Friday, October 31, 2008

Oman's Budget and Oil Price Impact

A few days ago the Government published its 2009 budget. News Briefs Oman gives a good summary.

First off, its great that the Government does this. Publishing the countries budget is a good thing. Of course, that is nowhere near comparable to what a public company would have to report, ie a country's version of balance sheet, cashflow, profit and loss, assets and liabilities.

The question going around now is 'what is the effect of the lower oil price in the Gulf economies?'

Oman's 2009 budget is based on a premise of $55 a bbl for its crude exports, and includes a deficit. Note that represents a year average oil price, as Omani crude trades on a monthly officially set price.

On the face of it, that doesn't look too bad. Last years budget - set on $45 / bbl - was easily topped by average oil prices at least 120% above that at around $100. Nice. Assuming Oman exports around 600mln bbl a day, that's almost $22 billion.

So what about a $60?
On the face of it domestic spending will be almost financed at $60. But its more complicated than that.

The so-called 'break even' oil prices being quoted in a very good article in the National.

This is a higher price than Oman'$55 budget, but tries to take account some of the off balance sheet items.Most interesting is the statement:

Economists differ on which GCC economy is the most vulnerable to low oil prices. Mushtaq Khan, an economist at Citigroup, said it was Qatar, which requires $57 a barrel to balance its fiscal budget. Others, like the IIF, report that Bahrain and Oman have the highest break-even oil prices – about $72 and $76 a barrel respectively. Outside the GCC, the economies of other Gulf oil producers like Iran ($90) and Iraq ($110) are even more vulnerable to falling oil prices, according to Mohsin Khan.

If oil prices approach these levels, most economists agree that governments will probably have to stop increasing their spending at the current rate. In a region where government-backed infrastructure and property projects are keystones of national economies, a slowdown in government spending could have serious consequences.

“If there is a concern that the oil price might continue to fall, I think there are a number of projects that might be scaled back – especially those that are still in planning phases or that have just been started,” said Ms Ziemba.

In the short term (~1 year) there is probably not much any of the Gulf countries could do to significantly reduce spending anyhow, as its basically committed, and any additional budget short fall would almost certainly be able to be financed, given the status of their 'Sovereign Wealth Funds' holding over a Trillion $.

In the very short term for any business, the most important factor is marginal cashflow. It's a company's oxygen. And a country's, financially speaking. [see Iceland]. And having that cash & assets on hand is critical. So there is no need in the short term for any problems at all, as Oman probably has at least $6 bln in spare foreign assets, and relatively low debt financing costs (a huge difference to 1998). Being linked to the dollar has now helped too lately.

The oil business is also a cash business, like fast food. Oman actually gets paid cash up front for its crude.

But what about long term?
It depends what you mean by long term I guess. If oil prices stayed below $50 for many years, that would certainly mean Oman perhaps could have been richer if they had avoided a few investments they've made in the last few years. As the article says, projects just starting would certainly be mothballed.

But also, by then, contracts would have been renegotiated. (low oil price = no world demand = cheaper materials and services). And by then Oman would be able to cut its costs back to survive in $30 long-term. So they would remain solvent.

You have to remember that in the day-to-day, what would be important is the marginal cost, not the overall profitability taking into account sunk costs and future investment. Ignoring those long term things, even today, it means Oman is making money on each bbl even if the price reached $8. The big boys even lower. The incentive, if anything, would be to accelerate production to try and partially offset any cash shortfall. What some of my contacts in this rather colorful industry call 'pump like fuck'.

This is what happened in 1998, and is partially responsible for Oman's subsequent rapid production decline in the early 2000s. Also in 1998, Saudi was trying to re=establish its control over world price and Opec, and had started a price war to bring Opec into line (as Saudi had the lowest cost to produce and the biggest reserves, it basically went 'all in').

Hopefully OPEC has learnt that lesson well from 1998 and will move decisively to bring oil at least to $60-$80 by cutting (real) production. Then everyone would be happy I think.

Of course, the rate of Oman's growth would plummet. Oman has gotten used to big growth rates of late, all driven by huge Government spending and slightly iffy real estate developments. This would be a big long-term problem. If the birth rate was ~1.5 and there were lakes of oil for 100s of years, no worries. But it makes the forward development a lot slower and more painful without the blessing of obscenely high oil.

And Oman has picked a very high Capital, 'global bull-market' set of growth industries.
Aluminum, Methanol, Urea, copper - all are highly correlated in price to oil. And anyhow are effectively subsidised by artificially low gas prices.

Mega Real Estate investment dependent on foreign money from relatively rich older people: who have just seen 50% of their stock portfolios vanish.

Tourists jetting in from Europe. Hmmm. There are a lot of credit cards that need paying off, and a luxury foreign holiday is perhaps not going to be as much of a priority when you're afraid of losing your job. Tourism may need to switch to Asia and more GCC.

And a domestic economy highly based on land, housing, a booming stock exchange and new cars, (+ Government spending) with a lot of debt financing. That looks a little shakier now too. The fisheries don't look like being able to grow, if anything in decline. Oil will probably drop to around 500k bbl a day, but will continue to act as the core engine of the economy OK.

So all in all...

Short term
everything will be fine, almost no matter what the oil price.

Medium term
at low oil price also still looks OK. Steady growth at a few % per year. A few long term projects stopped. More focus on diversifying domestic growth, esp agriculture and tourism. Problems of rising electricity costs and financing any new projects. Domestic fuel prices are forced up. A lot less new cars.

Long term.
Not so great. Low growth will be overtaken by the population curve. Big problem. Upside is a bit of reasonable austerity might help improve the Omani average work ethic.

But who reasonably thinks that in the long term oil price will be less than $50?
Not me.

readers suggestions

OK readers - what do you think the press in Oman should be investigating and talking about?

What issues do you suggest could be starting points for the soon 'international standard trained' Omani journalists?

How do you think the current global situation might impact Oman, and what can be best done about it?

Russian bought Oman's Kazak pipeline share

For those who didn't already know, looks like Oman sold its stake in the Kazak pipeline to Russia. Oman had been looking for a buyer around a year ago quite openly.

I understand the deal was assisted by one the other pipeline partners Oman has good relations with...

In the current situation, looks like it was a smart move.

Moscow Times

Russia May Have Bought CPC Stake
31 October 2008ASTANA, Kazakhstan -- Kazakh President Nursultan Nazarbayev told Prime Minister Vladimir Putin on Thursday that the two states should jointly buy Oman's share in a major pipeline, only to hear that Russia might have already bought it alone.

"Oman is a shareholder in [Caspian Pipeline Consortium] and we should buy [its stake]. We should take 50 percent each so the others do not do it. It is very important," Nazarbayev told Putin during a meeting in the Kazakh capital of Astana.

The proposal appeared to take Putin by surprise.

"I'm not entirely sure, but it seems to me we have already bought it. I need to check," Putin said.

The CPC owns the 1,580-kilometer long Tengiz-Novorossiisk oil pipeline, which links oil fields in western Kazakhstan and Russia's Black Sea coast. The CPC pipeline pumped 32.6 million tons of oil in 2007.

Russia and Kazakhstan, the two governments with a stake in CPC, have first right of refusal on Oman's 7 percent stake in the consortium, the key export route for Kazakhstan's crude oil.

Oman decided to sell its stake earlier this year, but so far there has been no information on who may have bought it.

Russia has a 24 percent stake in CPC and Kazakhstan owns 19 percent. The rest belongs to private shareholders: Chevron, BP, Royal Dutch Shell, ExxonMobil, LUKoil and Rosneft.

In September, BP also expressed interest in selling its stake in CPC if it failed to agree with the government on terms for expanding the line.

Of the shareholders, only BP has not agreed to the expansion terms demanded by Russia. (Reuters, MT)

Thursday, October 30, 2008

Omani Street Racers

Pretty slow news day today. Market flat past 2 days. No scandals.

So its time for sports entertainment!!!!

Know anyone with a new red GTR R35 with the license plate 21135 A?

You may recognise him from his video street racing in Oman, hitting 260km against a corvette. Nice.

Own a nice corvette: Mastercard
Also own a GTR?: Mastercard
Recording the race while forgetting to not show your license plate: Priceless

Wednesday, October 29, 2008

No gays please - we're Bahrain and we're straight.

Following on from the post on 'No sex please', the Gulf News reported today that the Islamo-wackos in Bahrain are now calling for a ban on homosexuals entering the country and leading astray the delicate youth of Bahrain. They want the Government to 'stamp out' homosexuality and for the security services to be 'more vigilant' to stop foreign gays entering the country. They are worried their gayness is spreading to the local population, who are then having lots of gay sex and even worse, dressing fashionably and stylishly, neither of which would happen if only the security forces would act as all Bahraini boys are born straight, obviously.

How bizarre. It makes you wonder if these guys ever think about things at all. I'm trying to imagine the scene at the immigration desk...

Bahraini Immigration Officer: Welcome to Bahrain, where everyone is straight or they get a good beating. So, you are man, yes?
Tourist: Er, yes sweetie. What nice eyes you have.

Bahraini Immigration Officer: And who is this man there? Your brother? Your Cousin?
Tourist: Oh, we're just friends. We're here for a holiday for the F1 race. We've got a double room at the hotel.

Bahraini Immigration Officer: You are married?
Tourist: No. Could just never find the right girl, you know?

Bahraini Immigration Officer: Are you a homosexual? Are you Filipino?
Tourist: Me? Er... No.... I'm British.

Bahraini Immigration Officer: Really. But why you are looking like a pansy big girl's blouse!? You are having highlights and too too much jewelery. And you are walking funny and having a girly voice. Are you sure you are not a biter of pillows or a lifter of shirts, coming here to pervert the innocent and totally straight young Bahraini boys?
Tourist: I'm sure.

Bahraini Immigration Officer: Is that a piercing!?!?! I think you are like the gay poofter people I see on satellite TV who are very funny. You are like my little cousin Said who we don't talk about, who keeps wanting to be hairdresser and playing with the flower arranging.
Tourist: Oh, OK. You're right. We thought we could fool you. Quintin, the pink Dolce & Gabanna shirt was a giveaway, didn't I tell you!

Bahraini Immigration Officer: Next!
Oh it is you Mr. Michael Jackson! Welcome back to Bahrain! Welcome! Oh, and thank you for taking my cousin Said for a sleepover party to your villa last time. He said he had a wonderful time.... Enjoy your stay!

Like what the Middle East needs is more hate and decisions based on religion.

Call to ban gays from entering Bahrain
By Habib Toumi, Bureau Chief
Published: October 27, 2008
Manama: Two Islamist MPs have renewed calls to ban homosexuals from entering Bahrain, warning that their presence in the country would "lead to social and moral depravation."

"The interior ministry has to act swiftly and promptly to stamp out homosexuals in Bahrain since the procrastination of the issue would intensify the problem," Abdul Hamid Murad, representing Islamic Menbar Society, said.

"They can be seen in many areas in Bahrain, but their presence in Manama, the capital, is very noticeable," he claimed.

According to the MP whose bloc commands six of the 40 seats in the lower house of the parliament, homosexuals were having "a negative influence" on the Bahraini youth.

"Bahrain already has enough social problems, such as the use of drugs, so allowing foreign gays into the country would compound the situation. The real tragedy is that many young Bahrainis have started imitating the style of the homosexuals by, for instance, wearing indecent clothes," he said.

The MP said that the security authorities should be more vigilant in deciding who can enter the country, claiming that they had a duty to preserve Islamic ethics.

But for MP Mohammad Khalid, the authorities should address the issue as "a tragic development that needs immediate and robust tackling."

Of course, this isn't new in Bahrain. Islamic parties have previously called for action against homosexuals, and apparently 2000 Filipino hairdressers were deported in 2002.

The Al Menbar bloc, not content that the penalty of fines, imprisonment or deportation acts as a sufficient deterrent, called on tougher measures to “stamp out homosexuality”.
The proposal - ratified by parliament - called on:
The Interior Ministry to stop granting residence permits to foreign homosexuals.
The Education Ministry to monitor students, and punishing those who veered towards homosexuality.
The Industry and Commerce Ministry to monitor massage and hair salons to ensure that they have no closed rooms and that violators be prosecuted.

See Pink News UK and MidEast Youth

A set of proposals approved by Bahrain's parliament targeting homosexual activity in the country should be implemented, according to a politician in the Gulf state.

Brotherhood MP Shaikh Mohammed Khalid Mohammed wants the government to begin a number of initiatives designed to rid the country of gay people.

In April parliament demanded that the Interior Ministry stop granting any residence permits to foreign homosexuals.
The ministers have called for homosexuals to be 'rooted out' of hair salons and massage parlours. The proposals will see teachers on the look out for homosexual tendencies in children and 'punishing them accordingly.'

Homosexuality has been considered illegal in Bahrain since 1956 when, as part of the British Empire, it was given the Indian Penal Code.Homosexuals can be given up to 10 years in prison though this is rarely put into practice.

In 2002 the government deported 2,000 allegedly gay Filipino workers for homosexual activity and prostitution.

Tuesday, October 28, 2008

Its Official: Dubai is a shit-hole

While we expats here in Oman may find it strange that, more than a century after the Victorians showed the way on modern sewage treatment, Muscat is only now retro-fitting a centralised sewage treatment cleection and treatment system, at least we aren't swimming in shit.

Unlike Dubai.

Here's a nice pic from the Gulf News that shows what happens when you pour raw sewage into a city's storm drain system. Yum.

Dubai Offshore Sailing Club on Friday, showing the ongoing pollution caused by raw sewage dumped into storm drains. Source: Gulf News

The reason for the illegal dumping is that Dubai is still using the septic tank poop-truck system (as is Oman) in their cities. The resultant tidal wave of human excrement is trucked to the 1 main Dubai treatment plant, but the queue of poop-trucks waiting to get in and empty is miles and miles and miles long. It can take the poor drivers days to crawl their trucks along the queue. Because the queue is always slowly moving, they can't stop for a piss or to sleep, and of course the truck spends a long time for just 1 load cycle.

The temptation then to either just spray it into the desert, or dump it down a storm water drain is proving overwhelming. With the result that parts of Dubais coastline are literally full of shit. A few months ago Dubai International City was also trapped in a lake of sewage for weeks.

I guess that's one way to discourage those pesky British tourists from bonking on the beach! See also Raw Sewage Threat to Booming Dubai.

What I found shocking was that in just one month they caught 27 tankers dumping. Thats just those they caught. And the planned solution is to build a bigger car park for the trucks to wait in at the sewage plant. Like that'll work.

So, while Oman's method of hiring low-bid Chinese contractors and digging up all the streets is painful to watch, its certainly a lot better than the alternative...

Gulf News: Clean Up Act
People who tip off inspectors about sewage tankers dumping waste illegally will earn a cash reward of Dh2,000, Dubai Municipality announced yesterday.

The Municipality also revealed that the owners of 55 tankers caught this week were each fined Dh100,000. Salem Bin Mesmar, Assistant Director General of Dubai Municipality for Health, Safety and Environment Control Sector, said severe punitive actions would be taken against those who violate environment safety rules and regulations in Dubai.

Apart from fines, tankers could be confiscated for one to three months and trade licences of transporting companies may be suspended until further notice, he said, adding that any changes or addition to a tanker’s structure will result in severe legal actions.

Last month, Dubai Municipality’s Drainage Network Department caught around 27 tankers dumping sewage illegally into storm water lines. They were fined Dh50,000 each, which included cleaning costs.

Instead of dumping sewage at the Al Aweer Sewage Treatment Plant, many drivers prefer to empty their tankers in open areas or into storm water networks at Al Quoz, Al Barsha and Nad Al Sheba that are designed to carry pure rain water into the sea. This has resulted in polluting parts of Dubai’s coastline.

Municipality inspectors are now keeping a close watch for dumping between midnight and 5am.

Dubai Municipality is currently undertaking a project to reduce the waiting time for tankers at the Al Aweer Sewage Treatment Plant. The project involves construction of a 50,000 square metre parking lot that may make the dumping process smoother.

Quick swim anyone?

No sex please, we're Middle Eastern

Just a couple of interesting articles from the region to start the day today.

First up, sex.
Sex is a big issue in the ME. Lets face it -the place is so totally uptight: No porn, sex toys are illegal (almost!), no sex outside marriage, no homosexuality, masturbation is haram, no sex education, no abortions, no legal prostitution, adult web sites blocked centrally for everybody, no topless or nudist beaches.... Its not dissimilar to the heart of the US Bible belt. Hell, in Saudi if you're a woman you can be sentenced to a good lashing for the 'crime' of being raped.

Thus, you don't have to be a rocket scientist to figure that having sex on a public beach in the UAE, apparently after a cop has already warned you to move on, is a really dumb idea. The couple (Brits naturally), are incredibly still out on bail pending their appeal, but are now being faced with a counter appeal. UAE think 3 months in prison not enough, and want at least a year. Wow. The couple are of course exteremely fortunate they weren't on a Saudi or Iranian beach, but still, a year for a low quality drunken bonk. Ouch. It's probably just an attempt to get them to take the original 3 months and leave. Gulf News
Prosecutor seeks longer jail term for sex-on-beach couple
By Bassam Za'za', Senior Reporter
Published: October 27, 2008

Dubai: The British couple, who was convicted of indulging in sexual activity in public, might find themselves serving a longer jail term after the Public Prosecution appealed their initial verdict of a three-month imprisonment. ...

Meanwhile, in Eqypt...
the Gulf News reports on a couple who have been busted for organising swinger parties, although it looks like the problem is the Egyptians don't actually have a law making it illegal for a group of married adults to have consensual sex with one another in private, so they are talking about using anti-prostitution laws to give them 3 years. Ouch!

The story is quite salacious and yet sort of down-at-home cute: hubby surfed some porn, came across an Iraqi Kurdish guy who was into swinging there, and convinced the wife to give it a try. She went on to get their friends into it too! Awesome.

'Egyptian police snooping on couples'
By Ramadan Al Sherbini, Correspondent
Published: October 27, 2008
Cairo: Egyptians have reacted with shock at the country's first known case of wife-swap involving married couples.

Earlier this week, police arrested the couple, using the pseudonyms Magdy and Samira, who had allegedly set up a wife-swapping club via the internet. A total of 44 married couples were alleged to be members of the club, according to security sources.
The two main suspects, confessed in questioning to having organised orgies in their apartment in Giza, south of Cairo, the sources added.
"I stumbled on a website on wife swap run by a Jewish Kurd in northern Iraq, who explained the idea to me and encouraged me to promote it in Egypt through my own website. I suggested the idea to my wife, who liked it," he added. They have two children. The husband told prosecutors he had convinced his wife, a 37-year-old Arabic teacher, of the idea of "a swinger lifestyle as a form of physical recreating between consenting married couples".
"My wife and I began telling our close married friends and acquaintances about it and many of them willingly attended at least five swinging parties we held in our home, as well as three orgies at other addresses," Magdy, the main defendant, was quoted as saying in investigations.

The couple and their accomplices could be charged with facilitating prostitution, which carries a sentence of up to three years in jail, under the Egyptian law.

Also in Egypt, a man who grabbed a woman's tits in the street got 3 years hard labour, but prosecution for such things is surpisingly a rare event in the ME considering the public taboo on matters sexual.

Egyptian Gets Jail for Sex Assault in Milestone Case
By JOSEPH MAYTON (Middle East Times)Published: October 22, 2008
Tuesday's court conviction of a groper is said to be a victory for women. "Women are freer to talk, and know that they are not alone, and [abuse against them] is not their fault," one women’s activist says.
CAIRO -- When Noha Rushdi Saleh went to a police station to press charges against a man who had repeatedly groped her on the street, she was turned away. The police said that if she wanted to file charges against the man she would have to bring him to the station herself. Saleh, 27, promptly returned to the scene and sat on the hood of the perpetrator's vehicle and argued with him until they went to a local station where he was charged with assault.

Her decision to press charges paid off Tuesday, when a Cairo court sentenced Sherif Goma'a to three years in prison with hard labor and fined him 5,001 Egyptian pounds ($895).

and later in the same article, mention of how mobs of Egyptian youths sometimes sexually attack women in the street en-mass. Bizarre.

...On Oct. 2 scores of young men and boys attacked women in the streets in a middle-class Cairo neighborhood. According to eyewitness accounts, around 150 male youths attacked female pedestrians and ripped at their clothes.
Women reported groping and inappropriate touching. Veiled women had their clothes torn off by the attackers. One who wears the niqab – the veil that covers the entire face – reported men grabbing at it in an attempt to reveal her face.

This was the country's worst sexual harassment incident since another mob attack in downtown Cairo on Oct. 24, 2006. But, unlike the 2006 assaults – when the Egyptian government and ministry of interior were in denial that the rampage even took place at all – the attacks earlier this month were met with speedy reaction from the local police. After receiving a phone call from the area, police converged on the mob scene in the Mohandiseen suburb and arrested dozens of youth. "The police actually arrested people," Ghozlan said. "It is the first time that the government is actually admitting that there is a problem."

For Ghozlan and Saleh the situation facing women in the country is unbearable. Women cannot walk outside without the fear of being harassed.

The best website guide for Off-Roading and Camping in Oman

Off roading (aka Wadi bashing) in Oman is one of the many reasons Expats love this place. The winter weather's reliable perfection, the vast expanse of interior and coastline with few people, few dangerous fauna, and the friendliness of the locals all combine to make Oman one of the world's best places for camping. Cheap fuel and 4x4s help a lot too!

Bar Al Hickman Beach, borrowed from Jan Schreurs' fantastic website

I get a lot of requests for info on camping, so I thought I'd save me - and you - a load of work and post the link to what is I think the best resource out there on camping: The personal website of Jan & Lilian Schreurs, a Dutch couple who have lived in Oman for ages and done almost everything there is to do off road in the Sultanate of Oman.

Jan & Lilian Schreurs' web site

Check it out. You will NOT be disappointed. All the standard tours are there, with maps, photos, hints, GPS, etc etc etc. And Jan seems to be a geologist, so if you like rocks, there's lots of that stuff too.

Disclaimer: Warning
Be aware, going near the interior's Oil Installations, International Borders, or the Oryx Reserve without permission may result in you being detained/shot at by the ROP and/or Army. Don't be stupid.

And don't go unprepared into the desert. If you do not have enough water and get stuck you may die: read Jan's comprehensive notes on how to make sure you wadi bash safely.

Monday, October 27, 2008

The Russians are in town for a holiday, and ahem, 'business' Comrad

In what I interpret as a sign of the sort of increased wasta the Russians have these days, the Mayor of Moscow, Yuri Luzhkov, actually got an audience with HM.

OK, it sounds like HM just stopped by and said hello, but still something very indicative of the sort of political power this guy has back home. He is far more than just an ordinary Mayor. And ordinary Mayors don't generally get to meet HM.

Putin & Luzhkov

Mr. Luzhkov is certainly a pretty interesting guy. Mayor of Moscow since 1992, he managed to escape being too close to Yeltsin, and he certainly knows a thing or two about improving the efficiency of a hopeless socialist bureaucracy (see his San Jose University profile). I hope the Omani representatives do learn a thing or two from him about how changing people's incentives effect behaviour and how to get things done. But perhaps not so much on how the extensive system of corruption and kick-backs seems to work very very well in Moscow... (see this biography)

Times of Oman
HM gives audience to Moscow mayor
ONA Monday, October 27, 2008
MANAH — His Majesty Sultan Qaboos bin Said gave an audience to Yuri Luzhkov, mayor of Moscow, yesterday at Hisn Al Shomoukh in the wilayat of Manah.

They discussed aspects of cooperation between the Sultanate and the Russian Federation, in addition to matters of common concern.

The audience was attended by Sayyid Ali bin Hamoud Al Busaidi, minister of the Diwan of Royal Court; Sergey Ivanov, Russian Federation ambassador to the Sultanate, and the delegation accompanying the guest.

They then went on to have a pow-wow with the Governor for Muscat and the Wali of Seeb et al, so Oman's representatives dropped down to the regional level as one would expect, and they discussed urban issues, undoubtably including opportunities for contracts, etc. But it sounds more like an excuse for a bit of a tax-payer funded holiday from the Mayor, and a search for foreign investment with few strings attached (hotel investments anyone?).

Funny how visits of this type tend not to happen too much in say June or July...

Luzhkov these days is a big supporter of the Putin-style Russian nationalism, and a non-smoking tee-total conservative. He banned the Moscow Gay Pride Parade (calling it 'Satanic'), supported the Russian seperatists in South Ossetia, and has acted against minorities, and I'm sure he's not a very big fan of Islam. You'll see the web is full of accusations of some pretty serious (and successful) nest feathering on his part, especially from massive construction projects and real estate deals, eg: see NYTimes, so he'll probably feel quite at home here in Muscat!

I'd certainly be wanting some serious forensic accountants to keep a very close eye on any investments involving Mr Mayor if it was somebody else 'investing' my money... Are there any bright, young, entrepreneurial Omani out there who speak Russian? You may want to drop your CV by the Muscat Governer's office - see the last line in the exerpt below!
Sultanate, Russia to strengthen cooperation
ONA Monday, October 27, 2008
MUSCAT — An official session of talks was held between Oman and Russia here yesterday.

The Omani side at the meeting was led by Sayyid Al Mutassim bin Hamoud Al Busaidi, minister of state and governor of Muscat; and the Russian side was led by Yuri Luzhkov, mayor of Moscow.

At the outset of the meeting, Mutassim welcomed the guest and his accompanying delegation wishing them a good stay in the Sultanate. He reviewed the growing relations between the two countries, thanks to the support and directives of both countries’ leaderships.

On his turn, the mayor expressed his delight on visiting the Sultanate and being able to acquaint himself with the development witnessed by the Sultanate, its historical landmarks, expressing his country’s keenness to develop its relations with the Sultanate in political, economic and cultural fields. The talk also covered a number of topics related to cooperation between the governorate of Muscat and Moscow, in terms of exchanging expertise and coordination in related fields. The mayor invited Mutassim to visit Russia and he accepted the invitation. ....

Panic driven rout continues in MSM, World Economy heading for hell in a handcart

The MSM kept free-falling today, so far down ~7% and showing no sign of a pulse what so ever. The world, as you will know, is finally waking up with a shock to the notion that the credit crunch/financial crisis is going to mean the 'real' economies in USA, Europe and Asia take a huge hit. Duh.

Lets be honest, the news is not exactly peachy, even in the region. Kuwait had to rescue its second biggest bank; UAE is calling for GCC coordinated action after they issued a blanket guarantee for bank deposits and inter-bank debts; Kuwaiti investors are calling for the Government there to put a floor on the local stock market using state funds; Saudi has bailed out several billion $ in free 'loans'; and Dubai's Real Estate/foreign influx driven bubble economy, built on the back of excess money from Saudi, Abu Dhabi, Europe and Kuwait, is looking like the voodoo-nomics on LSD while breathing nitrous oxide it always was.

Traders in Muscat now seem to be making a habit of the 'run around in circles waving your arms and screaming uncontrollably' approach to crisis management and fund analysis, as advocated by President Bush recently.

Gulf News MSM
Muscat Securities Market slumps to lowest in over a year
By Sunil K. Vaidya, Bureau Chief
October 26, 2008
Muscat: Oman's Muscat Securities Market (MSM) hit a new low when the MSM 30 Index crashed by 587.9 points (8.290 per cent) to its lowest level - 6,506.030 - in over 12 months. The panic stricken market had no buyers even for blue chip companies like BankMuscat, Omantel, and Gulfar as fear of further falls gripped the market.

"It is a virtual panic condition," said an analyst on condition of anonymity. ...

So, yes, it's looking increasingly like a global meltdown, and you know the headlines start to get real bad when journalists start worrying about their jobs. Its one of those irregular English nouns:
- if they lose their jobs its a slow down
- if you lose your job its a downturn
- if I lose my job its a recession
(for more fun irregular verbs and nouns, check out here)

And remember this is still before the coming crisis in credit card and unsecured personal debt, especially in the USA and UK. IMHO, that will make the current sub-prime mess look minor.

So, as the oil price drops too and waits for OPEC to turn down the taps, who in their right mind would invest?

Well, I still think that if you have cash, too much cash, there will come a time in a few years when you'll be kicking yourself for not buying now, or v. soon, in Bank Muscat and Galfar especially. But as some commentators have said, it's turbulent times ahead so don't go silly because although its ceap now it could be even cheaper tomorrow... The key for me is the oil price. A few months dip will be almost immaterial as long as it stabilises ~$60-70.

And it's hard to fathom the current silence from the Government. It's like they feel so stunned that their previous and repeated attempts to hold the MSM 30 index at ~9000 failed. Or they're so busy meeting their own margin calls... Or perhaps they think that if they act pre-emptively people will actually panic even more? Perhaps.

Photo: The latest in high-tech trading software currently being used in Muscat's Stock Exchange

In Oman's corridors of power the global mood and especially the precipitous drop in oil price is bringing on a lot of nasty flash-backs to 1998, when the country almost went broke. So it's cold compresses all round in the Council of Ministers right now, along with some pretty serious contingency planning if a case of the 1998s returns. Luckily Oman is not up to its eyeballs in debt anymore, at least on a Government level.

Remember the cover of the Hitchhiker's Guide to the Galaxy folks...

Omani youth protest over jobs in Duqm

Perhaps this is a sign of things to come, and it has happened many times before, but interesting that it got reported at all I guess. 100+ 'youths' in the far off place of Duqm had a sit-in protest at not being given jobs in the local construction work for the dry dock being built there - apparently the first of many grand investment plans for the area.

The situation reflects the tremendous importance of job creation to the medium-long term stability of Oman. This is why so many state subsidies are being used to generate new industrial centres (eg Sohar, Salalah), the multitude of tourism plans, and the various other things the Government are trying to do. They know the demographic wave (remember half of Oman's population is under 18) is coming.

I like the way the report basically says the local Wali and ROP guys (who wouldn't be able to take on 100+ youth on their own) seemed to say "OK lads. Fair point. Now stop blocking the road and come down to the walli's office for a chat. I'm sure we'll work something out." Quaint.

There certainly isn't much else to do in Duqm except a bit of fishing and raising goats. Its half-way between Muscat and Salalah, and at least it's by the coast. It is a really beautiful place, and while the development in some ways is a shame, you can't eat landscape, and there's a LOT of landscape in and around Duqm.

Whether the youths will be happy to hump rocks at the wages given to expat labourers is something else, but probably they wouldn't need too much more given their options.

Again, I say establishing a mechanism of some kind to make it more attractive to hire Omani for low-skilled jobs in contruction is required. Minimum wage (for all, not Omani), bigger tax on expat visas for certain jobs, higher standards of construction that rely on more machinery and less guys with shovels... But meanwhile its great to see people taking peaceful action to try to improve their lot.

Anyone got more details on what's happening? Pictures? I hope they didn't wait until winter on purpose! Lugging rocks in summer doesn't sound like much fun.

Times of Oman article
Omani youths stage protest in Duqm
Rashid bin Ahmed Al Baloushi
Monday, October 27, 2008
DUQM — Around 100 Omani youths from the wilayat of Duqm staged a sit-in here yesterday protesting against a company involved in the construction of a dry dock and seaport here not giving jobs to the local citizens.

The protesters blocked the trucks carrying rocks to the seaside causing traffic jams for hours. They demanded of the company give preference to the local citizens in its recruitments.

The protesters said that their job applications had been pending with the company for more than a year and-a-half.

A source at the Royal Oman Police said the Ministry of Interior, represented by the Wali’s Office in Duqm, had asked the protesters to meet the officials concerned in the Wali’s Office and assured them of suitable action on their demands.

Sunday, October 26, 2008

MSM bounces back down again

Just to keep you up to top speed, another bad day for the Muscat market today. Down down down by around 9% to its lowest since late 2007 at ~6506.

MSM 30 Index today

Bank Muscat back to 0.900 biasa, below where I tipped it last week (but you already sold on the bounce, right?).

Still think there's money to be made on the volatility combined with the fundamental floor the Government must place under the big public/private companies (BM, Omantel, NBO).

There will be lots of ups and downs to come. Try to sell the highs and buy the lows.

What I'd do: The AGCC Conference - and cancelling tourist reservations

Lots of interesting comments on the previous hotel cancelation story. Amjad had a good question: what did I think should be done? Rather than comment back, it started getting a bit long, so here it is as a post.

All in all Amjad - I'd guess I'd have done a hell of a lot more work and planning than seems evident...

1/ Generally the Government should look pretty seriously at who it puts in charge of such things and get someone who can plan and execute a programme of this magnitude more effectively. [That said, I suspect its only a small part of the organisational effort thats going a bit awry.]

2/ On the topic at hand - AGCC date change, hotel and flights cancelled, derogatory stories on Oman and HM in the international media, annoyed hoteliers and travel agents:

The issue is the late timing change - people book holidays many many months in advance. If you - as a travel agent - had made the block hotel bookings and made arrangements with airlines, I doubt you'd want to leave selling the packages you created until just 2 months to go! 60 days is almost nothing.

I would have already had a compensation plan ready to roll out [my estimate, ~1000 people, at 1000 pounds + some PR costs = 1 million rials. Thats peanuts compared to the overall budget for the conference].

I would first have had people pro-actively engage with the travel agents and the hotels, to find out exactly the best options (ie: not a top-down blanket order to take all 6 hotels for a fixed period), and to tell them that we understood the problems this would cause, that compensation and assistance would be provided, and to give some explanation(s) for why the late notice was totally unavoidable.

I would be a bit more careful how many rooms I take. I still find it hard to believe they need all 6 hotels. Sounds like someone just being extra-safe to have enough rooms (and regardless of the consequences), probably because the basic work on exactly how many rooms, where and when hasn't been done yet.

The whole thing would tie into a pre-existing and much broader communications & PR strategy and plan, already aimed at maximising the good press for Oman and HM that hosting such a major conference offers. Hosting AGCC should be a huge free PR BOOST to the Omani tourism industry, especially in the GCC markets, but also internationally. That takes an effort tho'. (Of course I would have a professional PR/Communications company with demonstrable experience in doing this stuff involved a long time ago.)

I certainly would be doing some urgent action [cash & PR] to correct the current situation of articles like this appearing about HM and the way Oman doesn't seem to care about ruining the holiday plans of hundreds of customers.

I'd be trying to turn the current cock-up into a great story about how some Omanis did fantastically, dealing with a crisis that was caused by forces outside their control, getting people sorted out, organising the event, etc.

In fact, I'd already have planned for a whole host of mini so-called 'human interest' stories on many of the key people involved in executing such a massive event, : the security guys, IT, logistics, chefs, entertainment, Oman Air, the airport, the protocol people, emergency medical staff, local tourist operators who will host some delegates, .... All with nice little stories and pictures so that not just the Times of Oman would print them, but they could go on the wire. The messages in the stories would be tied into a 'red thread' strategic message of Omani friendliness, competence, efficiency, hospitality, trust, & an example of the successful development since the 'blessed renaissance'.

And this is just the PR slant. Actually running an event like this is a HUGE undertaking.

Plan B
But I suspect the real actions going forward will be performed by who-ever thinks they have a good chance to take the hit for the mess-up:
- Try and ignore it. If no-one reads about it or talks about it, there is no problem. Certainly ensure there is nothing reoported in the local press. If ignoring it doesn't work, try and hush it all up.
- Ensure that lots of stories go out about how politically important the conference is for Oman, how everyone is looking forward to it, how fantastic everything is going.
- Stress how plenty of notice was given to the hotels, and that very few people are affected. Point out how many other hotels there are, and that keeping a few people from the west happy, people who selfishly wanted to celebrate Christmas by threatening the most imprtant conference on the ME agenda, people who don't understand how important this is to Omanis and the region, is immaterial. State that these whining expats with their fancy spoilt tourist tastes are the unfortunate few who are totally non-representative of the many who are very happy to go somewhere else, or to reschedule for a later time, and that anyhow its all the responsibility of the Hotel management, because as previously pointed out the Government gave them loads of warning.
- See how much I can lay at the feet of external forces beyond my control.
- Attack the Telegraph story and any other negative reports as being insulting, totally incorrect and simply infamatory. (for a good example of how to use attack as a form of defense when faced with a bad story, see the well organised Government response to the recently critical US State Dept report). Imply that we are seeking to take legal action to protect our reputation from such unfair attacks. Hopefully I can even figure out a way to tie ownership of the Telegraph to the Israelis. Worst case I could just get someone else to imply the Israelis are behind it.
- Stress contantly how the very best efforts have been made by everyone in the Government to host such a complicated and important conference. Efforts that simply could not have been better, because they were perfect.
- Have some stories on how great the Al Bustan Palace Hotel is looking, and how valiantly the impact of the devastating unsual weather was overcome.
- Ensure my immediate superiors are reported as having done an outstanding job.
- ...

You get the idea.
You can also see how useful Essa would be in implementing either plan...

Does that answer your question?

Saturday, October 25, 2008

Diwan and Ministry of Tourism manage to get bad press for His Majesty in the UK

An interesting story in the UK press yesterday (as linked to by the always on the ball Muscati) is all about how the Sultan of Oman has spoilt Christmas. I for one would not like to be the person responsible for getting HM named in a headline like this:
Oman holiday plans wrecked by Sultan.
Thousands of travellers face losing their Christmas holidays in Oman after Sultan orders hotels to be emptied for a conference.
This is bad. It makes HM look like he himself decided to personally play the lead role in an Omani version of The Grinch who stole Christmas.

Ah yes: The combined forces of administrative excellence embodied by the civil servants at the Diwan (Royal Affairs) and the Ministry of Tourism have apparently managed to ruin the holiday plans of hundreds of tourists who had hoped to come here in the height of the peak season.

The poor tourists had understandably pre-booked hotels and flights some time ago. Only to have the Diwan tell the Ministry of Tourism (sic) to just go-ahead and confiscate all Oman's best hotel rooms for the period Dec 24 - Dec 30th. The poor English dears can't be blamed for not knowing that hotel bookings are not required in Oman for those with enough Wasta.

Here's one of the letters (source: Daily Telegraph) from the Ministry of Tourism...

So, I would think a potentially career limiting move by who-ever was responsible. I notice the letter was sent over the signature of one HE Mohammed Al Tobi, MOT Undersec. Well done the Minister for delegating that one. OK, they might need the hotels, but to imagine that you can, in a tourist market as limited as Oman, in peak season during Xmas/New year, just give 2 months notice via letter to summarily take all the rooms in the 6 best hotels, and without paying compensation, is naive to say the least. It doesn't matter that the Government own the hotels.

You can still see that news of the Diwan's block booking has yet to filter through to the travel agents, eg here at 'The Holiday Place'

Special Quiz for my Non-Native English speaker readers:
Test your knowledge of quaint traditional English idiom! Can you arrange the following 4 words/phrases to describe the diplomatic, Public Relations and commercial skills of the Omani Government's organisers of accomodation for the GCC conference?
1- organise
2- in a brewery
3- couldn't
4- a piss-up

(Answer at the bottom of the page)

Unfortunately, I suspect this is a story that will be picked up across the world. Someone in the Diwan and Foreign Affairs Ministries - and perhaps someone a little more senior than those perviously in charge? - should get on the case and act fast to provide compensation and turn the story into more of a "There is a Santa! - Generous Sultan rescues Christmas for hundreds of English families"...

here's the full article - I especially like the last line...
what a load of muppets.
Oman holiday plans wrecked by Sultan
Thousands of travellers face losing their Christmas holidays in Oman after Sultan orders hotels to be emptied for a conference.

By Charles Starmer-Smith
24 Oct 2008

The Christmas holiday plans of thousands of travellers wanting to visit Oman have been wrecked after their hotel bookings were cancelled to allow the Sultanate to stage a conference.

The Gulf Co-operation Council Summit (GCC), attended by the heads of state of Bahrain, Saudi Arabia, Qatar, Kuwait, the UAE and Oman, was originally scheduled for June last year, but was postponed because of the cyclone that struck Oman. It was rescheduled for November 18-26, but on Tuesday of this week was moved to December 26-30, the peak week for travel.

Every room in six of Oman’s leading hotels, including two Shangri- La properties, three Intercontinentals and the Grand Hyatt, is being given over to those attending the conference – a move that one British tour operator said is likely to result in legal action.

“It is outrageous. I am stunned by their arrogance,” said Nick Van Gruisen, managing director of The Ultimate Travel Company. “This will put the many operators who have booked rooms in good faith in breach of their contract with their holidaymakers. We have been given seven weeks’ notice and it will be impossible to find them alternative Christmas holidays at this late stage.”

Mohammed Al Tobi, the under-secretary for the Omani Ministry of Tourism, this week wrote to the general manager of the Barr Al Jissah Resort & Spa, in which the two Shangri-La properties are housed, and ordered “that immediate measures be taken to ensure that both the Al Bandr and Al Husn hotels will be at the complete disposal of the Diwan of the Royal Court [central body of bureaucratic affairs] from December 24-30”.

Mr Van Gruisen said that customers of his company who were due to travel to Oman had already paid and had been left with their Christmas plans in tatters. Many might feel inclined to boycott the country as a holiday destination in future.

Lesley Rollo, managing director of Thomson Worldwide, said that it would give a full refund to all clients whose holidays have been affected by the conference.

Holidaymakers who have booked rooms in the six hotels independently will not be entitled to refunds on their flights and have little hope of finding other accommodation.

Hoteliers in Oman said they have been given no choice but to try to send customers elsewhere or make refunds.

Tony Zamora, director of operations at Intercontinental Hotels Group in Oman, said it only received confirmation on Tuesday that the summit was to take place, and all three of its hotels in Muscat – the Al Bustan Palace Intercontinental Muscat, the Intercontinental Muscat and the Crowne Plaza Muscat – were needed.

“We already have a number of reservations for this period and are truly sorry for the inconvenience this is likely to cause. We will work with our travel partners to make alternative arrangements, including offering accommodation at our sister hotels in the region and alternative dates at the hotels affected,” said Mr Zamora.

A spokeswoman confirmed that the hotels have nearly 550 people booked in during that period.

A spokesman for the Shangri-La hotel group said it had no choice but to follow the directive, but added that all deposits for rooms in the Al Bandar and Al Husn will be refunded. “This is a situation that is entirely out of our control as these are directives from the highest levels of authority within the Sultanate of Oman and we are compelled to comply,” he said. “We sincerely regret the disruption and distress this will cause.”

Sean Tipton, a spokesman for Abta, said the situation could be damaging for the hotels and the destination as a whole.

The Oman Tourist Board was unavailable for comment as we went to press.


Bad boys, bad boys, what you gonna do...

Strange little story today in the Tribune about juvenile crime. As per usual, no analysis.

It seems Omani youth are getting naughtier, and no surprise, mainly boys.

I'd still like to see one of the papers start a half decent court report.

No mention of course of the group fight & stabbing that took place in a local night club a couple of weeks ago, and that resulted in the subsequent death of some Omani youth.[Actually, later turns out stabbing was in Shatti, not in the nightclub. oops. As I had to tell the staff 'The floggings will continue until moral improves' UD] Its now a regular occurance in many of the pubs that groups of Omani lads fuelled by heineken and vodka red-bulls will find something to start a fight about.

I still insist the immature behaviour of most Omani late teenagers/20s is due in large part to a simple lack of sex combined with unemployment. Because it's so expensive to get married these days (~5000 rials dowry + ceremony etc), and the girls also want a guy with a decent job, most Omani boys have no real hope of marrying until their late 20s or early 30s.

And when you've been flushed with testosterone from the age of ~13, that's a long time to wait. Meanwhile you can drive a lowered VW Golf pimped up with pieces of Chinese plastic really fast, cruise Shatti, stare at the expat women, watch downloaded or blackmarket porn, and defend your manhood in the bars.

1,115 crimes by juveniles in 2007
By Khalid Al Amri
Muscat: The number of juveniles who committed crimes in the Sultanate in 2007 amounted to 1,115 compared to 1,059 in 2006, said HE Hussein Bin Ali Al Hilali, Prosecutor-General in a special statement to Oman Tribune.

“The growth in the number of juvenile crimes does not necessarily mean a growth in the trend as it may reflect alertness by the officers in tracing those involved in such crimes. The general prosecution investigated 23,701 cases in 2006 including 1,059 compared to 24,285 in 2007 including 1,115 by juveniles,” he added.

As for the major crimes by juveniles, Al Hilali pointed out that they include simple harm 225 incidents and 215 of them were committed by boys and 10 by girls. The number of theft crimes in 2007 amounted to 240 including 211 by boys and 29 by girls.

Wednesday, October 22, 2008

Winds and cloud are from Yemen

That 'poor' rated Tropical Disturbance in the North Indian ocean decided to turn into a weak Tropical Cyclone after all, and is now causing the beautiful clouds we're seeing in Muscat, and the mild rains in Salalah.

It will hit landfall in Yemen, thankfully.

It is NOT another Gonu.

Omani Woman Taekwondo Black Belt

Here's a nice little human interest story today in the Tribune about an Omani woman who's literally kicking ass.

Its really great to see someone getting past the all too typical response a lot of Omani girls get when trying to be strong and independent: "but my brother (or father, Huscand, Uncle, or Mother) was dead against it".

Well done Ms. Warda Al Jabry. Fantastic.

In love with taekwondo

The mindset must change, the sport is not as violent as is made out to be, black belt Warda tells Sneha Chandy.

WHEN Warda Al Jabry went home with a black eye after a taekwondo joust, her mother couldn’t ‘take’ it anymore. “You will never go back,” she thundered. The gutsy girl has put her body through a lot. “I’ve fractured every toe,” she says flippantly. She even hurt her back when after bounding into the air she landed on her back instead of supporting her weight on her hands. Even the doctors had enough of piecing her back together. “They told me they don’t want to see me as a patient again!,” she laughs. But injuries have never halted Warda in her taekwondo tracks, the first Omani woman to get a black belt, in 2003.

Spunky Warda stealthily started taekwondo classes in 1999. “I always wanted to enrol in martial arts classes, but my brother was dead against it. He’s into karate but he couldn’t stomach the idea of his sister indulging in such ‘unfeminine’ activities. One fine day I tagged along with a classmate in college to join a karate class. But my brother held me back. I waited till I started working and then joined taekwondo classes. My brother had no idea what I was up to.”

She played hide-and-seek for a while till the day he accidentally saw her all tough and feisty in her martial arts uniform. Needless to say, the brother and sister had a mini duel.

“Later on, he gradually accepted it when he saw I was good at it. Now he’s proud of me and supports me whole-heartedly.”

American Embassy warns ROP getting tough (again)

The American Embassy have issued a reminder (below) that the ROP are (apparently) getting tough again. I wish. I saw at least 3 red light violations just on my way to work this morning.

(Thanks to one of my American sources for the feed, BTW. You know who you are.)

Warden Message - Traffic Violations
The U.S. Embassy in Muscat wishes to inform the American community in Oman that the Royal Oman Police is now working to more strictly enforce regulations with regards to traffic violations, including red-light violations. The consequences for being stopped for such a violation are, by U.S. standards, severe.

For example, red-light violations carry a mandatory and non-bailable detention period of 48 hours, followed by confiscation of driver's license, vehicle registration, and car registration plate until the Omani judicial process is concluded, a period that might be as long as several months.

Other common traffic violations that carry strict penalties, up to and including jail sentences, fines, and/or deportation include:
* Driving without a valid license;
* Driving under the influence of alcohol;
* Non-use of seat belt;
* Talking on cellular telephones (other than hands-free) while
driving; and
* Violating traffic laws in a reckless manner, such as excessive
speeding, overtaking, and screeching of car tires.

In the event of a traffic violation and fine, American citizens are strongly encouraged to cooperate with police officers and not attempt to negotiate payment at the traffic stop. Effective June 1, 2007, the Royal Oman Police (ROP) introduced new procedures for minor Road Traffic Accidents (RTA) to reduce traffic jams. According to the ROP, the new procedure is currently in force in the Governorate of Muscat area and will eventually be implemented in the other governorates and regions of the Sultanate. American citizens considering driving in Oman are advised to familiarize themselves with the new procedures available on the ROP website at
under "Minor Road Traffic Accidents."

Note: Minor Road Traffic Accidents are defined as those causing minor damage to one or more vehicles, but with no in injuries, deaths, or material damage to public/private properties. Parties involved in minor RTAs should immediately move their vehicles to the side of the road. American citizens involved in accidents outside of the Muscat area are advised not to move their vehicles from the accident location until the ROP gives them the permission; moving a vehicle may be interpreted as an admission of guilt.

Sunday, October 19, 2008

Your chance to Vote in the US elections!

The Economist is holding a 'global vote' for the US Presidential Elections. Unfortunately Oman needs more votes before it will count the vote, so why not go vote? You have to register, but it only takes a minute, and is free.

Go to The Economist web site

Obama is a CLEAR global favorite, obviously. While anyone would be better than Bush, including my cat, (well, other than Palin!!) The Dragon strongly favors Obama.

But vote for who-ever you want. But lets get Oman on the map.

False Gonu II rumours again - Don't Panic

Just in case you hear more rumours blowing around about another Gonu II risk yet again...

Yes, there is a 'tropical disturbance', a long way south of Salalah at present, not currently rated as being very likely to turn worse.

here's the latest image from the American Navy JTWC

The tropical disturbance is the white spinny thing marked 'poor'.

There IS a tropical cyclone in the Indian Ocean, but in the southern Indian Ocean. That's the thing marked 'TC01S'.

Nothing to worry about at all just yet folks.

2 Omani youths jailed for dangerous driving

The national disgrace that is Oman's driving and resulting death toll needs more reporting of drivers receiving penalties. But why is this story only reported in the Gulf News today? As per usual, nothing in the Omani English papers.
Gulf News
Two Omani youths jailed for rash driving
Published: October 19, 2008, 00:03

Muscat: Two young Omani nationals have each been sentenced to two months in jail and asked to pay a fine of 600 Omani riyals for "dangerous driving".

According to a report in government-run Arabic daily Oman, the primary court in Shinas, 250km north of Muscat, found the two youngsters guilty of rash driving that put lives of others at risk.

The paper quoted the public prosecution as saying the car had no insurance cover or even proper brakes.

The licence of one of the youngsters, who was showing off a trick when the vehicle skidded off the road, has been cancelled.

Saturday, October 18, 2008

More from the land of freedom of speech

Just a light hearted post on how fantastic it is what freedom of speech can achieve in the USA. Can you imagine this happening in the Middle East ever?

First this YouTube parody criticising Sarah Palin is great. Muscati linked to another blog showing it too, but I couldn't resist putting it here 'cos its just so god-damn funny.

Then there's a nice piece from the classic satirical magazine The Onion. We need more of this style of reporting here in Oman.
Bush Calls For PanicOctober 15, 2008 | Issue 44•42

WASHINGTON—In a nationally televised address to the American people Wednesday night, President Bush called upon every man, woman, and child to spiral uncontrollably downward into complete and utter panic.

President Bush addresses the nation shortly before shaving his head and soaking the Oval Office in his own urine. Speaking from the Oval Office, Bush assured citizens that in these times of great uncertainty, the best and only course of action is to come under the throes of a sudden, overwhelming fear marked by hysterical or irrational behavior.

"My fellow Americans, the time for running aimlessly through streets while shrieking and waving our arms above our heads is now," Bush said. "I understand that many of you are worried about your economic future and our situation overseas, and you have every right to be. Yet there is only one thing we as a nation can do in times like these: give up all hope and devolve into a lawless, post-apocalyptic, every-man-for-himself society."

"For those of you who have remained resolute in your belief that things will turn around eventually, I urge you to close your eyes, take shallow rapid breaths, and begin freaking out immediately," Bush added. "At this point, anyone who isn't scared to death needs to wake the fuck up—because we're screwed here."

The president then picked up the telephone from his desk and hurled it through the Oval Office window.

During the address, Bush laid out a historic five-point plan for panic that he hopes will help the American people fall apart as quickly as possible. The plan—which many are calling Bush's most well-thought-out proposal to date—calls for citizens to abandon their daily routines entirely, and engage in a weeklong period of bloodcurdling screaming, arm flailing, dry heaving, and gnawing on one's fingers while rocking back and forth in alternating bouts of maniacal laughter and gentle sobbing.

Under the new bill, Americans are also advised to withdraw all their money from U.S. banks and the stock market, place it in a Maxwell House coffee tin, and bury it in a safe place in their backyard. In addition, Bush has urged the legalization of Americans trampling one another in a mad rush to compete for the nation's dwindling resources, and proposed allocating $3 billion toward a program that would give every citizen a gun and a bottle of 140-proof whiskey.

The final part of the plan calls for the immediate release of all convicted felons and death-row inmates from the nation's prisons.

Immediately after Congress approves his plan, the president said he will order multiple B-2 stealth bombers to fly over America's cities at low altitude. The resulting sonic boom, Bush said, will set off all car alarms and cause all babies to cry uncontrollably, which he believes will promote a real sense of chaos throughout the nation. In addition, Bush intends to release 50 live cobras into the Senate chamber.

"I realize this is a difficult vote for members of Congress, but at this critical time in our nation's history, it is imperative that we not sit back and pretend like everything is fine, because everything's not fine, it's just not," Bush said. "Even if Congress fails to act, I still intend to do what is right and lead this country into mass hysteria by acting outside the framework of the U.S. Constitution, overriding the entire democratic process, and setting the Lincoln Memorial on fire."

Early reactions on Capitol Hill to Bush's call for panic have thus far been positive. Leading House Republicans and Democrats said they appreciate the president's candor, and will encourage their constituents to comply with Bush's request to "find something and smash it with all of their strength."

"For most of the day tomorrow, I intend to do my part by remaining in my boarded-up home and getting worked up about our standing in the world," Pacoima, CA resident Harold Miller said. "And then at night, I plan to lie awake in my bed and be scared to death about the loss of my job, pension, and retirement fund. Then I plan to run out into the streets in my bathrobe and shout that the End of Days is coming."

Bush told Americans that if at any point they catch themselves feeling even slightly at ease, they should remind themselves that, in the end, everything is going to be completely fucked.

Simply brilliant.

EX-Muscat Municipality Chairman's Building in Shatti - Another one bits the dust?

Rumour of the day today is that the brand new building next to the Hyatt, allegedly built and owned by ex-Chairman of the Muscat Municipality, HE Eng. Abdullah Bin Abbas Bin Ahmed, will soon either be demolished or confiscated by the Government.

The reason apparently is that it's against building regulations, and of course that there might not have been sufficient checks and balances on the issuing of the permit, seeing as how HE Abbas was responsible for issuing such building permits. Concerns have been raised about its impact on the sewerage system, and the fact that the land was originally a small public garden.

This would mean it joins the fate of ex-Minister Juma bin Juma's new building near the airport where allegations of similar 'building permit issues' were being spread around the town.

Anyone heard anything similar?

Thursday, October 16, 2008

His Majesty points out how crap Omani Journalists are

Spooky. Who would have thought?

HM issued an instruction earlier this week that all Omani new reporters and journalists are to be given extensive training to get them up to commonly accepted international standards. It’ll be interesting to see how that works, with the pervasive and restrictive self-censorship that occurs in the local rags apparently caused more at the editorial level than by the chaps in the engine room.

So, its HM mandated training for the boys and girls of Oman’s glorious 4th Estate. (I suspect the Pulitzer Prize is pretty safe in US hands for a while yet!) The program will be run by the Ministry of Information, an oxymoron if ever there was one for a Ministerial title.

I wonder if Essa will sign up too?

The only slightly ominous part is the little bit in the story that "The Ministry of Information began to enumerate and classify local press personnel towards the development of a database of their qualifications, current experience." [that's their sentence structure BTW, not mine. Perhaps some English grammar training as well...].

And they will all be interviewed by the MOI too. Hmmm. I bet that will be fun. No wonder (according to the Ministry of Information) "The journalists and media persons valued the Royal gesture." I'm surprised they didn't say "greeted with delight..."

Royal orders to conduct training for Omani journalists, media personnel

MUSCAT — His Majesty Sultan Qaboos has issued orders to conduct training courses and programmes for all Omani journalists and media personnel. Hamad bin Mohammed al Rashdi, Minister of Information, said that the Royal directives are aimed to upgrade the skills of Omani journalists and media personnel to a professional level that reflects the development witnessed by the world media and the progress achieved by the Sultanate in various spheres. During his visit to the Oman Establishment for Press, Publication and Advertising (OEPPA) yesterday, the minister stressed that the training programmes will be available to all Omani journalists and media personnel in government and private establishments.

The courses will be conducted in stages starting locally and culminating at leading Arab and international journalism and media organisations. Al Rashdi added that the programmes will also cover technical staff whose work is directly related to the press. The Ministry of Information began to enumerate and classify local press personnel towards the development of a database of their qualifications, current experience. Accordingly, training requirements will be decided in tandem with the duties and responsibilities of the journalists/media personnel, he said. The journalists and media persons valued the Royal gesture which, they said, comes within the context of His Majesty’s keenness on promoting the capabilities of Omanis in all nation-building fields.

They noted that the Royal gesture is a strong evidence of the important role the Omani media play in promoting the Omani society"s culture towards further higher grades of progress. In its preparatory stage, the ministry has started registering all Omani journalists from the media for further training in their respective fields of specialisation in the very near future. In its preparatory stage, entrants will attend interviews supervised by the ministry. The courses will be conducted by prominent journalists and academicians in this respective field from within the country and abroad. Qualifying entrants will further train at prestigious media institutions overseas.

yes we're back folks

Wow. Omanhell have fixed their bugs and now you can comment again. And we can all blog without the VPN.

Joy. Wow. Great. Oh, Omantel. Thank you for not fcuking up for more than just a few days. Hope the filter is now back to full operational mode.

All I can say, I guess, is thank Christ they're not brain surgeons... or running anything important like the country's water supply....

Oh, hang on, may be they're doing that too!!!!

Wednesday, October 15, 2008

Ministry and The Times of Oman say ‘Everything’s OK in the Markets’

Both the Ministry of Commerce and Essa Al Zedjali say everythings alright in the market, well regulated, etc etc. So that’s OK then. (but always interesting to see how a comment by HE Maqbool or HE Mackie is always followed by an obsequious follow-up of unquestioning support in the Times of Oman the next day).

But, strange that if everything’s so great why the Government have not issued a guarantee to all depositors and promised to stand behind inter-bank loans, as was done in the UAE earlier this week. If everything’s so solid, it wouldn’t cost them anything would it?

I’d also still like to see something a little more detailed on the banks' liabilities, not withstanding Muscati’s comment that the big institutional investors had been briefed by Bank Muscat last month. They haven’t told the smaller guys or the public, nor issued a formal statements to shareholders apart from the usual profit/loss statement.

If you’d followed my tip on buying BM & Galfar on Sunday you’ll already be up. Good luck. The main thing is oil price. If it stays above $60, Oman is fine.

Maqbool allays fears of financial meltdown

ONA Tuesday, October 14, 2008
MUSCAT — “There is nothing to worry about the current global financial crisis and the government is closely monitoring the economic situation,” said Maqbool bin Ali Sultan, minister of commerce and industry and chairman of the Capital Market Authority (CMA), yesterday.

He was addressing a press conference on the CMA premises during which he pointed out that the Sultanate’s financial and economic situation in general, and that of the banks and public companies in particular, were excellent.

This was followed the next day by Essa's exhortion to buy shares, neglecting to mention that if you'd listened and acted the last time HE Maqbool pumped the market you'd have lost around 30% of your money, but hey, details.
Cashing in on crisis
Times News Service
Wednesday, October 15, 2008
WHEN Maqbool bin Ali Sultan, minister of commerce and industry and chairman of Capital Market Authority, comes out to console the worrying investors with a “there’s nothing to worry about” message, one has to stop and listen.

Infamous Muscat Rugby Club to re-open this weekend

Muscat Rugby Club is a famous boozing joint, where occasional rugby is played too, out in Al Khuwair near the ABA school. It used to be a regular place for expats to go watch sport and get smashed on cheap drinks.

But, last year when a drunken crew of visiting Kuwait-based expat rugby boys abused the ROP for trying to interrupt their bacchanalian revels, after their post-match party had spilled into the street outside (with stories of a few of the players being in drag for some reason), the ROP came back with their own version of ‘fcuk you too’ and simply closed the whole place down, withdrawing their license.

Which seems fair enough.

But I’ve been told this info obviously hadn’t reached the big boss. When an Englishman, who was known by the Diwan to be a rugby fan, was meeting with a senior aide to His Majesty a few months ago on an unrelated matter, he was apparently asked how the Muscat rugby club was doing. On being told that it had been closed down by the ROP for ages, the aide looked a bit ill and scurried to HM, returning to say that the club had been a gift from HM to the British people of Muscat and that the situation would be sorted asap. Clearly no-one had bothered to think the club’s closure was something HM needed to know.

And so, it’s officially open for business again chaps. With a bit of a tightening of the rules naturally, and I especially like the revised guidelines on "how not to piss off the good officers of His Majesties Royal Oman Police after imbibing 12 pints of Stella while wearing a skirt". Membership is a quite reasonable 60 rials a year, entitling you to enjoy subsidized alcohol in the company of extremely inebriated British and Ex-Colonial rugby lads, who generally enjoy a bit of full contact ball-playing with their pals. If that’s what you’re into, there is no finer establishment in the Sultanate.

What most expats don’t seem to know that almost all the pubs and drinking holes in Oman have a regular watcher from Internal Security keeping an eye on things. Ever noticed the quiet middle aged Omani guy, usually in the corner at the bar on his own, quietly nursing a pint of beer and looking bored out of his skull? That’s him. It’s mainly to keep an eye on the younger Omani lads and to call the ROP riot squad in a timely fashion if things get out of hand, or to know if one of the less constrained HHs [His Highnesses] from the extended Royal Family is getting a bit wayward. Have a friendly chat with him next time, and you may make a very useful acquaintance.

Perhaps I'll see you at the MRC...

Omantel fucks up our internet access.. again

Yes folks, you haven’t been able to comment on the posts recently, at least if you live in Oman. And in theory I haven’t been able to post either, because Omantel have also blocked access to blogger sign on. Muppets. But access to the blog is not blocked, fear not.

(Of course, the real reason for the lack of posts on my part recently has just been that I’m a bit flooded by work dealing with the international economic crisis, and well, to be frank, they get a priority call on my time, after the family. Because you neither pay me shit loads of money nor give me lots of cuddles and kisses. But I’m sure you’re OK with that anyhow.)

The Oman bloggers have been frothing about it, including Kishor and most hilariously as usual, Suburban, in her fantastically titled post Suck this Omantel. Now there's a mental image indeed...

So, I guess you’re now glad of the recent post on getting around the filter! Well, unless that post of mine is the reason Omantel are now trying to block Google images, translator, etc… Oops. Sorry folks.

I have no actual hard data yet on why Omantel have done this. (Does anyone else out there have a relative in Omantel?) Inadvertent & incompetent, or Nefariously deliberate? I presume incompetence, not just because its my default expectation setting for everything and especially applicable to OmanHell, but also because the browser just hangs, rather than getting the nice ‘Omantel says No’ screen.

I expect they should sort it soon. Its probably side-swipe from more fevered attempts to block the various VOIP providers. Meanwhile, if you’re desperate you can email me important comments and I’ll post them if you like.

Saturday, October 11, 2008

Is tomorrow the time to buy Bank Muscat????

As you may know, on Friday the floor fell out from beneath pretty much every stock market in the world, and as the Muscat Market is closed on Friday, when it re-opens tomorrow its pretty clear where it will be going. Down. Down. Down.

The last few days the Muscat market has been as volatile as its allowed to be: down 10%, then up 10% (the price movement is capped at +/- 10% per day). (aside: The Government also seem to have set a floor on Omantel shares.)

So, if you've some spare cash, and want to gamble on getting a good deal and on there being no melt-down of the international financial system, talk to your broker about buying some shares at some time around 11:30am tomorrow. There's a good chance Bank Muscat will be available at bargain prices, although it can't drop below around 0.94 rials due to the cap. Its possible that it'll be even cheaper on Monday, especially if the international markets stay locked in lemming-mode, but I still think its a good long-term buy at anything around 900 biasa, if the numbers as reported are true. Same goes for Galfar around 1.1 rials, a company whose order books are full to bursting with well funded engineering projects.

As long as the oil price stays above ~$60 and people are actually able to buy the crude, the Omani economy will keep trucking just fine, thanks to major Government funded domestic infrastructure and Oil & Gas spending projects.

A huge problem is there have been no real official statements to the market on the status of Oman's banking system. What is needed now is not more adhoc waffle from the Government or the Chamber of Commerce on how cheap shares are and how solid the economy is, but some detailed audited announcements by the Finance Professionals in charge of the banks on what the actual exposure the Omani banks and banking system have to several important areas:
- The Oman housing and land market (which is also dropping like a rock)
- The Oman stock market
- Overseas investments in other stock markets
- American and European CDOs [Collateralised Debt Obligations]
- Unsecured personal loans
- Current provisions for non-performing loans vs latest non-performing rates and expected future rates of non-performance

While the banks seem to be well capitalised, and so shouldn't be going broke in normal circumstances (and are therefore reasonably safe as far as being a depositor goes), the above could have a huge impact on what they are actually worth as a shareholder.

The silence from the CEOs of the big banks is right now being taken as a sign that they are concealing bad news. The market will not recover until the air is cleared on these issues.

And if nothing is done, and the meltdown continues, there will be a big danger of a run. And if that happens, its a potential disaster scenario. No matter how big a punt you're willing and able to take on the markets (and right now a gamble is what it would be), take my advice and make sure you have a reasonable stash of cash, rice and perhaps a bit of gold folks...

The next few days may be crucial, for all of us...

The ferry saga continued – Business Consultant Essa to the rescue!

I should have done a post on this last week, but, ah, work sometimes gets too crazy.

Essa Al Zedjali, Editor of the hard-hitting Times of Oman, and (according to the Times of Oman) one of Oman’s most eminent intellectuals and authors, took issue last week with the pricing of the infamous new ferries, saying they were far too expensive and should cut their prices, and effectively asking for public money to subsidise the ferries even more than they are already... (see below). I actually agree with him.

I’d have preferred he comment on the lack of jetties, the half-assed decision to buy them in the first place, the lack of trained Omanis to run it, and who's actually paying for all this, but let’s get the financials right first!

The details are below, but the bottom line is:
- Almost no matter what they charge, the ferries are highly uneconomic. The cheapest way to operate the boats is to, er, not operate them at all.
- The most likely face saving 'solution' is to write-off the capital investment of the boats and jetties, and then try to cover the visible running costs through fares. Thats what the NFC is for, and is trying to do at least on paper. Even then, the Government is effectively subsiding the tickets by a HUGE amount.
- By my estimate, the true cost to the Government of a return ticket is around 400 rials per person if they only run 3 times a week and get some money from transporting cars eventually. Not counting the 90% fuel subsidy, the cost is around 140 rials per person per trip.
- To break even just on running costs, with generous assumptions on occupancy and cheap fuel, prices would need to be ~twice what the NCA currently charge.

Taking account of the true value of diesel, running the trip only 3.5 times a week, the Government will need to provide an effective annual subsidy of ~12-13 million rials a year, mostly through cheap fuel and providing the boats for free.

Ignoring the cost for the boats and jetties, and the fuel subsidy, the Government will still have to subsidise operations to the tune of 1.5 to 2 million rials per year.

Countries all over the world subsidise their ferry’s for social benefit reasons. Its obvious from the basic calculations below that Oman will have to do the same. I think the real answer is that the subsidy should be transparent, so people are aware that it is NOT an economic business. And you have to avoid giving the ferry company principals a blank cheque to pay themselves a fortune for running a money losing business.

At current fares, they will only pull in at most about 1 million a year, and with Essa’s suggested prices about half that. Compared to the costs, it makes no real difference to the real subsidy either way.

So, as I said on this blog previously, this is a great trip, mostly paid for by the Ministry of National Economy. And I’m almost afraid to say, I amazingly find myself agreeing with Essa. (I know, I find it hard to believe too. That’s why I had to run the numbers myself!) The subsidy needed is so high, that the price of the tickets is almost immaterial. Better to make them as cheap as you can, at least for Omani’s or residents, and fill the boat. Make up some of the money in the Khasab hotels, and on food and booze.

Personally, I’d take the second ferry and turn it into a floating Casino, based out of Khasab. And maybe think about running the ferry to Dubai and or Iran, as well as the Muscat-Khasab route.

I'm just glad I don't own the ferries... But I wish I was able to be Chairman of the company that does, and pay myself heaps of Government money for running a loss making business. Nice work if you can get it.

Picture: One of Oman's ferries in its most economic setting: out of the water, unused.

I decided to try and guestimate the breakeven price for the tickets.
Capital Costs
2 Ferries: reported purchase price ~26 million rials
Jetties: I dunno, but lets say another 5 million
Assuming a 6% discount rate (seeing as how the Government effectively owns them and can borrow the money pretty cheaply), and a 20 year life, that means you need 2.6 million rials per year to pay all that off.

Operating Cost
Crew of 12 x 2 ferries, manpower to run the jetties, some marketing people, … Probably about 1 million rial per year at least
Maintenance: Those ferries are pretty high tech: say 200k per year
One Ferry return trip Muscat to Kasab burns about 60,000 litres of diesel. Even at Government subsidized rates of 130 biaisa per litre, that’s 7,800 rials per return trip. (You should note, at current international rates for diesel, the Government could instead sell that same diesel for ~60,000 rials!).

If we do a trip every day (just to try and get the investment back by working the ferries as much as possible) that’s 2.8 million rials worth of subsidised fuel per year.

So, combining the above, it means every trip costs the owners ~18,000 rials. Just to break even. Running on highly subsidized fuel. What a deal.

Now, the income side.
The boats seat ~200 people. I don’t have the exact numbers, but lets say 10 VIPs, 20 1st Class, and 170 Tourist class. At the current rates from NFC, assuming VIPs don’t pay, and a 90% capacity, they receive ~8,300 rials in fares if they fill the boat. At Essa’s suggested rates they would take in at most ~3,700 rials.

So, even with current NFC rates they lose at least 10,000 rials per trip, 3.6 million rials a year. If they cut them further as suggested by Essa you’d lose around 15,000 rials a trip, or 5.3 million a year. (Note: If they had to pay real prices for the fuel though, that would amount to annual losses of ~27 million rials a year, and they may as well give away the seats it makes so little difference).

Of course, if the boats are empty at current prices, Essa’s absolutely right that you are probably better of cutting prices to fill the boat. The NCA’s original prices seem to be designed to roughly cover visible running costs based on subsidized fuel and assuming almost full occupancy. Their latest fare cut is probably just to try and lose less money and get more than 5 passengers a day. And of course the last thing you actually want to do is run the boat at all, because it just burns more cash!

Opinion: Times of Oman 5th October 2008
Two giant ferries in the Gulf of Oman!
Essa bin Mohammed Al Zedjali
Sunday, October 05, 2008 11:57:50 PM Oman Time

A FEW weeks ago I had read a news item in local papers that the second ferry named ‘Hormuz’ had joined the fleet of the government-owned National Ferry Company (NFC). A few days ago the local papers reported that the NFC has reduced the Muscat-Khasab-Muscat ticket price from RO74 to RO44 for the economy class and to RO85 for the first class.

The news item has been warmly received by the citizens. But we still demand that the company offers further reductions which are more in line with the income of the citizens and take into account the cost of living and the price hike that has affected people from all walks of life. This reduction is demanded because the two-way air ticket costs only RO49 for the 45-minute flight while it takes 6 hours by ferry.

A committee comprising representatives of the Ministry of Tourism, the Ministry of Transport and Communications, the Ministry of Commerce and Industry, the Ministry of National Economy and Oman Chamber of Commerce and Industry should have been formed before the launch of the ferries to determine the right prices of tickets. But it seems the board of the National Ferry Company has fixed the prices without taking into account the opinion of the said authorities.

This shows that the decision to fix the prices of tickets is taken randomly by the NFC board, without any consultation or coordination with the government authorities concerned, which has shocked and upset the citizens and made this issue the talk of the town during the last two months.

This project is of vital significance and aimed at facilitating the movement of citizens and residents to and from the northern coastal areas as part of the government’s wise policy of boosting domestic tourism. For this purpose, the NFC should have financial support from the government in order to enable it to run such a project safely and efficiently. The company could, at present, reconsider the prices of tickets, though it may increase them gradually later on.

We once again appeal to the National Ferry Company to reconsider the ticket prices and suggest a two-way ticket of RO20 for adults and RO10 for children for the economy class provided the ticket price does not include provision of food and drinks. We also suggest that the two-way first class ticket should not cost more than RO50 and should not include food and drinks. The passengers could have their meals at the coffee shops on the ferry.

By doing this, the NFC could rightly achieve the objectives of its logo "navigation in nature" as many people will prefer to travel within the country by two of the fastest ferries in the world in complete comfort and safety.