Oman, 8 are 100 percent foreign-owned.
  • Oman's investment law of 1994 permits repatriation of profits of 49 percent and, with special permission, of up to 65 percent or even 100 percent. Oman also will negotiate with foreign investors tax holidays of 5 years or 10 years.
  • As a result of this "flexible and hospitable environment," according to Mr. Al-Yousef, "I don't think any country can compete with Oman as an 'investor's paradise.'"
  • Oman imposes high tariffs in very few categories, sending "a message to our private sector that it now is not just an Omani market or a GCC market but a global market in which it must compete."
  • Oman has embarked on a 10-year plan for tourism, which it hopes will comprise about 3 percent of the GNP by the year 2020. Similarly, a well-thought-out program for promotion of Omani handicrafts is expected to provide increased employment.
  • Because Oman's level of savings is low, planned facilities for producing and exporting liquid natural gas (LNG) will require $6 to $8 billion in foreign investment, including transfer of technical, marketing and management expertise.
  • Because Oman requires more water for its expanding population it is relying on water desalinization in some areas where water is scarce and on improved utilization in some agricultural areas, which can switch from flood to drip irrigation systems.
  • Although Oman has been criticized for devoting 30 to 35 percent of its national budget to defense and security, this figure includes police as well as military costs, and also includes the full cost of a weapons system in the budget for the year in which it is purchased, instead of spreading such costs over several budgets as do many other countries. Therefore this percentage is not out of line with the true costs of military budgets for other countries in the region.—RHC

SIDEBAR 2

Oman at a Glance

Population: 2.1 million, of whom one quarter are expatriates (1995).

Total Land Area: 309,500 sq.km. (About the size of the state of Kansas).

Capital: Muscat.

Ethnic Distribution: Mostly Arabs, small numbers of Baluchis, Indians.

Language: Arabic.

Religion: More than 50% Ibadhi Muslim, remainder Sunni and Sh'i Muslim and Hindu.

Literacy: 41% (1995).

Per Capita Income: $7,365 (1992 estimate).

Total GDP: $11.54 billion (1994 estimate).

Major Industries: Petroleum production and refining (4.5 billion barrels proven reserves); natural gas production (20 trillion cubic feet estimated reserves); construction, cement, copper, dates, fishing.

Transportation: 22,800 miles of highway; one passenger ship; four transport aircraft; 122 airports (114 usable).

Chief of State: Sultan Qaboos bin Said Al-Said (since July 23, 1970).

National Day: Nov. 18.

Climate: Hot and humid along the coast during the summer and pleasant throughout the winter.

Geographic Features: Narrow coastal strip, rugged mountains in north & south, vast interior desert plain.

Form of Government: Monarchy with consultative council.

Year Admitted to U.N.: 1971

Organizations: Arab League, Gulf Cooperation Council, Organization of the Islamic Conference.

Armed Forces: Total personnel (army, navy, air force, royal guard) 29,500.

Defense and National Security Spending: $1.75 billion (1994).

U.S. Aid: $600,000 military aid; $15 million economic aid (economic aid to be discontinued in 1996).

Life Expectancy: Men 66 years; women 70 years (1994).

Birth Rate: 40.3 births per 1,000 population (1994).

Death Rate: 6 deaths per 1,000 population (1994).

Natural Increase: 3.5% (1994).

Education: Non-compulsory. 481,100 students attending 1,002 schools; one university (1994).

Communications: Two radio stations; one TV station; five daily newspapers of which three are in Arabic and two ( Oman Daily Observer and Times of Oman ) are in English.

Trading Partners: Exports: Japan, South Korea, Taiwan; Imports: UK, UAE, Japan, U.S.

Currency: One Omani rial equals U.S. $2.58. One U.S. dollar equals .387 Omani rial (1995).

National Airlines: Gulf Air for international flights. Oman Aviation for regional and internal flights.

Travel: Business visitors must have a local sponsor; Travel agencies and some Omani hotels can sponsor tourists; no U.S. State Department restrictions; no innoculations required.

Embassies: Embassy of Oman, 2535 Belmont Rd. NW, Washington, DC 20008, Tel. (202) 387-1980.

U.S. Embassy, P.O. Box 50200, Madinat Qaboos, Muscat, Tel: 698-989