Free Speech, Teddy Bears and Islam's Response - reprise

Disclaimer: This post is intended to discuss aspects of free speech and international issues relating to free speech in the secular West and Islam. Readers must note that Omani Law is not in this regard based on Shari'a, but on English Common Law in line with His Majesty's 1996 decree, and there is no issue with the laws of the Sultanate. All religions in the Sultanate are afforded the protection of the law and respect is in all cases to be shown. Nothing in this post contradicts the social, cultural, political, religious or economical values of the Sultanate of Oman. I would ask any commentators to do the same.

So, here we are again. On a comment to my earlier post on the infamous Sudanese Teddy Bear incident and the lack of moderate Islamic reponse Balqis said there were (only) two opinions on the Teddy bear incident voiced from the Muslim people in Oman who wanted to make them in public on Sabla and Omanforum.
1/ those who actually agreed with the Sudanese (people I consider to be effectively living in the Middle Ages, ie The Wackos) and
2/ those who didn't agree with the punishment but thought she should have known better, or been more respectful, or punished more leniently, and who anyway viewed it was a good opportunity to show the world how easy it is to offend (precious) Muslim sensibilities and serve as a warning for them to be more careful. I'll label them The Apologists.
(OK, I paraphrased, go and check the comment in full if you’re curious).

She also states 'There's no fear to speak about it, no need to do it loudly cause that's not Islamic etiquette'. Hmmm.

Firstly, I'm afraid I see no evidence what-so-ever that it is standard Islamic etiquette to be subtle and quiet. Whenever there is anything anywhere that can be portrayed as an insult to Islamic sensibilities, the extremely loud and vociferous calls for heinous punishment and retribution seem to be everywhere including the Omani Fora, and that also usually includes rioting in the streets of Pakistan and Iran.

But I am trying to be logical and, in true secular western tradition, actually think I can have a discussion based on observable reality and facts. It's too big a point to just comment back, hence this post. Note - I fully realise it is generally impossible to have such a meaningful discussion with those who are already totally convinced that they have all the correct answers nicely written down in a book from circa 1400 years ago. I would urge interested readers to look at the personal and poignant essay by the Iranian woman Azam Kamguian of the International Humanist and Ethical Union here . Her story seems to be more typical of what passes globally these days for Islamic etiquette.

But, what about those arguably more liberal Omani Muslims who thought the Sudan incident was a total joke, should have been no big deal at all, and who were in no way offended? (because, hey, they realise it was just a freaking teddy bear.) I think the tone of Balqis' comment (to say nothing of the crap I see regularly on Oman Forum) shows exactly why these really moderate people often don’t speak up - because they would be accused of not being good/true Muslims, and they really can’t be bothered arguing with such people. And I certainly would avoid at all costs being accused of 'not being a true Muslim' if I was such a moderate Omani. Why?

There are so-called Moderate Muslims (like Amjad seems to be) who actually say they believe that the correct and fair punishment for what someone merely thinks inside their head (ie denying one’s Muslim faith and therefore being considered to be an Apostate) should be death (and a death delivered by humans now rather than a punishment to given by God after a natural life). I find that extremely worrying. And it certainly doesn’t fit my definition of moderate. I think it borders on insanity, and is an attitude that would be right at home with those of the Spanish Inquisition, Stalinist Russia and Pol Pot’s Cambodia to name but a few.

In my opinion, it is this violent approach to the punishment of Apostasy (and blasphemy), and the extensive support throughout the Muslim world this approach receives, that is the No.1 reason for the significant problems between Islam and the secular West. It is an excuse that is often used to justify horrific acts of evil enacted upon perfectly good and reasonable people. I would be very interested in how many of the so-called moderate commentators Balqis refers to believe Apostasy and Blasphemy should be punished by violence.

Until the vast majority of the Muslim faithful change this extreme view, cease to act with violence upon it and cease to agree with those who call for violence in a religious situation, there will never be a reasonable and truly moderate accommodation between the secular West and Islam. In addition, the forces of true moderation within the Muslim community will remain vulnerable and at risk of violent persecution. This must never be allowed to happen in Oman.

You see, its not like the Teddy Bear case is rare, or unusual, or restricted to totally bat-crazy dark age shit-holes like Sudan. At present, the death penalty for Apostasy is the law in Saudi Arabia, Qatar, Yemen, Iran, Sudan, Afghanistan, Nigeria, Pakistan and Mauritania. In Pakistan even 'simple' blasphemy is also punishable by death. And even where death is not the explicit law of the land, we hear reports of the calls from many Mosques and Immams for such extreme extra-judicial punishments to be delivered by the faithful anyhow, in places such as England, France, Bangladesh and Denmark. Salman Rushdi being a classic example. I personally know of people in Oman who have been arrested, had their life seriously threatened, and had to leave the country following the mere accusation of blasphemy.

There was the famous case recently of the man in Afghanistan who was sentenced to death for converting to Christianity, and even more shocking the Christian man arrested in Pakistan in 2003 and charged with having thrown litter on the ground near a mosque in Lahore. This was deemed an offence under section 295 of the Pakistan Penal Code, which provides up to two years’ imprisonment for defiling a place of worship. He was held in a Lahore prison but transferred to hospital in May, suffering from tuberculosis. He died after his police guard attacked him in the hospital. The police officer stated that he had done his religious duty.

The Barnabas Fund report (admittedly a Christian Charity) concludes:

The field of apostasy and blasphemy and related 'crimes' is thus obviously a complex syndrome within all Muslim societies which touches a raw nerve and always arouses great emotional outbursts against the perceived acts of treason, betrayal and attacks on Islam and its honour. While there are a few brave dissenting voices within Muslim societies, the threat of the application of the apostasy and blasphemy laws against any who criticize its application is an efficient weapon used to intimidate opponents, silence criticism, punish rivals, reject innovations and reform, and keep non-Muslim communities in their place.

There are, of course, serious Islamic religious scholars – and by no means would all these scholars to be considered Moderates - who disagree that the penalty should be death, most especially because such a penalty is not actually part of the Qur'an at all, but is based on interpretation of the Hadith. It would unfortunately seem that these scholars are in the minority, as apparently all 5 major establishment authorities on Shari'a Law go with Death. There is some disagreement on whether death applies to men only or women too. Some kindly see women as only deserving of life imprisonment until they repent or die of natural causes. Some also differ slightly on the suitable punishment depending whether the person is born of Muslim parents or is a convert.

Oman has a potentially huge role to play in this global moderation, especially with the benefit of having a more reasonable Ibadhi interpretation of Islam as a national majority and a demonstrable tradition of religious tolerance. Oman's natural strengths of reasonableness, understanding and diplomacy could, under the guidance of His Majesty, provide for the whole world a light at the end of this tunnel of increasing darkness and extremism.

So, step up and help. Help get rid of the justifications for violent retribution for simply being insulted. Help push back hard against those who want to drag us all back to the Dark Ages, threaten us into the Sudanese/Saudi/Iranian/Pakistani version of Islam and to an interaction based on isolationism, fatwas, jihad and hatred. Or you're part of the problem.

Background: There is an excellent discussion, many more links than I can be bothered to copy here, and several enlightening essays on being an Islamic Apostate [and being an Apostate in general] in Wikipedia

Balqis also highlighted an interesting comment piece in the International Herald Tribune as an example of, albeit international, moderate response IHT comment

Oman keeps killing people on the road

The Oman Community Blog noted the recent article on Road Deaths in Oman.

In the 10 months to October 2007, injuries were 6742 and fatalities 635, around 15% up on last year. I'm also curious what the number of children injured or killed was given the almost total lack of child seats or seat belts being used, and considering the number of children I see loose in the car ready to be flung through the windscreen if there is an accident. But these stats aren't released.

While numbers of deaths and injuries continue to rise, the Times of Oman article had this classic Omani spin statement:

Statistics, however, show a 7.5 per cent fall in road accidents at 7,124 compared to 7,705 in October last year, thanks to the stringent government measures.

Yes, it's a minor improvement, and as the number of cars has risen, would look even better as a % of traffic I'm sure. But the fatality rate is shockingly high. In fact, the rate of fatalities to injuries (at around 10%) is 3 times more than in developed countries (around 3%). The Government's measures are far from stringent.

It is not about raising 'Public Awareness', the usual Omani answer to real problems – these drivers are totally aware of what they are doing. The answer in my opinion is more – a lot more – undercover traffic police, and better training for all the traffic police too. Dangerous drivers need to be stopped and fined. Really dangerous drivers should be stopped and arrested. We all see so many acts of dangerous driving every day that it would be easy for the police to stop them. Unfortunately the police themselves don't always drive safely either. Cameras on the highway may be a cheap option, but technology can't replace trained cops.

Oh, and Happy Holidays everyone.

Aside: Any Tourists coming to Oman should try to hire a 'PDO Specification' Toyota Landcruiser car rental. I know it costs more than getting a crappy little Toyota Echo, but it really is an insurance premium worth paying. Plus it means you can go offroad safely. A good place to rent high spec 4x4 from is a company called Shuram LLC (Rent A Car Division) PO Box 194, PC 134 Tel: (968) 24696299

Blue City – The real story: Bahrain Businessman Ahmed Janahi Forced Out

You'll have seen the ads around for the Blue City, now of late called Al Medina Al Zarqa, a mega-development in Al Sawadi with the usual hotels, freehold apartments, golf course, marina, etc etc. Read on for the latest story surrounding this project.

Muscati recently noted Muscati's blog the very unusual letter to stakeholders that was sent on Sept 17th to investors and 'stakeholders' by Anees Issa Al-Zadjali, the CEO of Blue City Company 1 SAOC, about reports of the legal battle between AAJ Holding, the Bahrain-based originators of the scheme, and Cyclone LLC, a private company who had 30% of the action and part-owners with AAJH of the various Blue City development companies.

Cyclone is asking for a right to acquire the shares in Ocean currently owned AAJH arising from the circumstances in which the ASIT were originally acquired by AAJH. Shares in ASIT were subsequently exchanged by Cyclone and AAJH for their current holding of shares in Ocean. If the claim is successful, Cyclone will emerge as the sole shareholder in Ocean. Cyclone is an Omani company wholly owned by Omani shareholders.

It seems Cyclone was suing AAJ for all the shares, claiming AAJ were insolvent. A similar claim was made in a related US lawsuit too. Of course, claims of insolvency are a common tool of the legal process and don't necessarily mean anything real.

Dragons informants tell a different story... which may be true, or totally not true. But they are highly placed, so judge for yourself.

AAJ and their flamboyant CEO, Bahraini businessman Ahmed Janahi, were instrumental in putting the original development deal and vision together. (See a nice set of links and info on AAJ Holdings from the wonderful Sue Hutton and her non-Oman based NewsBriefsOman) AAJH organized the slightly shady financing deal that successfully raised close to US$1 Billion in capital to underwrite the $2 Billion++ Phase 1 development. You can also see in the previous link more on the strange financial group Oppenheimer Investments AG, and their no-relation-what-so-ever to the famous South African Oppenheimers, which was the basis for that other law suit in New York this year.

However, it seems that once the project was funded and clearly able to fly, the Omani shareholders in Cyclone weren't too happy giving 70% of the hopefully substantial profits to Mr Janahi.

So, my sources tell me AAJH was basically told to 'get out of Dodge' by Cyclone. They gave him a choice: 1/ To sell all his shares to Cyclone in return for just his original investment expenses, or 2/ They would use their significant connections to make sure he got nothing at all, ever. Mr Janahi is no fool, and apparently gave in to the request by choosing Option 1.

The AAJH website and the Blue City website still list Blue City as a project AAJH are involved with.

But AAJH in Bahrain told me somewhat mysteriously over the phone that (quote) 'err, no, they are no longer involved with the Blue City project in Oman'. (unquote) Which is fully consistent with my source's side of the story.

Of course, maybe it wasn't the money at all, but that Cyclone just didn't want to be associated with someone who is involved with Michael Jackson... Gulf News. It seems AAJ is quite friendly with Michael and thought he could help provide the entertainment he thinks is key to such a project. Hmmm.

The shareholders in Cyclone are apparently a member of the Omani royal family and a local business personality: see story in AMEinfo. Presumably Cyclone were able to supply the land as their part of the deal, along with a commitment from the Government to provide the significant infrastructure development essential to such a mega-project [roads, power, water, legal framework, rights for the waterfront developments].

So, Cyclone's shareholders end up with the whole deal, a checkbook with about $1 billion dollars (less the not insignificant fees of about $42million apparently paid to the financiers and all those associated with the bond deal) and can also now totally control the cashflow and all other aspects of the development. Sweet move.
Update: The member of the Royal Family (reported in AMEinfo) who owns a big part of Cyclone (and hence Blue City) is apparently HH Sayyid Haitham bin Tariq Al Said, also the current Omani Minister of Heritage and Culture. The 'prominent businessman' is as yet unidentified...

It would seem clear that the move against AAJH had the support of the highest levels of Government. I'll keep trying to get more comment from AAJH and more detail on the shareholders in Cyclone.

Background
Note the company structure for Blue is quite complicated as is not uncommon with such mega-projects.

There are the original private investment companies, AAJ Holdings and Cyclone LLC. They owned 70% and 30% respectively in Ocean Developments SAOC, who in turn own Al Sawadi Investment & Tourism Co. LLC (ASIT), Blue City Company 1 SAOC, Blue City Phase 1 Land Company Limited, and Blue City Future Phases Investment Company Limited.

AAJ Holdings Corporation (AAJ Group) AAJH was founded by Ahmed Abubaker Janahi in the British Virgin Islands as a limited liability company known as AAJ Holdings Limited (AAJHL).

AAJHL exclusively owns a Bahrain based group of companies known as AAJ Holdings Company (AAJHC), a closed shareholding company. AAJHC represents and withholds AAJ Group's interests, which are predominantly real estate focused professional companies as well as equity stakes in real estate developments.

Cyclone LLC was also involved in some fish farming and fish processing projects in Oman. As a private company with few shareholders it is very hard to get any details. Anyone who has some info on Cyclone can email the undercover.dragon@gmail.com in complete confidence.

Ocean Developments SAOG, owns Blue City Investments 1 Limited (BCI1) - the actual 'Issuer' of the bonds. The bonds are secured against the project cash flow and the land for not just phase one but other phases as well. (Exactly how that land can be used as security given Oman's strange laws on property ownership I haven't been able to find out.)

The Blue City Company 1 S.A.O.C. (BCC1) is the 'Developer' of Phase 1 of the Blue City Project by virtue of the 'Works Agreement' with the owners, and the 'Borrower' of funds (from the proceeds of the Bonds) to implement the project under an Inter-company Loan Agreement from BCI1, and it acts as the 'Employer' to the Design & Build Contractor for the implementation of the entire scope of Phase 1.

The Blue City, known in Arabic as Al Madina Al Zarqa, is a tourism and residential development being built in the Sultanate of Oman. The eventual US$ 15-20 billion project (if it gets that far!) will cover a triangular area of 35 square kilometers (14 square miles) along the Al-Sawadi coastal region. It will be a 30-minute drive from Seeb International Airport, 100 kilometers (60 miles) from Muscat and 10 kilometers from the closest town of Barka. The first phase is being built at a cost of about $2 billion. Also note that the take-over by Cyclone should not have any detrimental impact on the viability, schedule or funding of the project.

Iraqi troops being trained in Oman

Those of you who hang around airports and hotels in the Sultanate may have noticed the common appearance of well built Americans with very short hair and large necks, sometimes accompanied by short wiry Arabic-looking men with big moustaches wearing new civilian clothes.

I can explain. It seems that the American military are flying into Oman lots of Iraqi troops and police for training here rather than in Iraq. Obviously it’s much, much safer to do that here, where security can be assured and they can also be assisted by the Omani forces for translation and support (plus the Omanis would be an excellent example to the Iraqis of competent Arabic soldiers too). Since 1980 Oman and the U.S. have been parties to a military cooperation agreement, which was revised and renewed in 2000.

The Americans are also using Jordan for these ex-Iraq training sorties too, although they operate somewhat more openly than here. My sources couldn’t supply me with numbers being trained and I will not say where in the Sultanate the training is taking place for obvious reasons.

I think it’s a great example of the sort of undercover support that His Majesty gives to other Arab countries and is a significant - and real - contribution to the wider region’s stability. It also provides lots of brownie points from the US Government, which is great for Oman too.

The Teddy Bear Saga and Islamic Response

An Oman based blog I like to read by Suburban Other Oman recently mentioned surprise at the lack of responses by Muslims criticising (or even questioning) the obviously wacky verdict in Sudan on the infamous Teddy Bear case. Especially absent were such comments on the great 130+ blog comments that were sponsored by Amjad on the topic Amjads Teddy Blog

I think this is exactly symptomatic of the growing problem Islam has with regard to Free Speech. Many, many Muslims thought the verdict in Sudan was totally crazy and bad for Islam [or even not Islamic at all], and were more than willing to explain that in private. But they are in fear of saying anything in public, or even on-line, that could possibly be construed by anyone as being even slightly anti-Islamic. Very afraid.

The reason, of course, is that if any crazy long beard accuses you of being blasphemous, even if the accusation is totally unfair and untrue, you are at serious risk of having crowds of baying 'faithful' demanding your death. So, obviously much better and smarter to just keep your head down, shut up and keep such toughts to yourself or people you can trust.

This is perhaps one reason why the comparison is being made between the actions of such extremists through the new phrase 'IslamoFascism'. One similarity being pointed to is with the early days of the 3rd Reich in Germany, when no-one spoke out about what was going on for fear of being arrested, beaten or killed themselves. The famous quote attributed to the Irish born British Politian Edmund Burke seems most appropriate in this situation: "All that is necessary for the triumph of evil is that good men do nothing".

IMHO its about time reasonable and mainstream Muslims retake their right to speak their opinions and have respectful discussions and debate without fear of such accusations. Before its too late. The alternative is to leave the space to the extremists and give everyone the opinion that all Islam is as crazed as they are. Which is certainly not true.

There are just not enough well spoken, intelligent, sensible, moderate (and preferably who look good on TV) Muslims making their case in the public forums of the West in a form that is politically smart. And that hurts the case of reason everywhere.

Aside: An excellent essay here casts doubt on whether this was an actual quote from Burke or is a self purpetuating myth. The quote's popularity does say something about the power and resonance of this particular meme.

Sex and Free Speech - Savage Love

Just a little mini-post. I’d like to share one of my favourite web columns, not only because it’s funny, kinky and thought provoking, but also because the column is not only online but is published in several newspapers every week in the States. Yet another example to help explain how free speech works in the real world. It’s a sex advice column called Savage Love and is extremely explicit, so don’t look if you don’t want to read about straights, gays, fetishes and real sexual activities and desires and the problems that they create. But if you’re OK with that, I highly recommend checking it out.

Savage Love

Just for fucks sake don’t tell Omantel or they’ll block it and I really wouldn’t like to have to use a proxy server to read it every time. OK? It’ll be our little secret.

What I find an interesting thought experiment is to imagine a similar column in the Week... Now THAT would be a sign of changing values!

When in doubt, hold a Conference!

Sometimes it seems as if 50% of Oman’s Government employees are at some conference or workshop, somewhere, all the time. Yes, this time it’s a conference on Human Trafficking (see the awesome Times of Oman, December 17th). Of course, reading the incisive reportage from the Omani 4th Estate it seems a great idea and original initiative, held under the auspices of the Oman Prosecutor General Hussein bin Ali Al Hilali with the theme ‘Public Awareness in combating human trafficking and the collective responsibility’. Wow. And apparently we are assured a draft decree is in the works.

Aside: Dragon notes that Prosecutor General Al Hilali is a very fantastic person who is doing a wonderful job.

What the newspapers are not pointing out, naturally, is the real reason for such sudden interest in the problem. Recently the US State Dept listed Oman as a Tier 3 country with regard its lack of efforts to combat the problem of human trafficking – the lowest rating, placing Oman along side such tourist wonder-zones as North Korea, Saudi Arabia and Sudan. More ominously, the US Senate mused about sanctions for such countries, and certainly weren’t too impressed to have just entered into a Free Trade agreement with such a state. OK, US politics play a part of course. But a huge embarrassment for the Government.

Hint: This is why such a legal and public awareness themed gathering is actually sponsored by the Oman Foreign Ministry.

I’d recommend reading the complete Oman country report highly, its really good (and free) US State Dept. report on Oman Human Rights
And, actually, there is a lot of good stuff in the report too, because while I like to criticize because I think things can always be made better, in many ways Oman is pretty civilized and has done a huge amount of good things. Especially obvious when compared to their many and totally fucked up neighbours [Saudi, Yemen, UAE, Iran, Qatar, Pakistan].

Omani official sensibilities were somewhat disturbed by the report when it was issued, to the extent that several Government Officials were even reported in the Omani press defending their [rather poor] record on the issue (which shows how big a deal it had become, making one suspect the report had reached the attention of the highest levels of government). They failed to realize that the State Dept. bureaucrats actually focused on demonstrable action, like laws against human trafficking, actual arrests and prosecutions, victims not being arrested and deported, institutions in place and funded to protect the victims, police resources to enforce, evidence that foreign workers basic human rights are actually protected, and a clear commitment to improve things. None of which applied to Oman.

Hence, this conference, and maybe a law soon. Expect the pliant press to play their role with some preachy stories too. Unfortunately, just talking about it and being seen trying to be seen trying to be doing something about it (the typical government response to any issue, see recent action on inflation, Gonu, …) may well be enough to lift the country into Tier 2 [where the UAE is]. As opposed to actually doing anything.

Like prosecuting the pimps and importers of the prostitutes, or their clients. Or actively protecting the rights of Indian and Philippino workers. Or prosecuting the employers who illegally confiscate passports of expats. Or making it easier for those abused Philippino and Indonesian housemaids to complain about the violence and rapes, the 7-day week 18 hr days work, the not being paid, etc. Or protecting the Indian building workers here on less than 100 rials a month and made to work in flip-flops, up on rickety scaffolding with no safety kit what-so-ever. The list goes on.

But, the Ministry boys have probably called it right. A conference, some press reports, and a specific law will probably be enough for the diplomats to convince the US State Dept. that they have enough to elevate Oman to Tier 2 in the next report. Problem solved.

So, wonderful news for exploited expats and trafficked sex workers in Oman. A conference! Well done lads!

Free Speech and Blasphemy

On my earlier post on Free Speech and Islam, and the importance of being able to offend people to protect the right of free speech, Blue Chi made a good point, 'What about blasphemy then?'

It is true that in some European countries Blasphemy (though you should note, usually only against the Christian faith) is, in theory, illegal, but it is usually because of very old laws that would not be used today and have just never been formally repealed. As you'll detect, I'm more in favour of the USA system, which is more liberal and you can be as blasphemous as you like.

To the question of making blasphemy illegal, my response would be:
1/ Why? I'd have thought that God was big and powerful enough to defend him/her self. What's wrong with good old lightening bolts for christ's sake?
2/ Exactly what is blasphemy? Who decides? You? Some judge? The head Mullah of Iran? Or Sudan? My crazy neighbour? How offensive do you have to be to be officially blasphemous?
3/ Which religions deserve such protection? Just the big 3 of Christianity/Islaam/Judaism? What about Mormons? Hindus? Or Scientologists? Or Moonies? Rastafarianism? Or just the one that is true?
4/ What about the intra-religious schisms? Is a Shiite follower allowed to call a Sunni an apostate and state his religion is total crap and point out the prescribed penalty for being an apostate? What about Protestants who don't agree with the Catholics that the Holy Mass transmogrifies bread into the physical flesh of Christ? Is being atheist a religion?
5/ Is legalising homosexuality blasphemous? Abortion? Sex education? Evolution? What about a really good joke about 'a Priest, A Rabi and an Immam'?
6/ What's the punishment for blasphemy? Death? Fine? Lashing?

It's a total mess of a law and of an idea.

Much better, IMHO, is that people who choose to believe in supernatural beings [or who choose to believe in an absence of supernatural beings] get a thicker skin and have faith that their god (or gods) can look after themselves. The Christians seem to have taken this approach over the past few 100 years, and thus today content themselves with peaceful protest. For example, as the Catholics did over the movie 'The last temptation of Christ' or 'The Life of Brian'. Can you imagine the reponse to a muslim version of the Life of Brian? I’d predict a serious lack of humour.

In fact, maybe it's just the atheists and the Buddhists who need legal protection, as after all, they are the only ones without an activist superpowerful god to protect them. ;-)

Similarly, some European countries make it illegal to 'Deny the Holocaust', mainly as a way of more easily controlling those pesky neo-nazis (who do admittedly have a history of acting in rather problematic ways, like shooting people and taking over the country and invading their neighbours). Again, rather than extending such restrictive laws to such dubious realms as religious protection, I would rather repeal them.

I'll repeat – I do not think that protecting everybody from being offended is a basis for controlling people's speech. And that includes religion. Any religion. Including yours Blue Chi.

Currency Revaluation Stalls

Sorry for the wait - was overseas on business and could not get a moment free to blog. Apologies!

As you will know, the GCC last week decided not to announce an immediate revaluation last week. Anonymous pointed out that I'd given "too much credit to the GCC fiscal policy makers."

Indeed. I had expected a quick 5-10% revaluation, especially of the UED, to postpone discussion on switching to a basket of currencies, and to stop the huge inflows of speculative money. I was wrong.

I think at the Doha talks it was mainly the Saudi's who refused to play along, knowing what damage it would do to the dollar (and their friends in Washington) and their vast investments that are dollar denominated. The official comments that came out from Bahrain and Qatar, after the talks, shows that the issue of revaluation was indeed discussed. What I found most interesting - as pointed out by a Standard Chartered Bank report yesterday - was that the official Doha communique did NOT state that a revaluation was NOT going to happen!

There was clearly an inability of the GCC States to agree, but at least it seems they agreed not to act unilaterally.

Perhaps the GCC see it as a link to the common currency and will thus wait until 2009? But at these oil prices the problem will not go away. If the dollar stops falling, at least imported inflation will get a lot better, inflation being a sustained rise in the price of goods and services. But the real problem is the inability of the GCC under a dollar peg to raise interest rates to reduce liquidity in the economies. It doesn't help either that world food prices are skyrocketing in any currency. The bottom line will be a need for pay increases for both State and Private employees in the GCC and more inflation to come.

I'd still hold AEDs until at least after December...

Free Speach and Islam (1)

One of the biggest cultural differences I’ve come across in the Middle East is the huge problem of getting across to locals what freedom of speech means in [most of] the West. In many ways the tradition is strongest in the USA and to a certain extent the UK, and their cultural derivatives NZ, Australia, Canada, etc. When combined with the principal of separation of Church and State, it leaves many Muslims baffled (as the Danes discovered recently).

Caution: If you’re reading this, please ensure you’ve first read the bit here on the right hand side of this blog about not being easily offended. You’ve been warned.

Free Speech means, of course, many things and has wonderful complications and subtleties, but to me it means that one is generally free to criticize public officials or Government policies, free to voice opinions about, say, human behaviour, science, religion or politics, and basically being free to offend people.

Now, that doesn’t mean I think you can or should get away with saying [or printing] whatever you want. Shouting ‘fire’ in a crowded cinema, urging a crowd to commit violent acts (who then go and commit such acts), or knowingly and purposely defaming someone (lying) to the extent that they suffer damage and can demonstrate that what was said or printed are untrue and damaged them, are some classic examples of common limitations. Pornography has always been a tough call, as have politically extreme views [we must kill all the XXXX for example].

But simply offending people, even knowingly, is not commonly illegal in the West. After all, it’s so butt-fuckingly god-damn easy to do. [see?] Comedians would be out of business for a start. And artists. And opposition politicians. And anyone whose religion is at odds with the majority, or the ruling class, or even the self appointed leaders of that religion. And usually the people concerned have to actually try to get offended anyway, by going to the comedy club, or watching the programme, or going to that website, etc. Essentially by choosing to seek to be offended.

And it seems someone is always being offended by something, somewhere.
Want to discuss the morals and legalities of homosexual men and gay marriage in a grown-up and dispassionate way? That gets you offending the Muslims, Christian fundamentalists, homophobes and various others right away by even suggesting that one should have such a debate in the first place.
Want to give good advice, especially to young people, on how to avoid getting HIV/AIDS that goes beyond ‘don’t exchange bodily fluids at all ever’ and might mention condoms, or oral sex – there you go, lots of people offended.

Want to name your cat after your best-friend who lives down the street? Probably OK, as long as he isn’t called Mohammed, (although he might be offended personally if it’s an ugly and or female cat).

Anyway, it seems many people just don’t get it – the protections we have as a society (in the West at least) against tyranny, oppression [both political and religious] and invasions of privacy are founded on the fundamental right to offend people. And that includes Muslims, Jews, Christians, Atheists, Evolutionists, Liberals, right wing nutters – everybody.

All these arseholes who I’ve seen recently trying to justify the lashing/deportation/guilt of this teacher in Sudan (who named a teddy bear Mohammed) are good examples. They offend the hell out of me with their stupid, parochial, bigoted, arrogant, dark-ages, nonsensical, finger-pointing, and supernatural attempted justifications. Saying things that will unfortunately have a real impact, not just for these children and their poor teacher, but for people in Sudan who need aid and help and possibly even for totally blameless moderate muslims elsewhere.

But I don’t see that my being offended is a good reason, or even a kinda-valid reason, to stop them saying it. Lots of things offend me. And in some ways I’d rather we all get to know what totally whacked-out fuck-up idiots are out there thaks to their transparent display of the crazy ideas they believe to be logical or justifiable.

Worst thing? They probably have driving licenses too. Evil Bastards. Just to be clear - those of you who think the teacher deserves any punishment for calling a teddy bear Mohammed are in my opinion totally insane.

To Quote Wikipedia:
The most important justification for free speech is a general liberal or libertarian presumption against coercing individuals from living how they please and doing what they want. However, a number of more specific justifications are commonly proposed. For example, Justice McLachlin of the Canadian Supreme Court identified the following in R. v. Keegstra, a 1990 case on hate speech:

Free speech promotes: "The free flow of ideas essential to political democracy and democratic institutions and limits the ability of the state to subvert other rights and freedoms.
It promotes a marketplace of ideas, which includes, but is not limited to, the search for truth.
It is intrinsically valuable as part of the self-actualisation of speakers and listeners.
It is justified by the dangers for good government of allowing its suppression.”
End quote

More research and debate on Free Speech and what it means can be found at the excellent website of the American Civil Liberties Union ACLU_Free Speech

Omani Ex-Minister Ahmed Suwaidan al Balushi Again

Just a quick one - I was thrilled over the holiday to buy a copy in my local supermarket of The International Herald Tribune [22nd November Edition] and find a story on the recent Ericsson alleged bribe that actually named the Ex-Minister of Telecommunication as Ahmed Suwaidan al Balushi.

I wonder if it got through:
A)Because it was buried in the middle of the paper
B)Because it wasn't printed across a picture of a bare-chested or bikini-clad woman
C)Because the Omani Gov. doesn't care about such reports being available

Obviously I've yet to read anything about it in an Omani paper. But, no surprise there.

Perhaps the plan is to simply ignore it, knowing most Omanis don't know about it, or don't care about it, and let it fade away. (I'm pretty sure they don't sell a lot of International Herald Tribunes in Nizwa.)

Unfortunately its a plan that will probably work.

Act Now - Momentum builds to Rial and GCC revaluation

Recent media and press reports are building rapidly to prepare the ground for a revaluation of the GCC currencies, including the Omani Rial. A great example is Wednesday's story in Arabian Business and here.
The latest issue of international magazine The Economist also called for a GCC revaluation at minimum, and expressed a preference for a basket that included the oil price explicitly. The brother of Oman's powerful Minister of National Economy was also quoted last week musing in the press that a 5% revaluation would be appropriate, importantly making the link to Oman's previous devaluation when oil prices were low and advocating a simple revaluation while remaining on a dollar peg. The well-connected and perceptive Muscati also reported last week that those in the know in the Omani Government are moving money into AED.
I suspect the 'compromise' agreement will be a general GCC revaluation of 5-10% announced very very soon - maybe before Wednesday as the GCC meets Monday - while retaining a dollar peg. I think a basket a-la Kuwait will prove too difficult in the short term to agree on. Once the decision has been made, and all indications are that it has already been made except perhaps the exact % amount, the change will need to come very quickly to avoid massive speculation.
So, dragon's advice - get as many Dhirams as you can today or tomorrow, or at least don't sell rials for USD or other currency for a week or so. The rial may not revalue as far as the UED. Once the market decides a revaluation [or devaluation] is on the cards it quickly becomes a self-fulfilling prophesy as the flow of funds can overwhelm even the largest Central Bank resources. So, fill your boots kids, and make a cool short-term return. You can be sure the GCC won't be devaluing, so there's not a lot of downside here...

Oman Waste Water Company capitulates to the Chinese

I meant to blog about this a couple of weeks ago, but got distracted.
Anyway.
Oman Waste Water Services Company had a press conference where they announced that they had re-engaged the Chinese company SinoHydro to continue the massive waste water project. The details are here Times of Oman Article

Work on Muscat Wastewater project to resume next month
Tuesday, November 13, 2007 12:14:23 AM Oman TimeMUSCAT — Work on the Muscat Wastewater Project, which was stopped temporarily after the June cyclone, will resume next month, the Oman Wastewater Services Company announced yesterday. According to Omar, like all large-scale projects, technical problems are almost inevitable. Work had come to a halt in some parts of the Bausher area. The current difficulties are relatively minor and temporary, particularly in the total context of the project.

“Sino Hydro Corporation which had been contracted to lay the pipeline network remains committed to the long term interests of the project and I am happy to announce that we have reached a solution and agreement with them. I can confidently tell you that work will be restarting by the end of the year,” Omar disclosed to the press.

Great. I was a bit disappointed however than none of the crack reporters present seemed to think of asking some real questions. Like, ‘Can you tell us what happened to all the Indian and Nepalese workers SinoHydro abandoned when their management fled the country in June?’
As reported here News Post India Article
and here in the excellent (and Dragon recommended)News Brief Oman

Or questions like: ‘How much extra did Oman Waste Water Co have to pay to get the Chinese back, seeing as no-one else would touch the contract with a 10 foot pole? Or, Why are you now paying extra money to a contractor that has a recent history of both completing work at poor standards, abusing their workers, bringing in illegal Nepalese workers, and of fleeing the country and their responsibilities when things got difficult? Or, What is OWSC doing to make sure the previous mistakes are not repeated?

No, instead all we got was the usual moronic re-printing of the press release that flatters OWSC with no mention of any of the real story. Well done Times of Oman.

SinoHydro did its runner after cyclone Gonu trashed a lot of their original work and OWSC decided not to entertain any compensation. Perhaps OWSC should have made sure that SinoHydro had insurance against such events. Or awarded the contract to a decent company in the first place. But when it was clear to SinoHydro that the contract was flawed, they literally left. All SinoHydro Senior management got on a plane and flew back to China. Leaving everyone in limbo. Anyone who has experience in contracting knows that you never want to take on someone elses work once they’ve started. The liabilities are too great.

So it seems SinoHydro had OWSC by the balls. Now, as a result of the flawed contract, and OWSC incompetence, SinoHydro are back, on improved terms, and with no apparent penalities for their previous behaviour. OWSC management are still in their jobs, and probably planning holidays to Switzerland to see the gnomes.

Actually, I made that last bit up – I have no evidence whatsoever that the fantastic team at OWSC have done anything improper at all. Because that just wouldn’t make any sense at all, would it?

We all know who will have to pay for this – the Oman Government, and the people who will again have to deal with dug up roads all over the Capital not finished properly. Good work OWSC!

Omani Employment

In a press release a couple of days ago I saw this gem:

MUSCAT — The number of national manpower employed in the private sector establishments until November 18 stood at 55,694.
[Times of Oman Article]


I still find that incredible. Incredibly low that is.

If the population of Omani's is around 2.5 million, and around half are of working age, that means only 54,000 out of more than a million people are working in paid employment in private companies? 5%??? Maybe someone left a zero off the end?

I have to presume this does not include owners of their own businesses, taxi drivers, etc etc. But when you remember that approx 80,000 Omani youngsters graduate high school every year, you can see the present and looming problem.

Massive under- and un-employment.

It is and will continue to be an issue for the entire Gulf region. People are still having way too many children, and it is still much much more attractive for employers to employ expat workers to actually get work done cheaply and effectively. Omani staff are - and I realise this is a generalisation - often just uncompetitive.

If this does not change, and soon, it will all end in tears.

Ericsson accused of bribing ex-Omani Minister

Omantel really in the news this week!

That Ericsson was accused by a Swedish Journalist of paying about 2mln into the Swiss bank account of an agent for the ex-minister of Telecommunications in the late 90s hit the wire last week, but the ex-Minister was never named. That changed today.

It seems Swedish Radio has published documents listing the account's beneficiary as Ahmed Suwaidan Al Balushi, ex Minister rsponsible for telecom at the time and until 2000. Presumeably the same person who was also chairman of Oman's Alliance Housing Bank, until he was replaced at EGM July 2007.

While the investigator on whose work the story is based has said he has no evidence that the claim is true, readers should note that because he wouldn't have such evidence as he was looking at the system, not specific payments, and he hasn't said its not true.

A google search will get all the messy details.

STOCKHOLM, Nov 21, 2007 (AFP) - Ericsson AB, the world's leading mobile networks maker, allegedly paid more than a million dollars (euros) to a former Oman government minister in what appears to have been a bribe for a large contract, Swedish public radio reported Wednesday.

Ericsson paid 12 million kronor (1.3 million euros, 1.9 million dollars) into the Swiss bank account of Oman's former telecommunications minister, Ahmed Suwaidan Al Balushi, in the late 1990s, apparently as compensation for winning a 300-million-kronor contract in the country, Swedish Radio said.

"This seems very strange ... That the company paid some government minister through an agent probably means in this case that it was a bribe," Oerjan Berner at anti-corruption group Transparency International told the radio station.

Swedish Radio posted bank documents and memos detailing the transaction, made public during a tax probe of the company, on its website.

Ericsson in one memo listed go-between agent Peter Sullivan and his company Middle East Services as the beneficiaries of the commission payment for the contract it had received from Oman's telecommunications authorities to expand the mobile network in the capital Muscat, according to the radio.

The bank documents however reveal that Al Balushi, who was Oman's telecommunications minister until 2000, was the owner of the account into which the money was paid, the radio alleged.

http://www.zawya.com/Story.cfm/sidANA256325105406
www.gulf-daily-news.com/Story.asp?Article=200701&Sn=WORL&IssueID=30247 - 27k -

Omantel spends large on strange Pakistani Company

What's going on with Omantel? Their 'great deal' seems to be a huge payment to a local businessman for a not very impressive minor Pakistani Telecom compnay.

Many of you will have read that Worldcall Telecom says it has accepted the offer of Oman Telecommunications (Omantel) to buy 60% of its shares, in a deal worth 11.3 billion Pakistani rupees ($185.6 million). Omantel will acquire 60% of Worldcall at 25 rupees per share, the company said in a notice to the Karachi Stock Exchange seen by Reuters on Wednesday.

http://www.arabianbusiness.com/503692-worldcall-gives-nod-to-omantel-deal

As part of the deal, Omantel also has to acquire an additional 5% from those shares publicly traded.

What’s the real story? It seems more than a bit fishy.
Is this a good deal for Omantel Shareholders? The shares traded recently at about 18 rupee/s, so Omantel is paying a 40% premium to acquire the company vs traded prices. They are paying a 17% premium vs it’s peak price over the past 12 months of 21.30, which only occurred as the share price spiked following the rumours of Omantel’s interest that emerged in May this year. Until early this year when the Omantel deal leaked the share price was just 10Rupee. So Omantel in its wisdom is paying 250% more than the company was valued at early this year! And since then the company has actually performed much worse than in 2006.

The company has never paid a dividend, so its hard to get a P/E ratio. However, the latest 2007 results aren’t pretty – Earnings before tax from on-going business fell from 898mlnRupees to 358mlnRupees and revenue was flat. By my calculations, this means Omantel has paid an effective P/E of more than 50 times core earnings for a company in a highly competitive market with much bigger and better funded competitors. The company also has significant debt, with interest payments this year of 306mlnR [$5mln]. Total ‘real’ assets (ignoring goodwill and intangibles) are worth about US$200 mln, so again, Omantel seems to be paying 50% more than effective book value, for a company that of late has demonstrated no growth in revenue and actually lost money in 2005. For all the details, see

http://investing.businessweek.com/research/stocks/financials/financials.asp?symbol=WCTL.KA

Its hard to reconcile these numbers with the statement from Omantel quoted in that bastion of high quality investigative reporting the Oman Daily Observer - “Unlike other regional firms, we are very conservative and prudent in investing our funds,” said a senior official of the company.

The not-so secret majority Omani shareholder in the Pakistani WorldCall company that Omantel decided to buy so expensively is Sheikh Sulieman Ahmad Said Al-Hoqani. Sheikh Hoqani is also Chairman of the publicly traded Oman Hotels and Tourism Company, who run the Al Falaj Hotel, Ruwi Hotel, Al Wadi Hotel and Sur Plaza Hotel, essentially a set of second tier hotels.

Even more interestingly, a Mr. Salmaan Taseer serves as Chief Executive Officer and Director of Worldcall Telecom Ltd and the company reports that his total Annual Compensation is $1.6M. Hmmm. Nice work if you can get it. That’s about 25% of the company’s real profits this year. Maybe Omantel will be looking into the compensation packages…

WorldCall is strongly linked to First Capital Securities Corp. Ltd. (1CSC:Karachi Stock Exchange), currently trading at around 90Rupee up from a yearly low of just 22Rupee. Sheikh Hoqani is on the board of directors of 1CSC, and its board shares most of the board with World Call. Mr. Taseer also serves as Chairman of the Board of Directors and Chief Executive Officer of First Capital Securities Corp. Ltd. His compensation package from 1CSC is not stated.

Sheikh Hoqani is listed as a major shareholder in Khadim Ali Shah Bukhari & Co. Ltd.[KASB] a Pakistani Financial Services Company, Brokerage, Bank and IT conglomerate. Interestingly, KASB also owns World Tel Oasis, an IT company also specialising in Internet provision in Central Asia in partnership with World Tel Canada. It also is in the internet supply business in Pakistan, and would seem to be a competitor to WorldCall.

It might be very interesting to know the details of any financial commitments WorldCall has made to 1CSC. It seems strange that 1CSC’s share price has shyrocketed at the same time as the Omantel deal with WorldCall was made clear.

Proxy Servers and Oman

Sorry team, I was off on business for a while, and then had to be a bit careful postwise. The Ministry IT team were snooping... Hmmmm. As they say, sometimes the paranoid are right.

Anyhow, for those who want to avoid the Omantel filters, there is a programme that - well, at least as of today - will work in Oman to automatically find proxy servers. And the site is available [unlike most of them], so if you are interested in surfing without Omantel looking over your shoulder, act fast kids, before it joins the list of blocked sites.

Its called Invisible Browsing v6.5:

http://www.download3000.com/download_46788.html




or try:

http://www.newfreedownloads.com/find/invisible-browsing.html




Good luck surfers!

Please note: this will get you around Omantel filters, and hide your TCP IP address, but if Omani Internal Security really, really want to find you, they probably still can, as anyone who's seen the series 24 can explain...

More Omantel wierdness

It was bad enough that the Government had to cut the 'Royalty' [ie special tax] Omantel pays to help boost its sagging shareprice and ease its cashflow problems. The company also is the monopoly supplier of Internet connections to the outside world in Oman - Nawras could get 10x the bandwidth at 10% of the price they pay OmanHel via the UAE, but that would be against their licence with the TRA.

But the recent announcement of Omantel buying a stake of $204mln in a pretty obscure Pakistani Telecom company for a pretty hefty stake is very interesting, as highlighted by the (always well connected) Muscati here at the Oman Community blog:

Oman Community Blog: Omantel - Smoke and Mirrors

The questions: who owns the shares? How does the price compare to projected cashflow? Anyone out there who knows?

How business works - part 2

Tip No. 2 Exploit your advantage

The tax laws in Oman are heavily biased toward local companies. A pure foreign company has to pay 32% company tax, whereas a local affiliate, or a fully local company, only pays 12%. This is a serious difference. The catch however, is that only Omanis can register a local company or affiliate.

So, all foreign affiliates [or expat workers] here have to have a person called ‘a sponsor’. Some Omani – actually pretty much any omani adult – who’s willing to act as your local sponsor. And you get an instant tax discount of ~66%.

Naturally, all foreign companies take advantage of this. And then question is: who do they want as a sponsor? Obviously, someone who can add value to the 5 – 10% they’ll have kick back to them for the privilege. Maybe even someone who can supply some of the things you’ll need easily, like Indian workers, a bank loan for working capital, premises, legal support, and business contacts.

This was and still is a key loophole the merchant families exploit to extend their reach into businesses across the board in Oman. It was also a perfect way to employ the rapidly accumulating numbers of sons, cousins, sons-in-law, and eventually their children too, getting them involved in business, without risking any capital and getting them nice paying jobs too.

Even better of course, if the sponsor [or their Dad, or Uncle say] are ‘connected’ to the sources of all the major cash in Oman that a foreign company wants to be a part of, ie the Government, especially a department with lots of projects going or lots of things they need to buy.

There is obviously nothing whatsoever illegal about this. Somebody has to be the sponsor, after all, it’s the law. And if the tender process is all above board, no problem.

Ministers and other senior officials are not allowed to be on the board of public companies, or companies that are tendering for Government contracts. But there doesn’t seem to be any law whatsoever against people very close to senior Government members being a sponsor to a private company.

But I’m also not sure this law has been extended to tenders associated with private companies, even where a significant participant is Oman Oil Company, a wholly Government owned investment vehicle in the upstream and downstream oil and gas business and acknowledged incubator of big projects, like Sohar Aluminum, but not actually a formal part of the Government itself.

None of this is strictly a problem either. The problem is that there is no public scrutiny of these dealings. To find the names of company sponsors, you have to physically go the register of companies and look. And it is trivial to have a chain of such companies interlinked, like YYY Holdings, SSS Trading, etc etc, and figuring out who the actual owners and sponsors are is not easy. They might even be a sub-contractor, or a sub-sub contractor to the actual winning company. Very very difficult to track, even for the State Audit Office [who do seem very very honest, by the way].

Plus, no newspaper in Oman is going to point out that the son of Minister X’s brother is sponsor of a company that just won an Oman Oil contract for $XXX. Or not that I’ve ever seen. And as they would not be able to prove anything illegal, even reporting it would itself be potentially illegal [see earlier post].

What I do know is that at the Government departments I deal with, the first question of the list of big foreign companies bidding for a tender is not how good they are, but ‘Who’s their sponsor?’…

Interesting isn’t it?

A primer of Omani Business.

This is the first in a series of posts about how things ‘work’ in Oman, and why the so-called big families dominate business in Oman.

BTW, Anonymous emails are welcome from those with any inside knowledge! Your confidentiality is assured. You can email The Dragon at:

undercover.dragon@gmail.com

Any discussion on corruption or business in Oman needs a background in the country’s recent history. There’s an excellent general summary to be found at the US State dept. site here.

http://www.state.gov/r/pa/ei/bgn/35834.htm href="http://www.state.gov/r/pa/ei/bgn/35834.htm">

How does history relate to Corruption?
Essentially, you have to realise that in 1970 the ‘country’ of Oman was essentially non-existent, fragmented along tribal lines and with no true central government, few businesses, and beset by rebels from Yemen and feisty people in the mountains & interior. Oman had no real infrastructure at all, and a population of mainly uneducated peasants fishing and raising goats and dates. The old Sultan was a little crazy, especially following an assassination attempt in 1966, and had a vision that seemed to involve keeping his people as backward and ignorant as possible. That changed radically when his majesty Sultan Qaboos took over in a coup, deposing his father.

Now, the new Sultan had HIS vision – a prosperous, educated, modern country that was wealthy and happy and sustainable for the future. But how could he achieve that? He had hardly any resources, some land and a little money from the oil.

After suppressing the rebellions, with the help of the British Airforce and Army and the Iranian Army plus his considerable skills as a Diplomat in applying the carrot and the stick, one of the first things he did was call upon the Omani disapora, many of whom had made their money in the old Omani Empire in the estates of Zanzibar and East Africa, or in trading businesses in the Gulf States and between Oman and India. As a result they had been able to educate their children abroad, plus they had both capital and expertise in running businesses. The Sultan asked them to return to help rebuild the place.

Many did. As a result, and as large amounts of cash started to flow from the Governments coffers, Oman gained an instant and wealthy ‘Elite’, who were naturally rewarded for their loyalty and assistance with land [one of few things the Sultan had to give], opportunities, and Government funded contracts. These people brought money and expertise, and built the country as we know it today. Of course, somebody had to build the roads, the hospitals, the military bases, the houses, the ports and the schools, and they also had a right to make a profit doing so. This boost also assisted the existing Merchants close to the Royal Family. This is how Oman gained now famous Zawawi’s, Zubair’s, Al Sultan, Al Yahya, and Al Araimi.

Plus, the assistance his Majesty received from key people in the military and Palace during the battle with forces loyal to the old man also deserved and received rewards of privilege, for example positions in the Government, more land, and contracts financed by the oil that was just starting to flow. Some names from this group are the Al Wahaibi’s, and Shanfari’s. A few of the big families from the restful interior had to be placated too, such as the Al Harthy’s…

But the legacy of those understandable decisions remains. Especially in a small and relatively poor country, being rich and well connected tends to create opportunities to make more and more money. It happens everywhere. It’s the power of economies of scale.

And it’s no surprise it happened here too. So, keep that in mind. Some especially younger Omanis might not like it that all the money and the businesses seem concentrated in the same hands, but its really only thanks to the old guard that they even have a country to begin with, let alone one where they can go shopping in air conditioned malls and eat fast food.

So, Oman Business Tip no. 1: Get in early
Get in a country at the entry level, by securing a monopoly for a desired import, or starting a local company in construction. Secure contracts with the Government to build things [like roads], or run things [like ports]. Get a friendly banker. Or even better, start a bank. Staff your business with bright hard working people from India who’ll do what they’re told and not cost too much, and perhaps employ the sons and daughters of those in Government.

Such private companies will tend to get bigger. They get more import monopolies, like those for cars, car parts [especially lucrative], luxury goods, in fact, almost anything imported, and as a result make lots of cash quite legally. They also have ready access to capital through loans, because they are big enough to make banks comfortable or have implicit Government support, and they often own the banks anyway.

Some of those original companies are still private, some now public. For most of the companies below the range of activities and daughter companies is simply breath-taking. I’ll post more about the daughter companies later.

The impressive companies that fall into this category include:
Omzest: The mega-conglomerate of H.E. Dr. Omar Bin Abdul Muniem Al Zawawi, Special Advisor for External Liaison to His Majesty Sultan Qaboos Bin Said, and probably Oman’s richest businessman.

Zubair Corporation: The conglomerate of HE Mohammed bin Ali Al Zubair, Advisor to HM Sultan Qaboos bin Said for Economic Planning Affairs

Taylor Woodrow-Towell Co L.L.C: The conglomerate of His Excellency Maqbool bin Ali bin Sultan, Minister of Commerce and Industry.

Khimji Ramdas: a conglomerate from a long established Indian trading family in Oman

Ghalfar: The conglomerate of Sheikh Salim Saeed Hamed Al Fannah Al Araimi, just gone 40% public. (The Bahwan's have a share too I hear)

Assarain Group: The conglomerate of Sheik Al Wahaibi

Said Bahwan Group: The conglomerate of Saud Salim Bahwan

Suhail Bahwan Group: The conglomerate of Sheikh Suhail Salim Bahwan

MHD: Mohsin Haider Darwish

Yahya Enterprises: Conglomerate of Mr. Yahya Mohammed Nasib, a Governor of Central Bank of Oman CBO. Big on military supplies.

Shanfari Group: The conglomerate of ex Petroleum Minister Said Al-Shanfari. The main power in the Salalah region

OTE: Mr.Saad Bahwan, the Chairman of OTE Group, is the younger son of Mr.Suhail Bahwan

Request: Any info on the background, origins and current interests of these companies would be appreciated.

Legal Disclaimer

Undercover Dragon's Disclaimer:
Reading that previous post reminds me: always 'CYA'. Therefore, and for the record,

I hereby attest and confirm that is the absolute intent and undeflectable aim of this blog to at all times be in total compliance with the laws of the Sultanate of Oman. Any perception that this is not the case is due to an incorrect and inaccurate interpretation of the contents of this blog.

Really.

Its critical that this blog be interpreted in the true spirit of what it called 'The English sense of humour', irony, tongue in cheek, a nod's a good as a wink to a blind man, etc etc. It's a good job Monty Python and the Jon Stewart Show were/are not bound by the contraints of the law below...

Clearly the Western intellegence services should be investing far, far more heavily in Muslim comedians. A large part of the Arab population really could do with a lot more satire, jokes, and learning to laugh at themselves.

Internet Laws In Oman

Oman – The country of good news
Those who live in Oman will know that there is certainly NOT a free press of any description here. The main newspapers are owned and controlled by establishment figures and are very, very strong on selfcensorship - nothing gets reported at all that might possibly be construed as questioning Government or the establishment figures, no real crime reports, no court reports, no effective questioning of anything important. The Omani papers make the UAE and Bahrain papers seem agressive and open. Really, its that bad.

The only hope for Oman is the internet, you'd think. But wait.

Internet use in Oman is regulated by Omantel’s Terms & Conditions, which mandate that users “not carry out any unlawful activities which contradict the social, cultural, political, religious or economical values of the Sultanate of Oman or could cause harm to any third party …. Any abuse and misuse of the Internet Services through e-mail or news or by any other means shall result in the termination of the subscription and may result in the proceedings of Criminal or Civil lawsuits against the Customer.”

To use the Internet, individuals, companies, and institutions are asked to sign an agreement not to publish anything that destabilizes the state; insults or criticizes the head of state or the royal family; questions trust in the justice of the government; creates hatred toward the government or any ethnicity or religion; promotes religious extremism, pornography, or violence; promotes any religious or political system that contradicts the state's system; or insults other states. Users must also agree not to promote illegal goods or prescription drugs over the Internet.

Omantel imposes additional physical restrictions on Internet access in Internet cafés. Individuals or companies wishing to open an Internet café must submit a floor plan for the proposed site. The plan must be designed so that the computer screens are visible to the floor supervisor. No closed rooms or curtains are allowed that might obstruct view of the monitors.22 Moreover, Internet café operators are asked to install proxy servers to monitor and log user activity.

for more detail see http://opennet.net/research/profiles/oman

Oman Commits to the dollar

As with the other Gulf States, Oman remains fixed to the dollar.
With more than 70% of its exports still from Oil and gas, and with the international prices for these commodities still determined in dollars, this makes sense. Oman committed to peg
Hamood Sangour Al Zadjali, the Executive President of the Central Bank of Oman, has re-iterated that the sultanate is 'firmly committed' to maintaining its peg to the US dollar, despite repeated rumours of possible revaluations by some Gulf states, reported Reuters. Al Zadjali said the peg to the greenback provided 'the strongest source of stability' and was a key factor in attracting trade and investment.
Oman: Monday, October 01 - 2007 at 07:57

However, it is giving Oman some problems. Consumer price inflation officially is now at 6% p.a., and many people feel it is way way higher, especially if you include the horrendous rent increases lately - sometimes more than 75%. The economy is effectively over-heating badly.

Oman's inflation nears 6%
Oman's annual inflation rate reached almost 6% in July, up sizeably on the 5.6% rate recorded in June, reported Reuters citing Ministry of National Economy data. The consumer price index reached 111.6 points up from 105.3 points in the same month last year. An 11.3% increase in the cost of food, beverages and tobacco in July, coupled with an 8.5% lift in rents, have been blamed for the rise in inflation.
Oman: Sunday, September 16 - 2007 at 06:50

Oman short of Gas?

Everyone thinks so, but why then has Oman given away its gas?

It is common knowledge in the Sultanate and the region that Oman is ‘short of gas’. Given that Oman has always had relatively limited gas resources, this isn’t too surprising. Right now, for example, Oman is running its LNG refineries well under capacity, despite good LNG spot markets, because they do not have enough gas.

The actions from the Ministry of Oil and Gas to stimulate gas supply recently [see the article below] are designed to try to get more of the marginal gas out of ground without risking the Government’s money to do so, because these gas fields are neither easy nor cheap to produce. I think it’s a great idea to get External Oil Companies, like BG and BP, to risk their money to produce these gas fields and allow the Government to avoid any risk. However, to do that, they have to allow the companies to make a profit if it works, and it’s likely the price will have to be more than $2/mscf.

But, what has made matters worse for Oman are the deals done over the past few years by the Ministries of Commerce and Economy to create the ‘gas based industries’ in Salalah and Sohar. To get these projects off the ground they have commited to sell gas at incredibly cheap prices, often not even allowing for inflation. To put it into context, a gas price of $0.85/Mscf – the value apparently a lot of the Sohar industries got - is equivalent to an oil price of just $5/barrel.

$5 a barrel. No wonder it makes sense to ship Aluminum Oxide in from India, turn it into Aluminum, and ship it out. And often that price has been fixed. No link to oil price. Not even inflation. Wow. What a deal.

This is gas that the country could have sold elsewhere [as LNG] for much higher returns, or could have used in a few years time to produce electricity or desalinate water. Or used right now to make cement. And it is also going to cost Oman a lot more than $0.85 per Mscf to produce gas from these marginal fields.

OK, the Oman economy needs industry to make jobs for Omanis, and to sell things other than just hydrocarbons. The Sohar developments are stimulating a whole region of the country. So maybe it is worthwhile to spend some of the large amounts of money Oman is making on the LNG by subsidising the Sohar industries with below cost gas. Not that that argument is made explicit to the people.

Still, it would be interesting to know who the shareholders are that are benefiting from this give-away price of gas, wouldn’t it? More on that to come folks…
Next post: A primer on Omani Corruption.

The Undercover Dragon


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Report: WoodMackenzie Middle East Report Upstream Insights – October 2007

Oman considers its gas options.
The Omani Ministry of Oil and Gas is considering how to best promote gas exploration and development in its onshore acreage, and help address its looming gas deficit. It is considering plans to offer at least five more blocks for exploration and appraisal by international operators, following the success of similar awards to BG and BP in 2006. If the plans are implemented, successful bidders will have the right to explore and develop some of Oman’s most gas-prospective acreage, under Exploration and Production Sharing Contracts.

Until recently, PDO was wholly responsible for exploring, producing and supplying gas on behalf of the government. In 2006, major gas fields discovered by PDO – Abu Butabul and Khazzan-Makarem - were awarded to BG and BP. This new licensing initiative is still in the planning stage but it is considered that new partners will re-vitalise gas exploration and development, and support PDO’s efforts to address the country’s gas shortfall. It would also allow PDO to focus on implementing its many conventional and enhanced oil recovery projects, to stem the decline in Oman’s oil production. Although the block areas have yet to be defined, the opportunity to explore and develop gas resources in some of Oman’s more prospective areas would attract the attention of many international companies.

Most of the areas on offer have been extensively studied by PDO, which has been successfully exploiting gas resources in Oman since the late 1970s. PDO’s efforts have intensified since 2001, when it embarked on a five year gas exploration programme. A significant volume of reserves were added, following a strategy which focused on the most promising targets and by implication, current and future prospects are likely to be more subtle and potentially lower reservoir quality.

Given the technical challenges, the fiscal terms and pricing policy on offer will need to offer the prospect of commercial projects. This will only be achieved if producers can sell the gas to the government at a price considerably above historical levels. There is no gas price benchmark in Oman, although prices have been underpinned by gas sales agreements signed with major industrial projects in the early 2000s. Gas was sold on long term contracts for approximately US$0.85/mcf.

Oman urgently requires new sources of gas, but this new initiative is unlikely to deliver significant new production before 2013. Incremental supplies from Qatar and possible imports from Iran are also unlikely before 2012.

This latest initiative may be too little too late, and in the short-term, the Sultanate will remain dependent on PDO, BP and BG to deliver gas to maintain economic growth.
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Omani Corruption

Corruption is something that officially is not often reported as a problem in Oman. And certainly on a day to day level I have not seen it at all. I would never dream of trying to bribe an ROP officer who stopped me for speeding, for example. But Omani's also talk a lot about the 'big families' and their obvious domination of business in the Sultanate. While Ministers and Undersecretaries are officially banned from some aspects of business, this is totally ineffectual, and everyone knows it.

Given the official salaries of Ministers, its strange how their sons all seem to drive some pretty fine cars... And their relatives all seem incredibly good at doing business. In this, Oman is not unlike a lot of countries I guess. Did I hear you say 'Haliburton' for instance?

But, the recent flood of cash from high oil prices, and the resulting boom in Government funded business development [the Sohar industries, ports, construction, tourism, oil and gas investment] has obviously had an impact. Where there is a river of cash, someone will fish it. There is also increasingly aggressive involvement of less scupulous countries, especially China, with senior Omani Government officials. In some cases its extremely blatent. More on that soon.

However, as His Majesty reacted when asked about corrupt Ministers and why he didn't replace them "It is better to have a fat rat than a skinny rat". A wise man indeed.

But for now, it's not just me who's noticed things are getting worse:

The Undercover dragon...

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Recently published in Arabian Business.com:
Thursday, 27 September 2007 00:07 UAE time

Middle East corruption escalatesby Dylan Bowman on Thursday, 27 September 2007 The level of corruption in Bahrain, Oman and Jordan has significantly worsened over the last year, anti-corruption coalition Transparency International said on Wednesday.

In its 2007 Corruption Perceptions Index (CPI), the organisation lumped the Middle East nations in with other countries such as Thailand, Laos and Papua New Guinea as experiencing a serious rise in dishonesty within the public sector.

“Countries with a significant worsening in perceived levels of corruption in 2007 include Austria, Bahrain, Belize, Bhutan, Jordan, Laos, Macao, Malta, Mauritius, Oman, Papua New Guinea and Thailand,” Transparency International stated.

The index ranks the degree of public sector corruption as perceived by business people and country analysts between zero and 10, with 10 being the least corrupt.
Bahrain saw its CPI score drop from 5.7 last year to 5.0 this year, putting it in 46th place along with Costa Rica and Bhutan out of 180 countries ranked in the survey. Oman and Jordan were both placed in 53rd place alongside Mauritius with a CPI score of 4.7. In 2006 Oman and Jordan had a score of 5.4 and 5.3 respectively.

No specific reasons were given for the rise in corruption in the countries.

The UAE and Qatar were judged the least corrupt countries in the region, being ranked 32nd and 34th respectively. However, the UAE saw its CPI score drop from 6.2 in 2006 to 5.7 this year, while Qatar’s score remained at 6.0.

Transparency International put Saudi Arabia as the most corrupt Gulf country in 79th position on a score of 3.4, while it judged Syria the Middle East nation with the highest level of corruption, giving the country as score of just 2.4 and placing it 138th. The least corrupt countries on the list were New Zealand, Denmark, Finland, Singapore and Sweden.

The countries with the highest levels of corruption were Somalia and Myanmar. Transparency International said there is a strong correlation between corruption and poverty.

A Dragon is born

Muscat, Oman. A great city. A city with secrets. I hope to entertain you with stories of this country and the wider events in the media, and by sharing my opinion on life here and the world in general.

At the moment the blog thing is new to me, and right now I feel newly born, just having struggled out of my shell, sort-of groggy, wondering where the hell I am. I'll start to flex my wings soon. Good morning Muscat!