Tuesday, February 22, 2011

Libya goes to the wall... Bahrain's Crown Prince finds some space for dialogue for now. Yemen blames 'contagion'

I didn't have much to say on the swath of protests across the Middle East & North Africa. I'm sure you are all getting news from the 24/7 news cycle media reports, as they are legion.

Today, 2 Libyan pilots defected to Malta with their mirage jets after being ordered to bomb protesters. Gadhafi has tried to get around the problem of Army unreliability when ordered to open fire on their own unarmed citizens by using imported African mercenaries, who are indiscriminately killing protesters. It's looking like once again a nation will be looking to its Military to rescue them from demagoguery. Internet and local communications have been cut significantly. His Ambassadors world-wide are starting to disown the regime. It looks like a messy end for Gadhafi that will almost certainly be ended with either a real coup or a civil war. He's taking it to the mattresses.

But all this is being commented upon by people who know a lot more than me about such things.

See this: Rock the Casbah

The king called up his jet fighters
He said you better earn your pay
Drop your bombs between the minarets
Down the Casbah way

As soon as the shareef was
Chauffeured outta there
The jet pilots tuned to
The cockpit radio blare

As soon as the shareef was
Outta their hair
The jet pilots wailed...

The shareef don't like it
Rockin' the Casbah
Rock the Casbah
The shareef don't like it
Rockin' the Casbah
Rock the Casbah

Rock on.

So, what is the implication for Oman? A topic I am somewhat acquainted with in parts.
Well, on initial assessment, not too much. Oman has a high GDP per person at PPP*: US$23.3k. The Sultan is still held in the highest regard, and receives a Lèse majesté more by popular acclimation and support than enforcement. Oil revenue per person is also high and Government finances are excellent. There is huge scope in the short term for fiscal support. Cultural suppression is low, as long as everyone remains polite. Corruption is nowhere near the levels reported elsewhere in our region.

So far the revolts have not occurred only in countries with a low GDP per person. Wealth per se is not a defense. While Tunisia: $8.6k* and Egypt: $5.9k do have low wealth, Bahrain: $24k and Libya: $18.7k are in a range that includes Oman. Inequality can be as much an issue as averages, and Oman is not exactly fully egalitarian, it must be said. Also our HC production per person is declining, even though we were saved of late by the higher prices, so this has shielded the economy. Oil prices seldom stay high. [* PPP = purchasing power parity]

Unemployment is a big worry. Oman has a load of youth unemployment and under-employment already, with more coming at an increasing rate. With half the population under 20, this is unsustainable. 'Idle hands' and all that.

Plus the Shura and other moves towards ... 'institutional bodies populated by voting', have been toothless. There are no political parties allowed in Oman. The Shura can only review and comment - there is little real authority over legislation, and the body is not staffed with enough civil servants to enable more robust investigations to be developed independently of the all powerful Ministries. The country is effectively administered, day to day & strategically, by a select group of circles centered firmly upon His Majesty. Delegation of power has been difficult to attain. Even now it appears, too many common sense decisions have to be settled directly by HM's advisors or even HM himself. Real economic reform is still based upon centralised planning and infrastructure projects. The oligarchs are left to run the rest of the economy, which is based predominantly on 2 things: hydrocarbons and businesses with a large imported workforce (construction, tourism and retail/importing).

What if 'the contagion', as Yemen's President called all this silly protesting stuff, mutates and spreads to say, the region's imported working populations?... Hmmmm. After all, this is why China is rather worried right now. That would be a concern.

So overall, I'd be surprised to see problems in Oman right now. Maybe a few minor protests (as we've seen), which is cool. (although, anyone considering what would have been considered a 'minor protest' a few weeks ago would be pretty silly to organise one in the next few weeks if they really want to be polite and considered.)

Fiscal policy will probably be loosened further. Welfare benefits expanded. And all will be OK. Probably. Oman will actually gain a lot strategically just by remaining sane, safe and calm. There's probably no better base in the region right now.

But there remain those same long term underlying problems in Oman - unemployment, foreign labour, slowing GDP growth and inequality (of wealth and opportunity). Freedoms remain patchy. Restrictions on civil society and the media are very high. There is limited public political discourse on matters of Government policy or Ministry effectiveness.

Oman will hopefully take to heart the lesson of a 'near miss' this time, and will be even more mindful to accelerate reforms while they can. But the imperative must be clear.

The center cannot hold...


  1. Thank you Dragon !

  2. Apart from your root cause analysis, mob psychology can't be predicted. Quite often rebellion is fuelled by neighbouring countries or vested interests. It is good that Oman is friendly with Iran.

  3. If Anonymous above is suggesting that vested interests or neighbouring countries are responsible for the protests in the region, then I would respectfully disagree.

  4. Good to have your views, UD. As usual - very insightful and relevant.

  5. There was a fairly big march last Friday by some 500 odd people - on Feb 18th. http://www.muscatdaily.com/Archive/Stories-Files/Hundreds-stage-peaceful-march-in-Muscat-Muscat-Daily/%28language%29/eng-GB has the story.
    ONA carried a brief three line report - not coming up in search any more. You can try your luck. But this has been reported by newswires like AFP and AP also

  6. http://www.stripes.com/news/u-s-pakistan-military-chiefs-hold-secret-talks-in-oman-1.135707

    Pakistani, US chiefs hold secret talks in a "secluded resort in Oman". Interesting. Probably AfPak issues.

  7. I think ti should be noted that out of the 50% of under 20 unemployed at least 90% have not skillsets and therefore not very employable! Degree or no degree.

  8. http://www.financialexpress.com/news/Oman-king-scraps-India-visit/753907/

    HM Cancels visit to India.

  9. Check this

  10. Ta-Da, and now we have protests in Sohar - and I'm getting some reports (albeit secondhand) of a shopping center under siege (Lulu?).

  11. There were demonstrations in Salalah, Sur and Sohar yesterday. The largest in Sohar with over 500 people (some suspect these people are actually Emiratis). Nothing mentioned in local papers about it today; only about the royal decrees made by HM in "reshuffling" ministers. International news says a/some street light(s) were knocked over, but I have heard internal reports that it got a bit violent (obviously cannot be verified). Most slogans being chanted talked about creating more jobs and getting more money, but some were apparently talking of corruption and wanting Shura to have legislative powers...

  12. So much has happened all of a sudden in Sohar with quick response as well. UD where are you? Ofcourse local media has reported everything very well. But as always we lookforward to your more incisive analysis.

  13. What I'm wondering about the future here in Oman is that:

    1) Omani youth are not willing to do the jobs that match their skillsets (work currently being done by Asian/Indian expats), and

    2) Omani youth (in general) are not taking advantage of FREE opportunities to improve themselves through education.

    WHAT DO THEY EXPECT? How is this the government's fault? The subsidy for job-seekers is great because it is only enough to keep them from starving, not enough to support them.

    If they aren't willing to better their situations, they need to become acquainted with a shovel and a broom. In a free society, not everyone gets to be a manager.

  14. Hi, thanks for the interesting comments. I'm planning a week holiday in Muscat week after the next. Leaving in Europe is hard to me to have an idea of the situation there. Is there someone who can help in understanding which conditions I would find out there? Many thanks in advance, bye


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