Saturday, August 30, 2008

Saudi keeps on chopping off heads...

While we're on the Saudi topic, there was a beheading reported by Saudi authorities a couple of days ago. Mali man beheaded for assaulting Saudi woman
Gulf News August 30, 2008, 23:36
Riyadh: The Saudi Interior Ministry has announced that authorities have beheaded a Malian man convicted of assaulting a woman and stealing her money and jewellery.

In Saturday's statement, the ministry says the man broke into a Saudi woman's home, beat her and threatened her with a knife before attempting to rape her. According to the ministry, the man also stole her money and jewellery. The man had also robbed various other stores, homes and cars.

According to an Associated Press count, the execution brings to 64 the number of people beheaded this year in the kingdom.

In 2007, Saudi was the number 1 country in the world for executions per capita. Extrapolating from the figure above for executions to date this year, 64, Saudi's execution rate has fallen by around half. Good news.

Amnesty International 2007 report
As in previous years, the vast majority of executions worldwide were carried out in a small handful of countries. In 2007, 88 per cent of all known executions took place in five countries: China, Iran, Saudi Arabia, Pakistan and the USA. Saudi Arabia had the highest number of executions per capita, followed by Iran and Libya.

Fortunately, while Oman still carries the death penalty on the statute books, executions are rare (and according to Amnesty International apparently there is only 1 person on death row in Oman, a man convicted of murder).

In addition, according to Amnesty, the last reported 'potential Prisoner of conscience' in the Sultanate, Taiba al Mawali, was released from the Women's Prison in Muscat, on 30 January, after serving a six-month prison term reduced on appeal from 18 months. Her arrest and sentencing followed her criticism of the Government following the mass arrests for treason in 2005 (over the conspiracy plot to overthrow the Government and bomb Muscat Festival, widely reported at the time).

Around 30 people were given varying prison sentences for the terrorist and seditious plot in May 2005, but were granted a royal amnesty by the Sultan of Oman on 9 June 2005. In a letter dated 13 July, the Grand Mufti of the Sultanate of Oman confirmed that all the detainees had been released. I think, given the facts as stated, Amnesty is a little off describing these guys as Prisoners of Conscience though.
You can read a recent interview with Taiba al Mawali here.

Saudi Moral police have poor IT skills and demand access to porn, social networking sites

In a classic case of 'yeah, right, sure you do' - the Saudi religious police, infamous for their stupidity, violence, and homophobic and misogynistic attitudes, have asked to have their internet filters turned off according to The Gulf News. They say its just to monitor immoral practices, naturally. (hey kids, don't try this 'oh I was just monitoring immoral practices' excuse at home, as, lets face it, it just won't wash. Blame an email virus...)

Its a sign of great relief I'm sure to many Saudis, especially the young ones, that the Commission for Promotion of Virtue and Prevention of Vice is neither internet savvy enough to get around the filters already, and that there isn't already someone monitoring them as they use myspace and facebook to talk, meet members of their desired sexual orientation in virtual space and in person, and exchange saucy webcam and phone camera shots.

Fortunately, the Chairman of the Shura didn't seem to buy the excuse either.

Exclamations of laughter from the Council members combined with lots of winking, immediately following the request, were not reported.

Religious police demand access to blocked websites
By Mariam Al Hakeem, Correspondent
Published: August 28, 2008, 23:44
Riyadh: A number of members of the religious police (the Commission for Promotion of Virtue and Prevention of Vice) have urged the Chairman of the Saudi Shura Council, Dr Saleh Bin Humaid, to enable them to have access to blocked websites to monitor immoral practices by visitors of these sites.

In an open meeting held by Dr Bin Humaid at the headquarters of the Commission in Makkah last night they justified this unexpected request by arguing that there are some male and female youngsters who exploit blocked websites to get involved in negative practices away from the eyes of the Saudi authorities.

"Since members of the Commission have no access to these blocked websites, such immoral practices cannot be pursued and put an end to," they said.

Dr Al Humaid told the Commission members to provide the relevant authorities with convincing justifications to give them to access to the blocked sites. However, he expressed doubt on the need for such a thing
"These justifications must be supported by clear evidence, otherwise there is no need for it," he said.

He said that Commission members should not think that they can correct all immoral practices in society but they have to advise society members who might listen to them.

"It is your duty to advise people and try to guide them to the right path, but you should not expect immediate results following your advice," he said. He urged them to be polite with wrong-doers and to listen to the views of others and try to strengthen relations with them.

While the Religious police focus on getting access to Penthouse, Hustler and Facebook, the Kingdom continues to lock up people for their political views. (see another Gulf News story)
Saudi group calls on rights body to stop illegal arrests of citizens
By Mariam Al Hakeem Correspondent
Published: August 28, 2008, 21:49
Riyadh: A group of citizens has urged the National Human Rights Association in Saudi Arabia to try to find a solution to the illegal arrest of Saudis, especially those who express their opinions in peaceful and civilised ways.

The group denounced the arrest of Professor Matrook Al Faleh, political science professor at King Saud University (KSU) which it described as an indication of a serious human rights violation. His family was not informed about his arrest until late at night. Dr Al Faleh was not provided with an attorney during questioning, even though Saudi law grants him that right.

Dr Al Faleh's wife, Jameela Al Aqla, said that her husband has been in prison for more than 80 days; however, he is still in solitary confinement in Al Haeer Jail. He is prohibited from receiving books, newspapers, and watching television.

Its always nice to remind myself that I'm not living in Saudi (or Yemen, or Kuwait, or Qatar, or..). Note: for those overseas, Oman does not have an equivalent of the Saudi Religious police.

So, if you get a bit down this Ramadan, with the extra-suicidal and super-rude driving that always accompanies the month of brotherly kindness; Take a breath. And repeat:
'At least I'm not in Saudi'.

Wednesday, August 27, 2008

Strikes and Unions in Oman - Neither the ROP or the International Trade Union Confederation very happy

Unions were recently made legal in Oman, reportedly in order to smooth the way for ratification of the Oman-USA Free trade agreement in the US Congress. However, the actuality of Trade Unions here doesn't really fit with what those from the West would recognise as a Union, and the International Union organisations seem to agree.

A few recent and related new items caught my eye, and my in-box.

For a start, reported a few days ago in the Arabic press, Saud Al Gabri, Head of the Federation of Workers in Oman, mentioned that the ROP were working to strengthen the 'protection' measures they have in place to protect the oil installations in the interior against the sort of labour riots or strikes recently seen in Kuwait and Dubai. (And the ROP seemed to be telling him as well to do his bit in making sure they didn't riot in the first place.)

Co-incidentally, a source in Bahwan Engineering Contractors BEC told me that, a few weeks ago there was a big incident at a BEC labour camp in the interior (near Qarn Alam), when over 500 Indian labourers effectively downed tools and blocked the entrance to the work site in protest at the circumstances surrounding the death of one of their colleagues. My source tells me that a young (29)[post-press correction: he was 39] Indian worker had suffered an apparent heart attack, and unfortunately died on the way to hospital. These things happen. But when word got back to his co-workers that the BEC ambulance transporting the poor man alledgedly had no defibulation kit and ran out of oxygen, they were a bit miffed to say the least, and promptly had a big sit-down protest. The sort of protest that one might call a strike. Such strikes are illegal in Oman, BTW, because you have to apply 3 weeks in advance for approval to strike, and even then no strikes are allowed in services considered essential to the public good (and I'm guessing that might include things like producing the nations life-blood: oil). Quite rightly, the ROP were called in to restore order by BEC management, and the ring-leaders and trouble makers behind this illegal strike rounded up and apparently shipped back to India. Hmmmm. [unfortunately I have no real evidence of this incident I can share with you, so it may be totally untrue, although I was able to confirm that a man did die of a heart attack on his way to hospital from the BEC camp there].

The original article then goes on to quote Oman Chamber of Commerce chairman Khalil Al Khanji saying that basically as far as workers rights go in Oman, everything's OK here, and that employers certainly needed to pay their workers on time and abide by their employment contracts.

In addition, Ministry of Manpower official Salem Hadrami was also quoted, reassuring us that The Omani labour law was in line with the requirements of the International Labour Organization, and that it guarantees the rights of workers, including expats. He pointed out that the Sultanate officially has authorised almost 40 trade unions so far, and that that fact guarantees the rights of workers against management abuse, and that on top of that there is general union of workers watching over everything and intervening as necessary.

So, that's alright then. [well, as long as you're not a housemaid, as you my dear are specifically excluded by that same law from the right to unionise. Sorry. And, hey! if you are a housemaid, WTF are you doing surfing the internet when you should be working!!!]

However, that statement above from the Ministry of Manpower doesn't seem consistent with the recent press release and report on Trade Unions in Oman published by the well respected INTERNATIONAL TRADE UNION CONFEDERATION (ITUC) (see exec summary below), complaining that although Oman in theory had a law allowing unions, the restrictions placed by the Government effectively made real free trade unions inoperable. Tsk tsk.

Geneva, 25 and 27 June
Press Release:

Oman has ratified only four of the eight ILO core labour standards.
Despite being a member of the ILO, the country has not ratified ILO Conventions 87, 98, 100 and 111, which are those core labour standards protecting freedom of association and collective bargaining and the elimination of discrimination in respect of employment and occupation as well as equal remuneration.

Despite some recent improvements most Omani workers, especially migrant workers, continue to be denied their basic labour rights including freedom of association and the right to collective bargaining. While the proposed Constitutive Congress of a trade union centre is currently scheduled to take place later in 2008, serious concerns remain that the government may intervene again to delay the Congress or affect its proceedings and outcome.

Discrimination exists and women continue to face many forms of social discrimination throughout the country. Foreign workers are especially vulnerable to abuse and exploitation. Child labour continues to be found in sectors of the economy such as agriculture, fishing and informal family business as well as camel racing. The legislation in force in Oman does not prohibit explicitly trafficking of people. The country is a destination and transit point for many workers that may become victims of trafficking and sexual exploitation. Foreign workers are reportedly sometimes placed in situations amounting to forced labour.

The full report makes good reading, unless you're an Indian worker hoping to actually get a decent union going I guess. The much vaunted Federation of Workers in Oman has so-far never been allowed to actually convene.
Government control over union activities persists.
The law provides
for one single federation of unions, which is not in compliance with ILO Convention 87.
However, even that federation has not yet been able to meet. Following earlier
postponement, the Constitutive Congress of a trade union centre is now scheduled to take place in September or October 2008. Serious concerns remain that the government may intervene again to delay the Congress or may interfere in its proceedings and outcome.

The report also finds the absence of legislated minimum standards unacceptable too:
Omani law does not provide for acceptable conditions of work especially with respect to minimum wages, hours of work, and occupational safety and health. Workers have no legal right to remove themselves from unsafe work conditions and maintain their jobs, and laws protecting a workers´ right not to work beyond the maximum hours defined by law are not enforced. There is no minimum wage for several categories of work.

I must admit, this sounds pretty familiar. After all, we all regularly see labourers here [Indian, Pakistani, Afgani] working on building construction sites in conditions that are totally and utterly unsafe - working many stories high on rickety scaffolding, wearing flip-flops, no harnesses, no hard hats, 7 days a week, 12+ hrs a day, and living in a shack on site...

Strangely, the normally fearless and hard-hitting Times of Oman is yet to raise the issue of this ITUC report, which is pretty blunt and factual about the piss-poor state of play in Oman for free Trade Unions. Also, I haven't seen any mention of the strike my BEC contact tells me about either, or of the preparations of the ROP to (thankfully) be able to deal firmly with any more illegal labour riots in the interior either.

Perhaps the mostly Indian writers and other staff at the ol' Times should think about forming a Union...

Some action for the job seeking graduates?

Nice story in todays outstanding Times of Oman and all the other papers on HM's chairing of a cabinet meeting at... Bait Al Barka, scene of ammassed unemployed teaching graduates. (see previous post)

It can't be coincidence that the lead item in the Oman News Agency Press release is:
On the domestic front His Majesty the Sultan reviewed the Sultanate’s educational policies and relations between human resources and available job opportunities. His Majesty the Sultan directed the government to evaluate these policies and set prospective aims according to a clear and comprehensive vision.

As with many news articles in Oman, the main 'story' is not what's actually printed but what isn't, and its relationship to what the papers think they can print. Why else would that one item make the lead with explicit mention of Education vacancies?

There have been some comments on my earlier post pointing out that some of the graduates have been doing sweet fcuk all for the past several years other than navel gazing, waiting for the Government to employ them and then bitching about how tough a deal they got. Readers: I totally agree. They should be getting their fingers out of their butts and into some work: even if that's a stint of burger flipping (obviously washing their hands first). I was mainly reporting on the sit-in happening at all, not the justness of their cause.

Also note that the offical term for such lay-abouts in general in Oman is not 'unemployed' but 'job seekers'. Such is the importance of semantics to the public debate in the Sultanate.

Its also very difficult to know in general what the actual unemployment rate of Oman is. An oft quoted semi-offical number is 15%, apparently from a 2004 estimate. Many other sources simply state 'Unemployment Rate: NA%', which is at least more accurate. A recent Government official put it at 5-6% as recently posted, but I don't think anyone who isn't high on crack actually considers this to bear any connection to reality. There is also no clarity on whether its men only (a common trick to get the numbers down), or just officially registered 'job seekers', or includes housewives who would take a job.

And it certainly doesn't count the vast swathes of underemployment - the morose and useless 'customer assistance' Omani girls wandering around Centerpoint, the PROs [public relations officers or gophers], the many taxi drivers or fishermen or farmers, all eeking out a subsistence income.

But with at least 80,000 high school graduates hitting the job market every year, its hard to believe the rate is going down...

Monday, August 25, 2008

Protests: Something you won't be reading in the papers it seems

Recent teacher training graduates from SQU have been holding a huge 'sit-in' outside His Majesty's paalace at Barka, going on for several days (and nights) now. Nothing reported in any of the papers, naturally.

You'll notice perhaps the lack of signs or banners. Ahhh, these guys and gals are smarter than that: that would officially constitute a protest, and leave them open to being 'moved on' by the ROP.

They are, with all due respect, seeking to ask HM for some assistance in their engagement with the Ministry of Education, in whom they have reportedly lost faith after years of unanswered letters, unkept promises and botched administrative systems. They are basically tired of being screwed around. They want jobs teaching in Omani schools, and none seem to be forthcoming.

This is not a common sight in Oman. Anyone with any more info?

Inbreeding in Oman - a health warning

A nice SQU study shows how the social preference for inbreeding in Oman is probably related to many of the health problems, including diabetes and birth defects. Although the headline blames 'The modern lifestyle', of course in-breeding is anything but a modern phenomena in the Sultanate.

In-breeding, know scientifically as Consanguineous Marriage, is a demonstrable health problem all over the world. And we all know how common it is in Oman for marriages to be between first cousins.

Modern lifestyle 'brings new challenges'
Published: August 24, 2008, 23:28
Muscat: A study conducted among patients with coronary heart disease in Muscat suggests that people with hypertension, diabetes mellitus, and a family history of coronary heart disease, consanguinity and sedentary occupations are to be considered at high risk of developing the disease.

In addition to lifestyle, the study points out that the tradition and custom of marrying close relatives also contributes to this emerging problem. Consanguinity is quite common with 34 per cent of women married to first cousins and 20 per cent married to other relations.

Inbreeding can, and has, been measured. Here's a map.
Oman rates relatively high globally at around 35% on this map, although not at the top. However, Dr. S Joshi, Senior Consultant at SQU Hospital in a presentation given in Morocco in 2006 stated Oman's rate is a shocking 52%, with 38% 'first degree' - ie first cousins.
Given the inexorable rise in diabetes in Oman, and the cultural preferences for inbreeding, perhaps it time for Oman Health authorities to boost the resources and advertising associated with their programme of genetic counseling (and testing) for prospective spouses? (this service is supposedly available...
Premarital counseling clinics are available in all regional hospitals in the Sultanate. Doctors in primary health care institutions can organize the referral.

And perhaps the Government should also be far more active to encourage marriage between people who are, well, not related? (and not just leave it to the Omani girls and boys currently meeting in the Sultanate's shopping malls and fast food joints on the quiet!).

Not only would it improve the genetic health of the population, it would also act to break down many of the tribal barriers that remain very strong here and act to divide the loyalities of people between nation and tribe.

Sunday, August 24, 2008

Oman in need of importing coal and Oman's gas shortage

Oman is continuing its push for coal fired power, according to officials at the Ministry of Oil and Gas. This is because there is not enough gas, and compared to the prices for imports, coal is supposedly a reasonable option (although expensive, requiring a huge upfront capital investment) - see article below quoting one 'Zaid Al Siyabi director general of exploration at the MOG'. [Actually this is Dr. Al Siyabi, and he's director general of oil and gas development at the MOG. I find it also a bit strange that such reports are coming from the Ministry of Oil and Gas, as coal is neither gas nor oil, and electricity I thought was somebody elses problem... Anyhow.]

Hence the expectation of having to get overseas investors to build the plant, and take the risk on coal prices. What will be interesting is what kind of coal plant - ie a big old school beast, or a high tech so-called clean coal plant (lots more expensive to build)? The emissions will just sail across the Indian Ocean anyhow, and Oman is not constrained by Kyoto limits.

One crafty option is for the Government to plan to build a big smelly old type, and then sell the carbon credits to the developed Kyoto countries for the upgrade to the actual clean technology, getting a nice cheque in the process.

This will be an interesting project to track as it progresses as to who gets involved. The other advantage of a coal plant is a lot more of the cost is spent with internal building contractors compared to a small General Electric gas turbine power station.

Note that Oman does not have any significant coal resources. It'll all have to be imported.

Arabia News Reuters
Oman turns to coal for power
Muscat: Mon, 18 Aug 2008

Oman plans to build coal-fired power plants to beat a shortage of gas to fuel future projects for economic diversification, an Oil and Gas Ministry official said on Monday.

The Gulf is the world's biggest oil exporting region, but has been slow to develop massive gas reserves. Rapid economic growth has absorbed fuel supplies and left all the countries in the region except Qatar short of gas.

"It makes a lot of sense to build coal-fired power plants as an alternative to gas since we don't have enough gas to fuel all of our future projects," Zaid Al Siyabi, director general of exploration at the ministry, told Reuters.

"This is the future. Coal is cheaper to import and at the same time we can use our gas for other purposes like the export of LNG," he added.

Faced with spiralling power demand, regional governments are considering alternatives to gas to generate electricity, such as nuclear and coal plants. Oman's neighbour the United Arab Emirates became the first Gulf country to move ahead with plans for a coal plant last month.

Oman exports nearly 10 million tons of liquefied natural gas (LNG) per year from four trains, but has struggled to meet its LNG contract commitments as domestic demand rises. LNG is gas chilled to liquid form for export on specially-designed tankers.

Oman wants foreign investors to build its first 1,000 megawatt coal-fired plants at Duqm, where the sultanate is developing an industrial zone. - Reuters

Of course, Oman has chosen to also use its gas for other purposes than LNG as well, like the subsidised aluminum smelter and the methanol plants. The gas for these projects, my sources tell me, has been sold at much, much lower prices than the equivalent cost of importing coal for power, the price of imported gas, or than is paid for the LNG exports.

And I wonder who is going to pay for the expensive (compared to current power prices)power from the coal fired station?

The Economist has a nice article giving a pretty balanced view on coal. At international prices, coal - even after recent price rises - is the cheapest way to generate electricity per BTU, but the capital costs make it a finely balanced proposition. And its also by far the most polluting way, even with updated designs of standard plant. And worryingly, coal supply is getting pretty tight, not because of resources, but because we're currently digging it up about as fast as we can with current infrastructure.
Apparently even China is now a net importer of coal, despite being the world's largest producer. The big proven reserves of the stuff are in Australia, China, Russia, and the largest in USA (ironically enough). (actually, if you're willing to pay a lot for the plant, the most green friendly coal solution is to first the gassify the coal and then use a hydrogen gas turbine to generate electricity. The advantage of this design is not only is it clean, but you get a relatively pure CO2 source for sequestration, which is very expensive in a standard plant because most of the flue gas is Nitrogen. But I suspect its waaaay to expensive for Oman...).

And for these reasons not everyone thinks coal is a good idea.
Building more coal-fired power plants: big mistake

Environmental expert explains why investors and power companies getting fired up for coal growth will get burned financially
By Tobin Hack

The coal industry may be a ticking time bomb for energy investors, power companies, and taxpayers, says a new report entitled “Don’t Get Burned: The Risks of Investing in New Coal-Fired Generating Facilities.” Prepared for the Interfaith Center on Corporate Responsibility, an international coalition of 275 faith-based institutional investors, by Synapse Energy Economics, Inc, the report warns against Bush’s proposal to grant $8 billion in subsidies to coal, and opposes the roughly 130 new US coal-fired power plants slated for construction over the next two decades. Michael Dworkin, director of University of Vermont Law School’s Institute for Energy and the Environment, wrote a foreword for the report. Dworkin helped present the report to security generals, investors, and members of the media in New York this February at a briefing for the New York Society of Security Analysts. Plenty caught up with him, to discuss coal’s potentially bleak horizons.

What risks does coal-industry growth pose for American taxpayers?

There are two, maybe three kinds of risk here. One is that there will be a lot of money lost. Another is that there will be significant harm to the climate because of carbon emissions. A third is that other environmental harms will result from increased coal combustion. That includes mercury, asthma, tuberculosis, and other problems associated with lung diseases. Most high carbon coals have a lot of mercury within them, so when it’s burned, the mercury is released in the atmosphere. In fact, the major source of mercury in the air is the combustion of coal for fossil-fired plants.

Is carbon regulation the main reason the report calls coal a risky investment from here on out?

Carbon regulation is the biggest and most obvious factor, but not the only one. The rising costs of plant construction and coal transportation are also a major factor: New cost estimates are far higher than the old cost estimates. Coal-fired power plants were expected to cost approximately $1 billion apiece to build, but the big ones are costing closer to $3 billion apiece. Early cost estimates looked at what would happen if each plant was built by itself, but if we build dozens at a time, the competition for engineers and steel and concrete becomes very acute. So there’s major international competition going on.

In terms of fuel price, a lot of these plants are being built because people estimated that the price of coal would be relatively low for years to come, but coal prices today are about twice what they were two years ago. And US coal is now being sold overseas—put on ships and taken to markets that really need it and are willing to bid a higher price than we’ve been used to seeing. That’s a problem especially because when analysts predict that these plants are cost-effective, they’re assuming 30-50 years to pay off the bonds raised to construct them. In other words, the plants only make sense if you think that the fuel will be accessible for the next 40-50 years.

Iranian Military in town

The Iranians are in town this week to have the annual joint military committee meeting. I'd be interested to hear the discussions on the straights of Hormuz, given the recent reports of how tensions remain high.
Mehr News
Iran-Oman joint military committee to meet this week
TEHRAN, Aug. 22 (MNA) – Iran’s Ambassador to Oman, Morteza Rahimi, on Wednesday said the seventh meeting of Iran-Oman joint military committee will be held this week in Muscat.
“This meeting is held annually and will last for three days,” he told the Fars News Agency.

The committee’s last meeting was held in Tehran last December.

Oman has long had reasonably good relationships with Tehran, especially with the old school military establishment (as opposed to the revolutionary guard). Iranian troups and military aid assisted HM in his problems with the communist insurgency in the 70s. These days Oman is playing a huge role in trying to bridge the gap between Iran and the USA, with the shared strategic interest of Hormuz to bring it to the table as an honest broker.

In addition, Oman helps the sanctions problem a little by turning a blind eye (and actually taxing) much of the small trade in computers and car parts from Kasab across to Iran.

HM makes Forbes Royal Rich List

In the news yesterday, His Majesty Sultan Qaboos makes the Forbes List of The World's Richest Royals, in 10th spot with an estimated $1.1 billion, behind Prince Albert of Monaco. He also made the ‘cover photo’ of the article, which is not surprising as, IMHO, he is clearly the best looking of all the Royals listed.

Following is Forbes’ ranking of the world’s richest royals:
1. $35 bln King Bhumibol Adulyadej (Thailand)
2. $23 bln Sheikh Khalifa bin Zayed al-Nahayan (United Arab Emirates)
3. $21 bln King Abdullah (Saudi Arabia)
4. $20 bln Sultan Hassanal Bolkiah (Brunei)
5. $18bln Sheikh Mohammed Bin Rashid al-Maktoum (Dubai)
6. $5 bln Prince Hans Adam II (Liechtenstein)
7. $2 bln Sheikh Hamad bin Khalifa al-Thani (Qatar)
8. $1.5 bln King Mohammed VI (Morocco)
9. $1.4 bln Prince Albert II (Monaco)
10. $1.1 bln Sultan Qaboos bin Said (Oman)
11. $1 bln Prince Karim Al Husseini (Agha Khan)
12. $650 mln Queen Elizabeth (Britain)
13. $500 mln Sheikh Sabah al-Ahmad al-Sabah (Kuwait)
14. $300 mln Queen Beatrix (Netherlands)
15. $200 mln King Mswati III (Swaziland)

While I suspect if anything the Forbes estimate is a little low, given the recent oil prices, one has to remember that HM tends to use his personal income in large part to provide such gifts as free housing and other things to the people, built the Grand Mosque out of his own pocket, plus he has a very large number of associated Omani Royals to look after too.

Note the important disclaimer:

Keep in mind that the wealth of the royals comes from inheritances or positions of power; it is often shared with extended families and often represents money controlled by them in trust for their nation or territory. For these reasons, none of the 15 royals on this list would qualify for our annual ranking of the world's billionaires, regardless of their net worth.

Because of technical and idiosyncratic oddities in the exact relationship between individual and state wealth, these estimates are perforce a blend of art and science.

Friday, August 22, 2008

Oman crude price proving too volatile

Looks like the DME trading on Omani crude is proving far too volatile and illiquid for the global oil traders with Oman's medium heavy & sour crude price recently spiking way above Brent and WTI sweet crudes, so they are looking at making a 'synthetic' Omani blend based on Abu Dhabi and Qatari crudes.

The reason everyone is so worried about Omani crude is that, although the volume sold on the markets is only ~500,000bbl/d, the price is used as a benchmark for the prices paid for a lot of other Arabian crude traded in the far east on long term contracts. That means Omani crude prices control indirectly the price of more than 12 million bbls of world crude.

It also leaves open a strong temptation - and the small volume provides the ability - for major players to try and manipulate the price.

Not good news for Omani crude - this was a big part of the decision to float Omani crude contracts on the youthful Dubai Mercantile Exchange [DME] in the first place.
Platts report
Platts looks to cap Oman crude price after July jump
SINGAPORE, Aug 20 (Reuters) - Platts is looking to revamp its pricing methodology for Oman crude after the Middle Eastern oil benchmark surged above global markers Brent and NYMEX, company officials said on Wednesday.
The Energy pricing agency is considering authorising deliveries of alternative Middle East crude -- likely Abu Dhabi or Qatari, the only other Gulf grades that can be traded freely on the spot market -- into Oman contracts to help cap its price.
Platts, a unit of the McGraw-Hill Cos would allow the alternatives to be delivered in lieu of Oman in trades conducted during the 0800-0830 GMT Platts trading window, which provides the basis for crude assessments.
It is also weighing the creation of the so-called "synthetic Oman", which would combine two Middle Eastern grades to produce a quality close to Oman.
"Oman in our mind ceased to work as a benchmark last month," Jorge Montepeque, Platts' global director of market reporting, told a pricing forum.
Oman crude prices rose above Brent prices for three days in a row last month. Platts' assessments of Oman crude was at the most extreme on July 28 at $129 a barrel, $4.50 above Brent and some $9.00 above Dubai prices.

Speechless.. How not to have an internet business: Smart Oman oxymoron website

I'm struggling here... with what to say about the website I guess I should be encouraging such clear and shameless entrepreneurial spirit: the enthusiasm, the many many informative (and free) articles, the whole net thing man, like, advertising, you know? And I'd certainly like whoever's financing the venture (?daddy?) to come to the aid of some of MY business ideas with wads of cash... but this is just way too amateur hour. Really. It is.

I can't even figure out how I got here... or even here but, there you go, the power of the internet I guess. I did, and I'm... well... *&%(*%(*^%(*^%

where do I start?

Ok. Free advice? Albert:
1/ If you want to do your thing - whatever it is - in English, get an employee who actually speaks English as an (almost) native language! Real English, I mean, like, not something else transliterated (like say Arabic or Hindi)
2/ Try not to have every page (and even the press release, see below) come across like a google translated page (oh, see point 1).
3/ You're obviously trying to do something, I just wish I knew what it was. I mean for your customers, obviously. I know what YOU are trying to do, which is make a quick buck on the internet, or at least convince who ever is paying the bills that there is a quick buck. Wake up - this is no longer 1998.
4/ Drop the whole 'by-line' thing on the articles. It doesn't add anything. Really. 'By Bhaskar Bhattacharjee' or 'By Albert Fahil' or 'By Aysha Mariyam' or 'By V.Sukumaran'.. like we care? OK, if your friends write articles and want a by line to do it for free, or for class credit, just put it at the bottom, OK?
5/ Yes, we all can agree Rozalin Al-Bulushi looks cute. I'm just not sure the whole 'she's female so let's concentrate on her beauty' thing is what she wants to stress with regard to her business model.
6/ Spell check, spell check. IE Fassion (main heading, home page, smart Oman)- you mean Fashion.

Oh, fuck it. Just read the press release for a laugh, and visit the web site smart oman. I've had more understandable English on the instructions from a Chinese product safety warning. Albert has another one called Same html code, and the same articles basically. Probably a too, hey Why not? But I couldn't be arsed to even check.

Albert - was that an on-line MBA? And please introduce me to your dad.
Press Release The Business Machine
Aug 18 2008 -

For the first time in Oman, a highly comprehensive and professional website is on the cyberspace with the idea of promoting every business in the city. This aims to create common business platform and approach different class of business community at their ease.

The website, is with lot of potential to make a mark on online media and establish as strong international media brand.

This is the time for investing in Oman, the time that most high profile organizations, institutions, keep their eyes on Oman.

That creates for existing local companies more challenging environment.

That is where the is perfectly fit with the scene. Since most businesses in the prevailing world depend on the 24/7 online media, there is no exception to Oman. It is the easiest, most cost effective way to communicate to date.

An article on a international website such as can make a world of difference to a product or to a business no matter small or large.

Browsing through is easy, informative and pleasant. Whether it is tourism, education, real estate, health, law, management, or fashion the has a place, a place to promote, to advertise, to sell, to contact, to invest, or just to gain knowledge.

The city guide is the place where a tourist can gain complete information on where he has finally come and to where he has to follow on to go to the right place. In the same way, it is where businessmen of tourism industry can gain full coverage to their ventures effectively and attract more and more customers easily.

The articles with videos to emphasize the ideas and articles with slide shows to give variety of tastes on what you are reading are major features of the website while City Brief, short business news give fullest idea in the live business news in the city.

City Offers is one of the most attractive link in the while the sections such as Features, Smart Forum, Public Voice, Property Videos, and Notice Board cover all most all of the areas of Oman's business world and social world as well.

The is the online work station surely the business community can depend on while the portal to do the talking. The site is exclusive and does exclusive promotional activities online.

So take a minute and visit the site, the first of its kind, and contact the site, the business portal.

Not convinced you want your business on smart Oman? Oh come on! The rates are really reasonable! Give old Albert a break. Here's the ad rates for the site...
Rates on home page. ( per month )
1. Horizontal banners ( upper main ) US$ 2000
2. Horizontal banners ( main ) US$ 2500
3. Horizontal middle page US$ 2000
4. Skyscraper first US$ 2500
5. Skyscraper second US$ 2000
Home page visibility max plan any two ad positions US$ 3500
All other news pages ( per month ) run on network
1. Horizontal banners ( upper main ) US$ 1000
2. Horizontal banners ( main ) US$ 1500
3. Horizontal middle page US$ 1000
4. Skyscraper first US$ 1500
5. Skyscraper second US$ 1000
Business pages visibility max plan any two ad positions plus mid article
ad for US$ 2500
All pages product and real estate property video/ animation listings. US$ 1000 per video
( one minute )
On interactive pages , Smart Forum, Message board, PublicVoice will be same as City Guide rates.
CityGuide ad rates.
Dubai City Guide ( Per month run on network )
1 Horizontal banners ( upper main ) US$ 1000
2 Horizontal banners ( main ) US$ 1500
3 Horizontal middle page US$ 1000
4 Skyscraper first US$ 1500
5. Skyscraper second US$ 1000
City guide visibility max plan any two ad positions US$ 2000
Sponsored listings on CityGuide US$ 150 per year. ( example , ‘ABC taxies’ at Dubai city > services > taxies listings. )
If you want us to design your Ad, design fee will be 150 US$.
For direct advertising please contact
Ad partner discount will be 10% from list rate for the 2nd and onwards when advertising gap is less than 90 days.

I wish I was getting 5 % for every hit this link is giving old Albert, I'll tell ya...

Thursday, August 21, 2008

Sheikh Bahwan dies in Paris, aged 68

Big news in the papers yesterday and today is the sad death of Sheikh Saud bin Salim Bin Abdullah Bahwan, in a hospital in Paris. (why Paris? He has lived there essentially full time for many years).

The Sheikh was a tremendous pillar of the Omani Business Establishment, working his way up the hard way as a trader from the time he was a small boy. Self educated, hard working, and obviously extremely canny, his death represents a tremendous loss to the Omani pool of senior business talent. I think the example he set of working your ass off is something many of todays young wanna-be Omani business men could emulate.

What I liked about Sheikh Bahwan is that he was very much a self made man. His effective monopoly of the best brand of cars in the world - Toyota - was a powerhouse business model, and he built the brand (and others, such as MAN trucks) to be far and away the dominant vehicles of choice for Omani and expatriates.

In later years he was also a key figure of philanthropy too, which has to be admired.
I hope his sons can continue the tradition.

Note: Perhaps someone could also appropriately update the Saud Bahwan group website too - I'm a bit surprised that this has been left as it was before his departure.

Conspiracy nut case? No problem, the Times of Oman will get you published!

Yes, the throbbing media organ that is The Times of Oman continued its great tradition of fearlessly printing the hard opinions that fly in the face of the established great powers.
This classic was published in today's edition in the letters section, where one Zainab Z. Navaee (from Al Khuwair) says that Al Qaeda, who claimed responsibility for the recent Algerian suicide bombing, is obviously an outfit of the US Intelligence services.

Yep. I KNOW! Now that you've read it, its obvious isn't it? Everybody knows that any and all ills that affect the Muslim nations are due to good ol' American Imperialism. (well, when its not the Israelis, Zionists, French or UK imperialists, etc etc). Especially such things as right-wing Islamic militants who have been fighting there for decades.

You gotta laugh.

Wednesday, August 20, 2008

Apparently not a dead cat bounce?

Following the precipitous falls of last week, this week the MSM market continued to climb again as the institutions piled in, and as the IPO for Sohar power (heavily oversubscribed) released lots of unused deposit money back to small investors.

The climb back was greeted with some relief in the corridors of power, given the number of small investors in the market, and the extent to which middle class Omanis have piled into the bull market over the past 18 months. It was starting to look scary.

A couple of days ago, once the dust began to settle somewhat, Khalil Al Khonji, chairman of the Oman Chamber of Commerce and Industry, launched into the press to reassure the public on the market (see extract below), calling the drop 'unnatural', and urging people not to panic and to talk to their brokers. Which is natural I guess, but a worrying indication. Markets go up and down. And brokers always think the time to buy is now. Regional markets have seen some big drops of late.
Times Article
Al Khonji reassures investors at MSM
Times Sunday, August 17, 2008
MUSCAT — Khalil bin Abdullah Al Khonji, chairman of the Oman Chamber of Commerce and Industry (OCCI), assured capital market investors that the laws and regulations that govern trading at Muscat Securities Market (MSM) are transparent and provide all investors with equal opportunity to have access to information and take knowledge-based decisions.

“The current slump in the market is unnatural and, therefore, there is nothing that deter people from investing in the market,” he added.

Al Khonji urged pension funds, banks and investors to exploit the opportunity and invest in the market as the market is now doing well in terms of transparency and corporate government.

“MSM is still the best performing capital market in the AGCC states in terms of investment revenues compared to other markets,” he added. “There is a big difference between the slump in 1997 and the current one because the former was mainly attributed to unjustified sales by foreign funds leading to excess supply and low demand,” he added. The slump does not reflect the actual performance of the market and the positive gains by various public and private companies.

“All SMS investors are required not to do so after rumours and benefit from the services provided by the financial consultancy firms and brokers so that they can take the right investment decision,” he said. Al Khonji highlighted the role of brokers and urged the investors not to take any hasty sale decisions.

But the danger signs are all around I fear. Oman is now seeing the advent of many 'day trading' Omanis, buying and selling on the volatility and on the back of a bull market to make a reasonable income. And all and sundry have been pulled into the market by the recent 'free money' IPO trends, as well as the huge bull run the MSM has had over the past 2 years. A drop was to be expected. And its also unreasonable to expect the market to grow - on the basis of long term fundamentals - at more than ~10% per year. When the coffee boy is giving you stock advice, and the OCCI is urging people to stick with the market, its usually a sign of a bull run that's hit its peak.
So, again, my advice is to look for buying opportunities in quality stocks with strong business models and cash flow (e.g. Bank Muscat, Galfar, Renaissance), and invest for real growth, not anticipate a continuation of 50% pa gains across the swath of the market.

Tuesday, August 19, 2008

We all love a critic

One thing that sort of pisses me off is hypocrisy. Especially when it's served with a side order of 'holier than thou'.

Last week the reliably flaky - but always as muslim as you can be and usually a bit more - Balqis posted on the English Omani sabla about how invasive and totally out of line with the sensibilities of Omani society the Dragon had been posting about His Majesty's yacht here.

What she neglected to point out while bitching about how much of an affront this post was, she that was herself busy giving a day by day, blow by blow of HM's entire (and personal, not State) trip to Italy including pictures of HM and even more comments about, and pictures of, his yacht. LOL. What a total muppet. Enjoy!

Monday, August 18, 2008

UAE hit by white collar crime investigations

The UAE is making a big push on corruption, with several high profile real estate company execs in trouble with the police, ministers being charged, and even an Abu Dhabi policeman too.

Its true that so far, everything points to individuals abusing their positions to fill their boots. Where-ever there's a river of cash, someone will always try to divert a bit here and there.

Dubai sets top priority as war on corruption
Bradley Hope
Last Updated: August 18. 2008 12:32AM UAE / August 17. 2008 8:32PM GMT
The investigation has received widespread publicity and the shares of companies where questioned executives have worked have fallen sharply.
On the heels of criminal investigations into two senior businessmen in Dubai, the Public Prosecutor’s Office said that “fighting corruption is at the top of the [Dubai] Government’s priorities”.

The unusual public statement, released through the media office of Dubai’s Ruler, was the first formal acknowledgement that the emirate’s authorities are conducting a series of investigations aimed at alleged white-collar financial improprieties.

“Any employee exploiting his position to make illegal profits will not have immunity,” the prosecutor said. “The strictness with which some violations that emerged in the recent past were dealt with confirms the Government’s commitment to maintaining the highest global standards in fighting corruption and enhancing its achievements in the economic, financial and legislative fields.”

The statement came just days after it was revealed that two businessmen – Adel al Shirawi, the vice chairman of Istithmar World and former chief executive of Tamweel, and Walid al Jaziri, the general manager of sales at Nakheel – were being questioned on allegations of financial irregularities. The investigation has received widespread publicity and the shares of companies where questioned executives have worked have fallen sharply.

“The Government will continue to have a strict stance against all aspects of corruption and will take legal measures against violators,” said the statement, which was distributed by the media office of Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai. “There will be no tolerance shown to anybody who tries to exploit his position to make illegal profits.”

The Government of Dubai’s investigation into corruption first emerged publicly in April and has revolved around some of the biggest corporate names in the city, although all of the companies say the investigations concern alleged improprieties by individuals, not corporate behaviour.

Zack Shahin, the former chief executive of Deyaar Development, was arrested in April on charges of fraud. The investigation was then expanded to include Dubai Islamic Bank and other senior businessmen were arrested.

Mr Shahin has maintained his innocence. Mr Shirawi and Mr Jaziri have not been available for comment.

While the arrests have been widely reported, prosecutors have released no details or evidence supporting allegations of improprieties against any of those arrested or questioned. The Public Prosecutor’s Office said the results of the “ongoing investigation” would be announced when they were complete.

“The Dubai Government follows a transparent and clear policy on such issues,” the statement said. “There are strict directives to have zero-tolerance towards all aspects of corruption, bribing and taking advantage of officials’ positions.”

Nasser bin Hassan al Shaikh, the chairman of Deyaar Development and Amlak Finance, said he offered his “complete commitment” to the highest standards of corporate governance, which he characterised as “central to Dubai’s enduring legislative and economic success story”.

Official acknowledgement of the white-collar investigations comes as shadows fall over the local property market.
There was the report in the Gulf News that real estate giant Nakheel's general manager of sales, Walid Al Jaziri, is being questioned by authorities for taking kickbacks. Nakheel is the Dubai World company behind the three huge Palm Islands projects.

Real Estate company Tamweel is in trouble too. The Dubai police have confirmed that Tamweel's former CEO Adel Al Shirawi faces investigation for fraud and possible embezzlement, which is interesting as its a publically traded share (now being dumped by investors), yet over the past weeks Tamweel has apparently issued two separate denials of any such investigation. The company, listed on the Dubai Financial Market, told officials there that it "has received no formal notification of such an investigation from relevant authorities". Hmmm. Is mis-leading the market also crime in Dubai? Gulf News
Published: August 14, 2008, 16:11
Dubai: Tamweel PJSC's former chief executive officer Adel Al Shirawi is under investigation by the Dubai public prosecution's office for alleged financial wrongdoing, a Dubai police official said.

Al Shirawi is being investigated for alleged embezzlement and mistrust while employed by the UAE's biggest mortgage provider, Saleh Hamed, head of Bur Dubai police, said in a telephone interview on Thursday.

The Dubai police have referred the case to the emirate's public prosecution office, he said.

Al Shirawi was arrested on Aug. 5 as part of the investigation, Zawya Dow Jones reported, citing an unidentified Dubai police official.

It would be good if this new found transparency spread to Oman too. Its all to common that I hear how the everday 'man in the street' in Oman assumes that many of those in positions of public authority and trust are enriching themselves at the expense of the public purse. This does not mean they think its endemic, but not as uncommon as claimed. But what is more concerning is the apparent acceptance by many Omani's I talk to that such dealings are unsurprising and that nothing will be done about them.

My hope is similar to blogger Sultan Al Qassimi that this recent trend of official investigation and action in the parts of the GCC will continue and spread(see the recent Kuwaiti Crown Prince efforts).

Corruption is a scurge across the world. It would be great to see Oman lift the public profile of its anti-corruption efforts and show the public that Oman too means business when talking about stopping corruption in both Government Offices and publically traded companies. There were no official reports on the bribery allegations made in Europe that Ericsson had bribed an ex-Omani Minister of Communication. And of course the media here didn't report it either. This has to change. And I don't mean announcements of a workshop, but, as we are seeing elsewhere, actual prosecutions and publically reported investigations.

Oh, but then, there isn't any corruption in Oman. I forgot.

Except if you look at the Transparency International 2007 CORRUPTION PERCEPTIONS INDEX where countires are scored from 0 (v corrupt) to 10 (no corruption at all), Oman scored 4.7, ranking it 53rd and similar to Greece and Jordan. OK, not bad you might say, and I'd agree. But hardly virginal. (UAE was 34th by the way...)

Sunday, August 17, 2008

No news!!

yes, its the summer and no big news in Oman these past two days.

Ah well. At least the market recovered a bit once the pension funds moved in.

Friday, August 15, 2008

Macki gets the cheque book out in Libya

In more local news, Oman agreed to form a $500 million joint investment company with Libya during the visit by His Majesty and senior Omani Government officials.

Hey, why not? Its obviously not proving easy to spend all the money Oman is currently coining with the high oil prices. The Government is already spending as much, if not more, than it sensibly can in Oman without the economy running white hot with inflation and running out of materials (and opportunities). And the main Government investment funds are also straining to find investment opportunities that meet the criteria.

So, this offers a quick spend of $250mln, a source of leverage and opportunity in a country with strong prospects for long-term growth, and a nice diplomatic coup for HM. There will undoubtedly also be opportunities for investments in Libya's upstream oil and gas sector, as the spending and exploration programs of the newly re-invited oil majors start to seek traction. Thus, I'd expect a potential follow through in Libya for companies like Renaissance Services, MB Petroleum, Galfar and Al Turki, as well as perhaps opportunities in pipe supply, real estate development, tourism etc.

Nice one.
ultanate, Libya ink MoU on joint venture
TRIPOLI As part of His Majesty Sultan Qaboos Bin Said’s visit to Libya, the Sultanate's government and the Libyan government signed a Memora-ndum of Understanding (MoU) on Wednesday to establish a joint holding company with a capital of $500 million at its headquarters in Tripoli.

The agreement was signed on behalf of the Sultanate's government by HE Ahmed Bin Abdul nabi Macki, Minister of National Economy and Supervisor of the Ministry of Finance, and Dr Ali Abdul Aziz Al Isawi, Secretary of the General People's Committee for Economy, Trade and Investment on behalf of the Libyan government. The ceremony was attended by Dr Al Baghdadi Ali Al Mahmoudi, Secretary-General of the General People's Committee.

"The MoU comes as crown and translation of His Majesty Sultan Qaboos Bin Said's visit to Libya and desire of the two countries to enhance and develop the existing cooperation in different domains, especially in economic and joint investment fields, said Macki.

"The aim of the joint holding company is to explore investment opportunities in industry, trade, tourism, real estate and banking institutions in both countries,” he added.

"The incorporation of a multi-purpose company is aimed at exploring investment opportunities that can develop economy in both countries,” he added.

The two sides agreed to establish a joint committee that will prepare the incorporation agreement of the holding company and explore the potential investment opportunities that can be undertaken by the proposed company.

Thursday, August 14, 2008

Israeli involvement in Georgia confirmed. Pentagon again cool things down

Reports in the Israeli newspaper Haaretz confirmed the involvement of Israeli companies in providing training and arms sales to Georgia. Not actually too unusual perhaps, as arms sales are a huge component of Israels exports. (note that the Russians shot down 3 Georgian drones yesterday).

The report also confirms web reports that 2 of the Georgian cabinet (including the Defense Minister) are, if not Israeli, Zionist Jews with very close ties to Israel. It seems the Georgian President is trying to confirm they are Israeli, while the Israelis are trying to counter claim that they are certainly not.

Georgia president denies Israel halted military aid due to war
By Anshel Pfeffer, Haaretz Correspondent

Georgian President Mikheil Saakashvili denied on Wednesday night that Israel has suspended its military aid to the country. "I haven't heard anything about that, and I haven't had time to think about that issue for some days," he told Haaretz.

Saakashvili said he is aware of problems with supplying the pilotless drones that his army ordered from Israeli companies, but not of the stopping of any other shipments of military aid.

"The Israeli weapons have proved very effective," he said at a press conference at his office. When asked whether the Israeli arms played a role in the military successes he claimed the Georgian army had achieved, he joked: "Are you asking me as a representative of Elbit or of Israel Aerospace Industries?"

To a reporter's question about Jews who have fled the fighting and come to Israel, he said: "We have two Israeli cabinet ministers, one deals with war [Defense Minister David Kezerashvili], and the other with negotiations [State Minister for Territorial Integration Temur Yakobashvili], and that is the Israeli involvement here: Both war and peace are in the hands of Israeli Jews."

Yakobashvili is actually not an Israeli citizen. Saakashvili's statements are part of his government's attempt to bring other countries into its war against Russia. During the briefing, Saakashvili noted that he is in constant contact with U.S. Vice President Dick Cheney and Secretary of State Condoleezza Rice. He promised that U.S. warships would be docking in Georgian ports within a few days to make sure they remain open.

Saakashvili tried to project confidence during the interview, but could not completely hide the stress he is under. A few hours earlier, refugees from Gori held a spontaneous demonstration in front of parliament, calling for Saakashvili to resign. ...

President Saakashvili himself is no paragon of democracy either, having instigated a big crack down on the opposition in Georgia late last year, and clearly acting somewhat precipitously in Sth Ossetia by triggering what would obviously be a firm Russian smack-down.

He's also trying hard to pull the US into the conflict, by claiming the US would be taking control of Georgia's air and sea ports. See this report in The Tribune Tribune
(note the headline is misleading)

Also note, once again, it's the Pentagon who are pouring the ice water, not the Bush Administration.
US ‘to take control’ of Georgian sea, airports
President George W. Bush’s pledge to send aid to Georgia means that the US military will take control of the ex-Soviet state’s ports and airports, Georgian President Mikheil Saakashvili said on Wednesday.

But the Pentagon denied it planned any such action to proceed with deliveries of humanitarian aid.

“You have heard the statement by the US president that the United States is starting a military-humanitarian operation in Georgia,” Saakashvili said in a television address.

“It means that Georgian ports and airports will be taken under the control of the US defence ministry in order to conduct humanitarian and other missions. This is a very important statement for easing tension.”

Pentagon press secretary Geoff Morrell said: “We are not looking to, not do we need to, take control of any air or seaports to conduct this mission.”

In his White House remarks, Bush said he had ordered the US military to deliver humanitarian aid. A C-17 aircraft with supplies was on its way to Georgia and in the days to come Washington would use
military aircraft and naval forces to make deliveries....

Woes continue at Blue City. Poor sales and Bovis heads for the exit

In the on-going saga that is, supposedly, Oman's biggest single investment project, Blue City or Al Madina A'zarqa, the woes continue. The grand design is struggling to move forward on plan.

The project failed to meet its August 7th revenue target that it committed to when it borrowed the almost 1 billion dollars to start the project.

Abu Dhabi media outlet The National reports yesterday that BCC1 management confirmed that Blue City sales receipts were only $31mln, well short of the $101 commitment, and despite new CEO Richard Russell previously expressing confidence that they would meet the target.

The next challenge will be making November's revenue target, with BCC1 needing another $155m in revenue to meet the next target of $186m by Nov 7. And in a local (and global) real estate market hit by falling prices, tightening credit and a glut of similar opportunities that are much further down the track of completion (like the Wave), thats a hill to climb with 1 month taken out by Ramadan. That's 5 times the revenue raised in the last 6 months to get in the next 3 months. The CEO is already talking of promotions and discounts, but with much of the original money already spent on redesign and rapidly rising costs for construction, he'll have his work cut out. I'd expect the only option he has will be to offer discounted blocks of villas and apartments to some big players, perhaps in exchange for a much higher upfront deposit. Which will hardly help profitability but may get him past the important November hurdle.

Mr Russell's problems aren't restricted to a slow summer in Muscat either. My sources tell me that the experienced international management company hired by BCC1 to manage the development, Bovis Lend Lease, are (allegedly) heading for the exit and making plans to pull out of the job. Another horse change in mid-stream will not help, with the CEO being replaced only a couple of months ago. And it begs the question who will step into the breach? I predict a move 'downmarket' to a possibly less western company.

The disfunctional relationship between the owners Cyclone LLC and AAJ Holdings, who are still only talking through their lawyers as they battle for control and ownership in the Omani courts, also means the Board of Directors of BCC1 is certainly not running at full speed. And this is the sort of time when firm and steady governance at the most senior levels would be most wanted by the CEO and investors.

In June, sources close to the project told me that W.J. Towell, who had been asked to design the 1 million rials fit-out of the new headquarters office for BCC1, were kicked to the curb and new Contractors had to be hired. There are additional reports I can't confirm of other contractor change outs too.

It would seem contractor management is not a strong suit for the BCC1 team, headed of course by Said Anees Issa Al Zadjali, Chairman of the Board at Blue City Company 1.

Oh dear. Don't expect to read this in the Times of Oman, nats.
The big question is: when will the Government be forced to move in and do a rescue? I don't think there's anything fundamentally wrong with the concept or the location, but doesn't such a strategic project need to be in the hands of the professionals?

Watch this space.
Blue City misses yet more revenue targets

Bradley Hope
August 13. 2008
ABU DHABI // Blue City, a US$20 billion (Dh73.4bn) development that could put the Sultanate of Oman on the global property map, has fallen further behind in meeting its revenue targets in the wake of a Fitch Ratings warning that identified financial threats to the project.

The project has been consistently short of its revenue targets since it began sales earlier this year because of delays caused by a redesign of the master plan, legal disputes over the ownership of the parent company and a management shake-up.

In the past three months, Blue City has booked revenue of $3 million from home sales, taking its total revenue to $31m – far short of its Aug 7 target of $101m, said Richard Russell, the chief executive of Blue City Company 1, which is in charge of the first phase of construction of the project.

“We’ve had progress on collections, but there is still more to go,” he said of the development, located about 45 minutes northwest of Muscat.

The shortfalls led Fitch Ratings last month to put the project on “ratings watch negative” for $526m worth of debt it had raised for the first phase of the project as part of a $925m bond.

The Fitch report warned that while missing the targets would not likely lead to immediate sanctions by investors, it could mean problems on the horizon.

“If sales performance does not improve significantly over the coming months and quarters, the borrower may eventually struggle to continue funding the construction costs of the project,” the report said. Another report from Fitch is expected in the coming weeks.

Mr Russell said those concerns were premature and that the project would be finished on time, in 2012. In the coming months, more than 3,000 units, including 200 golf-course villas, will go on sale. There are also negotiations to sell large blocks of apartments to investors, which Mr Russell said “were getting very close” to completion.

Another $155m in revenue is needed to meet the next target of $186m by Nov 7. “We want to be on target by that date,” Mr Russell said. “In the summertime things slow down here, so we haven’t really been pushing new launches. Those are very much on track now. You’ll start to see some promotions.”

More on Iran, US And Israel: The Pentagon keep their common sense

In a sort of good news/bad news story, Israeli newspaper Haaretz reported yesterday that America was strongly against supporting an Israeli strike on Iran, denying them military assistance, Iraq overflight rights, and acting to downplay the effectiveness of such a strike. (The report was also republished in The Oman Tribune.)

However, readers should note that these efforts are mainly coming from the Pentagon and the Joint Chiefs - American Institutions that seems refreshingly removed from the idiotic machinations of the theo-cons and the likes of VP Cheney.

So the good news is the Pentagon and the US Military are firmly against attacking Iran, and against enabling Israel to perform such a strike, and sensibly pointing out that such an attack would do little to actually halt the nuclear programme (see Haaretz Report), and blocking Israeli efforts through leaks. Similar leaks of the CIA intelligence assessment also helped cool down GW Bush's sabre rattling earlier this year. It would seem the guys in the Pentagon have got our backs on this one, thankfully.

The bad news is that Israel is clearly both asking for permission to overfly Iraq and trying to obtain US advanced weapons and intelligence to carry out such a strike, and were it seems very close to executing such a strike. US Administration hawks are also intent on keeping, as they like to say, all options on the table.

The danger would be that the fall back strategy of such hawks and the theo-cons could be to pressure Iran into making the first move, by for example, a partial naval blockade, or placing elements of the 5th Fleet in close proximity to trigger happy Iranian militias in the straights of Hormuz... Hmmm.

U.S. puts brakes on Israeli plan for attack on Iran nuclear facilities
By Aluf Benn, Haaretz Correspondent

The American administration has rejected an Israeli request for military equipment and support that would improve Israel's ability to attack Iran's nuclear facilities.

A report published last week by the Washington-based Institute for Science and International Security (ISIS) states that military strikes are unlikely to destroy Iran's centrifuge program for enriching uranium.

The Americans viewed the request, which was transmitted (and rejected) at the highest level, as a sign that Israel is in the advanced stages of preparations to attack Iran. They therefore warned Israel against attacking, saying such a strike would undermine American interests. They also demanded that Israel give them prior notice if it nevertheless decided to strike Iran.

As compensation for the requests it rejected, Washington offered to improve Israel's defenses against surface-to-surface missiles.

Israel responded by saying it reserves the right to take whatever action it deems necessary if diplomatic efforts to halt Iran's nuclearization fail.

Senior Israeli officials had originally hoped that U.S. President George Bush would order an American strike on Iran's nuclear facilities before leaving office, as America's military is far better equipped to conduct such a strike successfully than is Israel's.

Jerusalem also fears that an Israeli strike, even if it succeeded well enough to delay Iran's nuclear development for a few years, would give Iran international legitimacy for its program, which it currently lacks. Israel, in contrast, would be portrayed as an aggressor, and would be forced to contend alone with Iran's retaliation, which would probably include thousands of missile strikes by Iranian allies Hezbollah, Hamas and perhaps even Syria.

Recently, however, Israel has concluded that Bush is unlikely to attack, and will focus instead on ratcheting up diplomatic pressure on Tehran. It prefers to wait until this process has been exhausted, though without conceding the military option. Israel's assumption is that Iran will continue to use delaying tactics, and may even agree to briefly suspend its uranium enrichment program in an effort to see out the rest of Bush's term in peace.

The American-Israeli dispute over a military strike against Iran erupted during Bush's visit to Jerusalem in May. At the time, Bush held a private meeting on the Iranian threat with Prime Minister Ehud Olmert and Defense Minister Ehud Barak, and the Israelis presented their request for certain specific items of military equipment, along with diplomatic and security backing.

Following Bush's return to Washington, the administration studied Israel's request, and this led it to suspect that Israel was planning to attack Iran within the next few months. The Americans therefore decided to send a strong message warning it not to do so.

U.S. National Intelligence Director Mike McConnell and Chairman of the Joint Chiefs of Staff Mike Mullen both visited here in June and, according to the Washington Post, told senior Israeli defense officials that Iran is still far from obtaining nuclear weapons, and that an attack on Iran would undermine American interests. Therefore, they said, the U.S. would not allow Israeli planes to overfly Iraq en route to Iran.

The Americans sent a similar message to Iraq, which had objected vociferously to the idea of its air space being used for an Israeli attack on Iran.

These private messages were accompanied by a series of leaks from the Pentagon that Israel interpreted as attempts to thwart any possibility of an attack on Iran. For instance, the Americans revealed details of a major Israel Air Force exercise in the Mediterranean; they also said they doubted Israel had adequate intelligence about Iran's nuclear facilities. In addition, Mullen spoke out publicly against an attack on Iran.

Two weeks ago, Barak visited Washington for talks with his American counterpart, Robert Gates, and Vice President Richard Cheney. Both conversations focused on Iran, but the two Americans presented conflicting views: Gates vehemently opposes an attack on Iran, while Cheney is the administration's leading hawk.

Barak presented Israel's assessments of the Iranian situation and warned that Iran was liable to advance its nuclear program under cover of the endless deliberations about sanctions - which have thus far produced little in the way of action. He also acknowledged that effective sanctions would require cooperation from Russia, China and India, all of which currently oppose sanctions with real teeth.

Russia, however, is considered key to efforts to isolate Iran, and Israeli officials have therefore urged their American counterparts in recent months to tone down Washington's other disputes with Moscow to focus all its efforts on obtaining Russia's backing against Iran. For instance, they suggested that Washington offer to drop its plan to station a missile defense system in Poland and the Czech Republic - a proposal Russia views as a threat, though Washington insists the system is aimed solely at Iran - in exchange for Russia agreeing to stiffer sanctions against Iran. However, the administration rejected this idea.

In an attempt to compensate Israel for having rejected all its proposals, Washington then offered to bolster Israel's defenses against ballistic missiles. For instance, Gates proposed stationing an advanced radar system in Israel and linking Israel directly into America's early warning satellite network; he also offered increased American funding for the development of two Israeli missile defense systems - the Arrow-3, an upgrade of Israel's existing Arrow system for intercepting ballistic missiles, and Iron Dome, a system designed to intercept short-range rockets. In addition, Washington agreed to sell Israel nine Super Hercules long-range transport aircraft for $2 billion. However, it would not agree to supply Israel with any offensive systems.

Now, Israel is awaiting the outcome of the latest talks between the West and Iran, as well as a formal announcement of the opening of an American interests section in Tehran. Israel views the latter as sure proof that Washington is not planning a military strike.

Wednesday, August 13, 2008

Storm clouds - Is war about to break out in the Gulf?

OK, after some frivolity of late, this one is of interest, and potentially serious. (But I have to say, we're been here before several times, and the US has never done anything that would be seen as precipitating a crisis in Iran. So far its all been threats and bluster. And its still difficult to find any 'official' confirmation of the true size of the US Navy build up. It was big to start with.)

Many of the somewhat wacky web sites are buzzing with the current state of the rising tensions between the Western Powers and Iran, alongside the implications of the outbreak of a pretty nasty shooting war between Russia and Georgia, some say precipitated by the US.

At the same time, the US and its allies have allegedly assembled in the Gulf the largest armada of US and allied Navy power seen for a long time, possibly since World War II.

There were reports on August 8th in the Kuwait Times that Kuwait has hurredly updated its emergency war plans in response to the US naval build up and the threat of war.
Govt finalizing war emergency plan
Published Date: August 07, 2008
KUWAIT: The government is finalizing its emergency plan this week in order to ensure that the country is protected from foreign dangers in case the regional situation escalates and a war breaks out between Iran and the USA.

An unnamed senior official revealed that the government has learnt that two aircraft carriers are scheduled to arrive in the Gulf and the Red Sea in preparation for the expected war at any time. The official said that this information led the government to accelerate its emergency plan preparations, which include arrangements for protecting all sectors and vital installations. ...

The list of 'platforms' the US and western allies has recently moved into the Middle East theatre is long and impressive. Here's the list as posted in the pretty 'out there' conspiracy blog of the rather wacky (and that's an understatement) Lord Stirling [thanks for the link Willie!]. The list includes the Somali pirate chasing USS Peleliu which I blogged earlier, presumeably they were on their way north.

Global Research
The US Naval forces being assembled include the following:

Carrier Strike Group Nine
USS Abraham Lincoln (CVN72) nuclear powered supercarrier
with its Carrier Air Wing Two
Destroyer Squadron Nine:
USS Mobile Bay (CG53) guided missile cruiser
USS Russell (DDG59) guided missile destroyer
USS Momsen (DDG92) guided missile destroyer
USS Shoup (DDG86) guided missile destroyer
USS Ford (FFG54) guided missile frigate
USS Ingraham (FFG61) guided missile frigate
USS Rodney M. Davis (FFG60) guided missile frigate
USS Curts (FFG38) guided missile frigate
Plus one or more nuclear hunter-killer submarines

Peleliu Expeditionary Strike Group
USS Peleliu (LHA-5) a Tarawa-class amphibious assault carrier
USS Pearl Harbor (LSD52) assult ship
USS Dubuque (LPD8) assult ship/landing dock
USS Cape St. George (CG71) guided missile cruiser
USS Halsey (DDG97) guided missile destroyer
USS Benfold (DDG65) guided missile destroyer

Carrier Strike Group Two
USS Theodore Roosevelt (DVN71) nuclear powered supercarrier
with its Carrier Air Wing Eight
Destroyer Squadron 22
USS Monterey (CG61) guided missile cruiser
USS Mason (DDG87) guided missile destroyer
USS Nitze (DDG94) guided missile destroyer
USS Sullivans (DDG68) guided missile destroyer

USS Springfield (SSN761) nuclear powered hunter-killer submarine

IWO ESG ~ Iwo Jima Expeditionary Strike Group
USS Iwo Jima (LHD7) amphibious assault carrier
with its Amphibious Squadron Four
and with its 26th Marine Expeditionary Unit
USS San Antonio (LPD17) assault ship
USS Velia Gulf (CG72) guided missile cruiser
USS Ramage (DDG61) guided missile destroyer
USS Carter Hall (LSD50) assault ship
USS Roosevelt (DDG80) guided missile destroyer

USS Hartfore (SSN768) nuclear powered hunter-killer submarine

Carrier Strike Group Seven
USS Ronald Reagan (CVN76) nuclear powered supercarrier
with its Carrier Air Wing 14
Destroyer Squadron 7
USS Chancellorsville (CG62) guided missile cruiser
USS Howard (DDG83) guided missile destroyer
USS Gridley (DDG101) guided missile destroyer
USS Decatur (DDG73) guided missile destroyer
USS Thach (FFG43) guided missile frigate
USNS Rainier (T-AOE-7) fast combat support ship

Also likely to join the battle armada:

UK Royal Navy HMS Ark Royal Carrier Strike Group with assorted guided missile destroyers and frigates, nuclear hunter-killer submarines and support ships

French Navy nuclear powered hunter-killer submarines (likely the Amethyste and perhaps others), plus French Naval Rafale fighter jets operating off of the USS Theodore Roosevelt as the French Carrier Charles de Gaulle is in dry dock, and assorted surface warships

Various other US Navy warships and submarines and support ships. The following USN ships took part (as the "enemy" forces) in Operation Brimstone and several may join in:

USS San Jacinto (CG56) guided missile cruiser
USS Anzio (CG68) guided missile cruiser
USS Normandy (CG60) guided missile cruiser
USS Carney (DDG64) guided missile destroyer
USS Oscar Austin (DDG79) guided missile destroyer
USS Winston S. Churchill (DDG81) guided missile destroyer
USS Carr (FFG52) guided missile frigate

A quick summary:
- Georgia has been ruled by a western leaning Government for some time, with a western sponsored oil pipeline from the Caspian running through it, and a history of a semi-independent province (South Ossetia) dominated by Russians since the days of the Soviet Union. It is alledged that there have been 1000 US Advisors in Georgia recently, and that the attack by Georgia on South Ossietia was deliberately timed to precipitate a Russian response. Rumors of Israeli arms shipments and military personel supporting Georgia can also be found.
- Iran continues to do what it wants on Uranium enrichment, and recent sanctions by Europe and the US imply a possible 'search of cargoes' headed to Iran. Any attempts by the west to effectively impose a naval blockade of Iranian imports (or exports), especially of refined petroleum products, would undoubtably be seen by Iran (and China) as an act of war. See also Debka on the blockade
- It would seem US forces are there in such quantity and quality to ensure that, not only can they enforce a (partial)blockade, but more importantly so they can respond in force to any attempt by Iran to shut the straights of Hormuz.
- The wild card remains whether the Israelis will act to bomb Iranian nuclear facilities, and if so, will the US allow them to overfly Iraqi airspace (which they control)?
- Everyone knows that GW Bush has only a few months left. The timing of the November election may be something to watch, as no-one will want to be seen to influence the Presidential election. But once the election is over, Israel may feel free to act, and GW can claim to have no control.

Iran have also indicated that they would act against American interests in the Gulf (Qatar? Oman???) if there was any force applied by the US.

All in all, something to watch over the coming few weeks. Plus, I'm not planning a visit to Musandam soon....

More classic Times of Oman self promotion

Just a quick one - this classic item of self promotion in the 'hard hitting' Times of Oman today, about how fantastic Essa bin Mohammed Al Zedjali the editor of Times of Oman is. In fact the paper quotes the Omani Ambassador to China, Abdullah bin Salleh bin Hilal Al Saadi, as naming him "the author of English journalism in Oman"

Meanwhile, the continuing problems at Blue City, usually hailed by Essa as the most important project in Oman's history, remain surprisingly unreported by the Times. Just co-incidence that Essa's relative is the Chairman of the main company responsible for the development. Oops. More on that soon.
UPDATE: Just to clarify/expand, its Essa's son Said Anees Issa Al Zadjal who is Chairman of BCC1, the company responsible for the development of Blue City Phase 1.
Envoy to China hails ‘Times’ initiative
From Arif Ali
Tuesday, August 12, 2008 12:09:14 AM Oman Time
BEIJING — Abdullah bin Salleh bin Hilal Al Saadi, the ambassador of the Sultanate of Oman to China, yesterday hailed the initiative of Times of Oman in producing Oman in Beijing, a special publication to mark the Sultanate’s participation in the Bejing Olympics, which will be launched today at his residence in the presence of the Omani contingent and Chinese officials.

“I am deeply impressed by the imitative of Times of Oman which is bound to boost the growing Oman-China ties in addition to bolstering the morale of the Omani squad taking part in the Olympics,” said the senior envoy as he made a special mention of Essa bin Mohammed Al Zedjali, chairman and editor-in-chief of Times of Oman and Al Shabiba, for his sterling role in producing Oman in Beijing, striking both in manner and matter.

“Sheikh Essa remains the author of English journalism in Oman and we value his contribution to the promotion of mass media communication,”, said the ambassador who remains an avid reader of his hard-hitting and widely-read weekly column — Viewpoint — published also by the sister Arabic daily Al Shabiba.
The comment describing the Viewpoint opinion piece as hard-hitting made me laugh hardest.

Will the real Omani intellectuals please stand up?

Dead cat bounce?

As expected, the MSM index rebounded somewhat yesterday, up about 3.5%.

Those with a penchant for risk and opportunity should keep a weather eye out for the next few days. I'd expect to see a further drop as short term profits are taken, and that should be a buying opportunity for quality stocks that get caught up in the low liquidity and general panic: EG:
Bank Muscat, Galfar, Renaissance. (one could add Omantel, given the expectation of the long awaited strategic partner, but they are such a badly run and incompetent Government monopoly I wouldn't touch them with a 10 foot pole).

However, given the volatility lately, you need a good broker, or you'll find out you paid the highest price during the day.

But no matter what, the market will be interesting to watch for the next few days...

Oh, for those unfamiliar with the term Dead Cat Bounce used in the title: it comes from the phrase 'even a dead cat will bounce if you drop it from a great height': Thus, its a common observation of markets that following a big drop, there is often a slight rise immediately afterwards, but this does not mean prices will recover - its a slight blip on a downward trend.

Monday, August 11, 2008

Bloodletting continues on Muscat Stock Market

The Muscat stock exchange top 30 Index - AKA the MSM 30 - continued its freefall today, and as I post, it's dropped 5.7% from an opening of 10,115 to 9,537. Many leading and widely held stocks fell by around 9%, and that's today alone (plus see table below).

This recent plummet seems to have gotten the small investors running for the hills and the market shows signs of turning into a rout. If you know anyone who's been getting into the market in the last few months, they've probably taken a bath, especially if they borrowed to invest. You might quote the Bhagavad Gita to them...
"hell has 3 gates: lust, anger and greed". And that its only a paper loss unless they sell.
[Although my personal favorite quote on greed is from PJ O'Rourke, the American satirist, "No drug, not even alcohol, causes the fundamental ills of society. If we're looking for the source of our troubles, we shouldn't test people for drugs, we should test them for stupidity, ignorance, greed and love of power."]

Since the market peaked on June 11th, the market index is down nearly 22%. Ouch. But remember the index is still up over 40% since this time last year, so it was always likely that Muscat's recent over-exuberance would calm somewhat.

The institutional sharks (possibly with the support of the Government's coffers as HM's government is probably the largest investor in the market) will now start to circle I expect. Some of the shares look like good bargains at these prices on historic P/E (price/earnings) ratios (check out Bank Muscat). Even Galfar and Omantel look under-priced, but, hey, what do I know.

Certainly watch for the dead cat bounce. If the index drops below 8000 even I might buy in...

(Note that this blog is not a source of investment advice, and any readers are advised to do their own research. Do not make any decisions based on this blog).

Source MSM website
Company Price Change
Aug 11, 2008 01:08 PM
Company, Price, %change,
OMINVEST (OMVS ) 0.909 -9.82%
ONIC. HOLDING (ONIC ) 0.991 -9.42%
MAHA PETROLEUM (MHAS ) 16.052 -9.36%
AL ANWAR HOLDING (AAIT ) 0.435 -8.61%
AL HASSAN ENG. (HECI ) 0.266 -8.59%
UNITED FINANCE (UFCI ) 0.312 -8.24%
OMAN UNITED INS. (OUIS ) 0.370 -8.19%
BANK MUSCAT (BKMB ) 1.529 -5.79%
OMANTEL (OTEL ) 1.883 -7.15%
AL ANWAR HOLDING (AAIT ) 0.435 -8.61%
NAT. BK. OF OMAN (NBOB ) 0.559 -7.30%