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.