PDO unveils its response to the striking/protesting Oil and gas workers; PDO staff form new Trade Union and secure regular meets with Minister Rumhy

Petroleum Development Oman - the dominant producer of oil and gas in the Sultanate and 60% owned by the Government - sent an email to all staff a few days ago detailing the managers' and shareholders' response to the protesting and striking employees: Yep, you guessed it, lots of new benefits! (These benefits will, of course, be paid by the people of Oman through immediately reduced oil and gas income, BTW.)

The protesters also got the annulment of the previous (and pathetic) 'Trade Union' and will elect a new one. AND HE Dr Rumhy, Minister of Oil and Gas, agreed to meet their representatives for a personal chat on a quarterly basis.

I was sent a few copies of the email, and thought it would be of interest to readers to see what the details were of the 'EVP' revamp [that's Employee Value Proposition in management speak].

The email is typical of why Oman has done so well getting a partnership with Shell at PDO, and why so many other businesses in the Sultanate have been stealing senior Omani PDO employees for years - quality talent. The EVP improvement plan is clear, specific, and gives a transparent timeline of the way forward. A good solid engineering approach chaps. If only the rest of the country could have such clarity...

The email's failing IMHO is that it says precious little about what the employees will do in return for such largesses: I would have recommended the removal of the right to strike as a pre-condition. As discussed earlier, PDO is the life blood of Oman's entire economy, and the ability to hold the nation hostage to blackmail your way into additional perks should not be acceptable.

The danger is that this may set a high bar for similar negotiations at other places in Oman. OIB (Oman International Bank), owned by the rich and mysterious Omani businessman Dr Omar Zawawi, for example, has effectively shut down for more than a week and staff there are in danger of killing off the very business they are employed in.

The Omani owners of businesses comprised of Indian staff must be laughing: so far there is no sign of the subcontinent workforce protesting nor of getting proper Trade Unions. No EVP revamp for the vast majority of Oman's workers then. Benefits like those below will simply make hiring an Omani even more of a stupid idea for businesses. It will, as now, be seen by many business owners as yet more red tape and tax to burden the business with, while most of the work gets done by expats. This will therefore further strengthen the big companies of the Oligarchs and hammer another barrier onto the SMEs that are the only hope Oman has of working itself out of oil and gas dependency.

Hey, but the PDO staff are OK, so that's alright. Hopefully they will be also be able to get petrol, as no-one else can with the tanker drivers on strike and rationing in effect...

Here's that goodie bag:


Photo: Not Santa, but Mr Raoul Restucci, Managing Director of Petroleum Development Oman. While he is an expat on secondment from Shell, his managing executive committee are all Omani, BTW.

MDC [UD: Managing Directors' Committee] Update on EVP Commitments

Dear Colleagues,
Recently, the MDC and I have had a number of staff engagements with you and have taken on board your feedback and demands to us. And today, we are pleased to outline our commitment, and timeline, to address your issues and a number of immediate improvements to staff members’ Employee Value Proposition (EVP).

Today
The HD Circular PDO.HD.09.11 will be issued concurrently to this note and will provide greater detail to these EVP improvements that we are providing staff:

EVP Improvement
1. Consistent with Government directives, all Omani staff will receive an increase of RO 50 for Salary Group (SG) 1 & 2; RO 60 for SG3 - SG6; RO 80 for SG7 - SG10; RO 100 for SG11 - SG15, as a cost of living adjustment effective 1st April 2011.

2. All Omani female employees can take the option of retiring at the earlier age of 55 years with a reduced discount of 2% per annum as requested;

3. TOPs trainees [UD: young operators of the oil field equipment], during their field training, will move to a “2 weeks on / 2 weeks off” shift cycle, inclusive of current holiday leave entitlement;

4. The hardship loan that staff can draw on once every three years will increase to RO 3,000;

5. PDO will pay 100% of Government hospital accommodation in private rooms for all employees;

6. Operating field staff attending HLD trainings during their rest days will receive days in lieu and accommodation in MAF camp will be provided for those travelling from our operating fields to attend a coastal-based training.


In addition to the above, today we also confirm the following:

· The MDC has set up a working team to engage with various groups to support the formation and elections of a representative PDO Trade Union. Those members include: Amran Marhubi, Ibtisam al Riyami, and Salim al Aufi, including HRR5 members Saif Shuaily and Ismail Raisi.

· In addition to the recently advertised 200 scholarships that PDO will be awarding to communities in our operating areas, PDO will also increase secondary school leaver scholarships to 50 in support of the country’s development.

· We have agreed to increase the number of technical college graduates from the current level of 90 to 180 per year for our TOP programme. This will help to accelerate our Omanisation plan and support business needs. We will also add a number of trainers to support this programme.

· We will continue to strengthen the participation and involvement of key operating staff in project design reviews as required.

· There will be a cross-PDO/Contractor team led by Saif al Hinai who will work to ensure that there is the right and consistent level of service and quality of life in all camps. This team will also work with OPAL to ensure that minimum standards are established across our industry and especially across the sub-contracting community, under our Duty of Care and value for Oman vision.

Further details of these initiatives will be communicated in due course on the PDO Intranet.

We are also actively working towards progressing additional improvements and changes. This is what you can expect from the MDC and I before the summer.


By the end of next week, we will:
· Complete the review of our operating field car fleet and provide (best estimate) replacement vehicle timings and targets to our staff;

· Provide details of the MDC Staff Engagement Plan in order to provide staff with greater transparency and increased engagement with all the MDC members. The goal of this engagement plan is to enhance discussion on key issues and opportunities and to improve the consultation process ahead of developing and communicating changes in company policies. The MDC and I will share market survey results, promotion process and outcomes, training aspirations, selection and outcomes with Trade Union staff elected and representative of PDO employees, as and when this information is available and representative bodies are established. Additionally, all emails/queries to the MD web-page will also be copied to Trade Union representatives so that they are aware of all submissions and associated replies.


By the end of April, we will:
· Review all proposals concerning the housing loan and where appropriate submit recommendations for approval by the PDO Board;

· Publish the Subject Matter Experts (SME) and Technical Expert (TE) roadmap, identifying and progressing targets in each function, and communicate the recognition package;

· Create a new web page within PDO Intranet featuring the roles and responsibilities of each MDC member, showcasing the corporate and functional committees, and communicating the State Audit plans. This website content will develop based on additional and appropriate requests for transparency;

· Strengthen the “Whistle Blowing” process, establishing investigation teams that will report directly to the MD and we will share (non-personal) matters and outcomes with the PDO Trade Union representatives and across the organisation where key learnings are identified.


By the end of May, we will:
· Complete the post-implementation review of the Improved Medical Benefit and launch agreed further improvements, including any applicable coverage for eligible family members.


Let me repeat that the MDC and I are dedicated to supporting excellence in our people and creating value for our stakeholders and Oman. We do this by engaging with you, our staff, as well as engaging with our communities, our contractors, the Ministries, and our shareholders. The result of these engagements is not time wasted nor words lost, it results into actions and plans that help us progress towards a sustainable future. We’re all in this journey together and in times of difficulty, we need to continue to set the role model across our industry and for Oman.

Rest assured that we will continue to seek your suggestions for improvement; for example, through MD lunches, MDC engagements and Trade Union representatives. We will also continue to assess our competitive position in the market to review and adjust base salaries and other terms where appropriate.

Later today, the MDC and I will engage with a very large number of contractor CEOs with the aim to resolve the debilitating industrial action which has resulted in production deferment and to progress in an aligned fashion in order to realise our goal of an additional 1,000 Omani jobs per annum. We will also aim to address salary and working condition improvements for over 20,000 contracting staff working in our operating fields and we have invited all upstream operators to join us.

In closing, let me restate that I need your help and commitment to support Oman, no more than at this time, and to fulfil our privileged position to produce Oil & Gas in support of the Nation’s prosperity and ambitions.

Early in the year we commenced on our journey to make PDO the one and only place to be. Together with our contractors, MoG, MoM, and the PDO Trade Union, we will address how best to realize this to support Omanisation, the excellence in our people and value creation for Oman.

The MDC and I remain steadfast that we must all work together – as one PDO – to continuously improve our business performance and to deliver on the promises to stakeholders and Oman.

Regards,
Raoul Restucci
Managing Director

They just don't get it.

Quick post.

Still no signs of a frank call for national unity from HM.

'Gimme more' protests continue apace, while the non-hydrocarbon exporting parts of the economy crumble... "A nice (albeit pricy) holiday in 'sleepyExotic Oman' this winter dear?"

"I think not - aren't they rioting?" will be the typical answer.

This news release from Oman's official news agency seems - at least to me - to highlight the generation gap affecting the political dialog not just in Oman, but the region at large.

State Council's Social Committee Meets

Muscat, March 22 (ONA) --- The State Council's Social Committee today held its 6th meeting of the 4th annual sitting for the 4th term under the chair of honorable Dr. Su'aad bint Mohammed bin Ali Sulaiman, Head of the Social Committee in the presence of honorable members of the committee and the Assistant Secretary General for Sessions and Committees Affairs.

The meeting approved minutes of the previous meeting and viewed the report of following up procedures of implementing its decisions. The committee also continued discussing its study's topic "Contemporary Youth Issues in the Sultanate of Oman," which aims at addressing the status of contemporary youth issues and their needs, as well as, reviewing the role of the governmental and local institutions and departments in solving these issues, highlighting their most important challenges and proposing the appropriate recommendations to face them.


The committee reviewed other items listed on its agenda upon which it took the appropriate decisions.

--- Ends/AH/KH

Oh yes, lots of talk of agendas, and committees, and taking "the appropriate actions", with no description of any of the issues, points for and against, decisions taken or actions agreed.

What a load of bullshit.

Photo: 'Generation Gap' ripped from MadinahVision.com's photostream


A committee of old men discussing right now "Contemporary Youth Issues in the Sultanate of Oman"?

How about:
- Unemployment
- Inability to get married (and thus have sex, regular sex, with a member of the opposite sex, before the age of 35)
- The perceived inequity of seeing the young relatives of Oman's rich and powerful oligarchs cruising in their Porsches and Lexi (?) with an apparently well funded stipend from on high
- Wasta, especially in Government or Government owned and/or supported companies
- No freedom to discuss these issues in the media, especially print media
- Voting and how the elected people can actually be responsible and accountable for legislation

And the default setting - of everyone - it that it's up to the Government to fix these problems, rather than as is often the case, how it's the Government policies that are causing them in the first place. And protecting the precious dears from reality is high on the list.

More soon.

Yet more protests. Oman's Oil by the numbers is just 150 rials a month. Grand Mufti calls for complete ban on booze and gyms

Feeling lonely? Hold a strike!
More strikes, more concessions...

And speaking of useless, Omantel subsidiary WorldCall also successfully got their $35 million loan thanks to a guarantee by parent Omantel. Worldcall losses more than tripled to Rs1.51 billion (US$18 million)with revenues falling to just $88mln in 2010, compared with a loss of Rs490 million in the preceding year. It's shares remain priced at less than 10% of what Omantel paid for them 3 years ago. The loan is partially to be used for 'debt consolidation'. I'd love to know who owned the debt that the Omani overnment's money is being used to repay...

It will be interesting to see how the assignment of some legislative power to the Majlis A'Shura will actually work. Note that 7 of the newly appointed Ministers were current or ex- A'Shura members. This is probably the best thing to come out of the protests, if it's done properly, although they haven't had time to update their website yet. It implies massive constitutional change. But what use is an elected legislative body if there can be no public debate of Government policy, and no political parties? And will the elected Majlis be able to over-rule the HM appointed Majlis A'Dawla? It's worth noting that under current law the President of the Majlis is... appointed by HM.


Just say 'No' kids...
On a lighter note. In a further blow to Omani employment opportunities in what was the growing tourist sector, Oman's Grand Mufti Sheikh Ahmed bin Hamad al-Khalili, appearing on Oman's riveting state television channel last Tuesday, called for a total ban on Alcohol.

The announcement was met with delight by the many (Omani!) purveyors of illicit alcohol, who pointed out that they would welcome the opportunity to sell more of their premium 'Clan of the Glen' [note: made-in-India] whiskey flavoured beverage at even higher extortionate prices than they already do. "We're just a phone call away, and we deliver!" mentioned one of the sellers, speaking on condition of anonimity.

Bulk sales of alcohol, currently allowed on Oman's military bases, and over the counter sales in the many dedicated Royal Oman Police bars (yes folks, and even during Ramadan) would not be affected, a spokesman for African and Eastern confirmed. Senior members of the ROP, who would have to enforce any ban, almost spilled their pints on hearing of the call from HE Sh. Al-Khalili.

Photo: His Eminence Shaikh Ahmed bin Hamad al Khalili, Grand Mufti of the Sultanate. No fan of the demon drink or happy endings.


The Grand Mufti also denounced Oman's burgeoning brothel & steroids business gyms as 'dens of vice', which is a fair call. I guess the on-demand massage business in Oman will have to go on-line to facebook and twitter, as the sex trade has done in Dubai. It's progress I guess, and e-commerce is, afterall, seen by the Government as a growth area.

Speaking of growth...


Oman's Oil & Gas by the numbers
PDO staff continued to protest for ridiculous amounts of money and benefits above what are already top notch salaries compared to most Omanis. The prospect of a strike among oil workers in the field is really making foreign investors nervous, but I doubt there will be any significant impact at all on Oman's short term oil exports even if they do.

All these demands, including the new unemployment benefit and lashings of fresh faced ROP officers, will need to be paid for of course. And right now, most Omanis (and expats) seem to assume that Oman makes loads of money from its oil and gas exports, as if we were like Abu Dhabi.

So, how much is Oman's oil and gas worth?

The easy way is to look at the Government's own 2011 budget. You can see an official summary here and a good commercial one by OAB here. The budget assumes an oil price of $58/bbl, and states 'net oil revenue' as $12.8bln. Costs (operational and investment) in the oil sector are counted seperately under expenditure, at around $2.4bln. There are many summaries of the oil production for 2011, and the official estimate is 897,000 bbl/d. Gas adds just $640mln net to the Government coffers, which seems very low.

So according to the Government there's around $11bln in net oil & gas revenue in 2011 assuming $58/bbl.

What I can't make add up are those 3 official numbers: the estimate of 897kb/d, the price assumption of $58 and the net revenue of $12.8bln. This is because 897,000bbl/d * 365 days * $58/bbl = $19bln, vs a net revenue of $12.8 bln (not counting costs remember - they are accounted separately). The Government seems to be 'missing' a whopping $6.2bln! This delta can be mostly explained, give or take a billion, if we try to work it out independently (see below).

Anyway, Oman's population is around 2.45 million (excluding Expats). I think it's quite interesting that dividing $11 billion in net oil and gas income by 2.45 million gives ~US$4500 per annum, which is just about exactly OR 150/month, the unemployment benefit HM just announced. Coincidence?


Photo: It's just a fact - Oman is not oil rich.

Bottom line folks: Oman is NOT oil rich. Your country's imports last year cost $19 billion, more than actual net oil revenue even at $80/bbl. True, your debt level is low at just 4% of GDP (after HM spent the past 12 years paying it down), and you have net positive foreign assets of about $5 billion.

While the headline figures put oil and gas at 80% of Government revenue and around 15% of GDP, almost all of the rest of the foreign-exchange earning exporting economy is re-labled oil and gas: methanol exports (based on free gas); aluminum smelting (based on free gas as Oman produces no bauxite); steel (yep, yet more free gas and no decent domestic iron ore either). And all the industrial activity around servicing the oil and gas sector plus the Government multiplies to make GDP look much better than it really is.

Remember this OR150 per person per month has to pay for everything: the military & ROP*, the free schools & hospitals, all the Government salaries, the infrastructure investments, and the subsidised power (cost: $0.5bln) and petrol (cost: $1.5bln).

Al Jazeera ..."We want to see the benefit of our oil wealth distributed evenly to the population," one protester yelled over a loudhailer near the port.

"We want to see a scale-down of expatriates in Oman so more jobs can be created for Omanis."

I'm afraid these people asking for free stuff, big salaries, leave, etc are misguided: the Omani people are already getting the oil money and then some. It's OR150/mnth. If the country is to survive the current 2%+ population growth rate, the non-oil real economy has to grow exponentially, and this means Omanis working hard in real jobs that create value in the international market place as well as replacing the imported service and construction sector labour markets.

A few dates and fish won't buy very many Lexus.

The Expats are, 95% (?99%?) of them I'd guess, all doing jobs that Omanis:
1/ won't do (house maids, construction, massage)
2/ won't do for anything close to OR100 rial a month (tourism, retail, Ruwi light industrial)
3/ mainly can't do (skilled labour), or might do but generally at a far worse performance level for more money

Wholesale short-term replacement of such people by Omanis will devastate those few parts of the economy that are not oil and gas dominated.



*In 2007 Oman was
ranked #1 in the world for Military expenditure as a % of GDP. (#2 was Qatar, #3 Saudi, BTW)


Bottom's up Oil revenue estimates
According to Raoul Restucci, Petroleum Development Oman's Managing Director, in his 2011 media brief in February, PDO produced around 650,000 bbls per day in 2010. Adding production from Occidental and a few small payers, Oman in total produces around 870,000 bbls/d, and the Minister of Oil and Gas, Dr. Rumhi recently forecast continued production growth in 2011 to 900k.

But this is gross production, and is not all exported. Oman consumes around 80,000 bbls per day, according to industry analysts Business Monitor International and the CIA factbook. And let's assume 5,000bbl/d is consumed by producers as fuel oil.

So this brings crude exports down to 815k/d.

Plus, it's safe to assume Oman's foreign partners take a piece of the exports too, at least 10% (although they have a 40% shareholding in PDO, and 80% of Oxy's Mukhaisna development, the Government applies heavy additional taxes on this production, probably at a rate of over 80%). So I'll assume a net foreign take for 2011 of 90k/d.

This brings Oman's share to around 725k/d. Of this, around 130,000 bbl/d is refined in Sohar and exported as refined product, but international 'crack spreads' (the difference between crude cost and product prices) are pretty low and the refinery is not working as well as the best, so a $5/bbl spread seems reasonable. This then only 'adds' around 2.5% to the 150k/d, bringing net Omani exports up to 729k/d.

But the oil is not produced for free remember. According to the 2011 Government Budget, RO943mln is budgeted for oil production costs. Assuming a 60% government share, this means 2011 expenditure of $4.1bln. While the foreign interests will pay the remaining 40% in 2011, remember that eventually they will recover these costs, so we may as well assume for our purposes that the entire $4.1bln is the cost to Oman of the oil.

Assuming an average price of $80 this means Oman would get 729k/d * 365 days * $80 per bbl - $4.1bln (costs) = $17.2bln. But at the Government $58 oil price, this = $11.3 bln Still about $1bln more than the net Government figure less costs.

End Note for dedicated readers:

Photo: His Majesty Sultan Qaboos.


I'm told His Majesty gets a % of oil from the foreign take, rumoured to be around 15% of the 90kb/d, so a nice $400mln or so per annum at $80/bbl, from which he pays most of his own expenses. That's just OR5 rial per person per month, which I think most Omanis would say is a bargain.


Coming soon: Oman's Industrial-lead growth strategy

Things start to get out of hand in Oman and the region... Saudi sends troops to Bahrain while Omanis focus on throwing benefit tantrums

As predicted, more and more Omanis are now 'protesting' to get more money, easier work, more time off, longer maternity leave, bigger bonuses, personal debt cancellation, a different boss, promotions, exams that the neighbourhood cat could pass, etc etc etc. Protests seemed to multiply to include OIB, various Ministries, The Intercon and Al Bustan hotels, nurses, Universities... It's hard to see where this ends. Money (and knowledge worth having) has to be earned in the real world.

Do most Omanis actually want their doctors, nurses, pilots, air traffic controllers and engineers to be given a degree without being able to demonstrate that they know their discipline? Protesting will never make any of these subjects easy. It's like protesting to be given the ability to play the piano. In a child, such behaviour is described as Tantrums.

But in a place where 'unlimited' money is viewed as flowing effortlessly out of the ground all this can apparently be given away to the beneficiaries for no effort. In Ibri, violence was again to the fore as bored, idiotic male youths with no money, no jobs and even less regular sex "vandals" again resorted to arson, now augmented with kidnapping.

In my opinion it's about time for His Majesty to explain to the public directly why all this has to stop, and provide a high level philosophical framework for the way forward, instead of just issuing Royal decrees like a machine gun. A line in the sand that has vast popular agreement needs to be drawn, with the rule of law firmly on the other side of it. Spoiled teenagers must be made to realise that attempts to burn buildings, disrupt industry and hold people hostage will experience the big downside of such illegality - resistance, arrest and trial - from adults who are better trained and heavily armed.

Its time for a grown up discussion, and a clear articulation of the carrot and the stick.


GCC support Saudi Troops entering Bahrain
Of greater concern than more strikes and 'gimme more' behaviour in Oman, Saudi have just sent troops into Bahrain, albeit at the invitation of the ruling Bahraini Royal family.

Photo (from API): At least 1000 Saudi troops cross the causeway into Bahrain.

In an insightful article today, the FT notes that this is a very slippery slope and could make things a lot worse. Saudi have their own problems with a majority of Shia in the eastern province and see the Bahrain situation os the thin end of the wedge all driven by Iran.

It was ironic how the GCC conference of Foreign Ministers could decry interference in a nation's affairs by outsiders [read: Iran boosting Shia discontent] whilst calling for a no-fly zone to be enforced over the skies of Libya. Of course, bat-shit crazy Col. Ghadaffi was no friend of the GCC leaders even before he started shelling his own population with heavy artillery and air power. The Arab league are, as usual, unwilling to actually do any work, but prefer to just ask for someone to do their work for them. As the Europeans can't even make a decision, it again comes down to the USA. Having spent the past decade being criticised by all these same people for interfering in Iraq and Afganistan, President Obama is perhaps understandably hesitant to unilaterally invade yet another MENA country.

Ministers sacked wholesale. HM feeds the Entitlement culture and new (peaceful) protests confirm a sea change in Omani politics

More demands, yet more acquiescence
Protests in Oman have now calmed down to the level of 'sit-ins', with no further violence and a deliberate & explicit expression of support for His Majesty. The focus of demands has crystalised upon more jobs & higher salaries, more Government welfare, action against (high level) corruption, free(er) speech, and significant expansion of the powers of the elected Majlis Al Shura.

The calls for 'give me free stuff' are not going to do anything to reduce the already huge dependency culture. The price of a paternalistic government is that the population then expects big daddy government to solve all problems and be an endless source of cash. Many Omani youngsters seem to approach their long suffering patriarchs the same way, like a personal ATM machine, as if money doesn't have to be earned or loans paid back.

Still, the protesters have started to get their way in an almost breathtaking way - many Ministers were replaced a few days ago on 'the night of the long Khanjars', with even the entire Ministry of National Economy [MONE] dissolved. The fate of its official leader, Minister HE Macki, is yet to be seen.

Meanwhile the protesters continue to press their case for even more Ministers to go, or join the ranks of 'advisors' (usually they stay on a Minister level salary - they are hardly joining the ranks of the unemployed lining up for their newly announced dole of 150 rials a month). It's still to be seen if any high level corruption trials will be held.

The head of the central bank denied rumours of large money transfers out of the country.

Be careful what you wish for...
However, we are starting to see the downside of what happens when such behaviour is encouraged and previous laws making such protests illegal are ignored, with scenes more reminiscent of old school Western 'Trades Union' at Bahwan, Oman Air, Omantel, Towel and even Petroleum Development Oman.

Photo (Gulf News): Protesters at Petroleum Development Oman [PDO] climb on the 'give me even more money' bandwagon

I doubt many Omanis will have too much sympathy for PDO staff. The workers at PDO are probably amongst the most well paid in the nation, with generous pensions too, and the company's Omanisation level is probably well over 80%. The oil company is, after all, majority owned by the Government. It is also the one company in Oman that could most justify having a requirement for skilled foreign workers, as at the end of the day PDO is the source of the life blood that runs through the entire Oman economy - oil and gas production & export. Last year PDO produced about 650,000 bbl/d, plus around 400,000 boe of gas, around 80% of the entire country's production. (more on the implications of this later).

Omantel workers were also sticking their hands out for more money and free loans, despite a history of bureaucratic incompetence, exploitative prices and poor service. Omantel probably exemplifies the argument for why Governments should preferably not run businesses.

So what exactly is illegal these days?
Where will this end? Now that the populace have apparently lost any fear of retribution for striking, protesting, or unlicensed public assembly, where are the new boundaries? There are a load of laws being broken right now, (even if we ignore the clearly illegal burning of private and state property or physically threatening the ROP).

Clarification of what the new laws are would be a boon. Can oil workers or other critical services legally strike? Can the Government now be publicly criticised? Is a call to make the Majlis a legislative body, defacto requiring a new constitution and a radically different philosophy of governance, also now legal? I'm told a blogger who posted photos showing the death certificates of the young Omanis killed in Sohar had his site quickly blocked by Omantel. How will the recent reporting of dramatic events change the laws on media and the press?

Right now the chaotic impact of allowing (and rewarding) previous transgressions seems obvious. Want more money? Think your boss or CEO should be replaced? Heard a rumour that such-and-such a senior Government official is on the take? Hey! Then grab some firends, have a protest and go on strike! Get your unemployed friends to help!

As all these new (and often highly inexperienced) Ministers will not be the fastest when it comes to making decisions, I don't expect much clarification in a legal sense soon.

The spread of protests to oil workers has already spooked the international markets, with Oman's international credit rating put on notice and the Muscat stock exchange plunging 5% in a day. Tourists are cancelling holidays. Foreign investment plans will be put on hold. This could increase Oman's interest payments and make the economy even more dependent on oil. Across the board wage and benefits increases will feed inflation and make Omanis even less competitive in the labour market, hardly what's needed.


Next: How much money is Oman earning from oil and gas? Is there enough money to go around?

Middle East populist 'Contagion' reaches Oman - Violence is without popular support. Sultan Qaboos retains confidence.

Wow. What a week since February 26th. (Note: I've been on the road, little access to the 'net, so apologies for the delay getting back to you!)

The protests that started in Sohar (with some idiotic and pointless violence by some of those 'idle hands') have expanded rapidly, encouraged by the immediate response it got from HM, and it has certainly rattled not just Oman's ruling clique, but also our neighbours to the West ("if it can happen in Oman, no-one is safe"). As a result, Abu Dhabi, Kuwait and Saudi are even offering Bahrain and Oman aid money to throw at the population.

The foreign press is also variable. Foreign Policy noted that HM Sultan Qaboos, "Oman's renaissance man", shouldn't even be mentioned in the same sentence as the butcher of Tripoli Ghadaffi.The FT's Simeon Kerr posted a great article on his time as "an honoured guest of the Oman military". It sooo captures the spirit of Oman!

Photo: The now infamous Globe roundabout in Sohar. Pic ripped shamelessly from the blog of Dan & Jillian

Note: For up to date info on Oman's riots, as I'm only blogging remotely, please check out Muscat Mutterings. In Sohar: the excellent blog of expat couple Dan & Jillian; in Salalah: Ever reliable Dhofari Gucci. Tourists should not cancel their holidays, by the way. All accounts indicate the country is safe, although actually visiting the sites of the protests should be undertaken carefully.

I have little sympathy for those killed in Sohar while attempting to storm a police station - what did they think was going to happen? It's not something that should have cost Al Mamari his job, IMHO.


Meanwhile,
As you will have read all over the net, Tunisian(?)-style riots were happening in Oman over the past week. It seems there were enough bored youngsters combined with a significant number of those suffering with low salaries to get out and wave plackards. But unlike the other riots in the regions there are a few key differences:

1/ There is no popular support at all for anything against His Majesty.
These riots, especially those with any violence or that show disrespect to the Sultan, are not supported by most adults in Oman. In fact, there is a general disbelief that violent protesters are even 'true Omani'. They're apparently either Emiratis, or 'Baluchis'. Or ... well, anyone else. Afterall, burning a Lulu hypermarket is really, really dumb. They were one of the few sources of unskilled Omani employment they had!

2/ No coherent organisation.
The demands are legion, and often both self serving and facile. 'Forgive all private debts', 'reduce the prices of things' etc. There is also a smattering of Saudi-style religious extremism 'segregate the schools'. As a result, some of the more potent messages, such as turning the Majlis Al Shura into a true legislative body, are being diluted. But the generally accepted demands are: jobs, more action for getting rid of corruption, more power to the Majlis Al Shura.

3/ Mainly stupid unemployed youngsters with nothing better to do.
Other movements have been broad based: including the middle class, military, academics, exiled leaders, women, etc. The ones in Sohar seem to be just ignorant youth with a desire to emulate the other countries and a message mainly involving 'give me stuff for free, especially cash'. How else to explain the total stupidity of trying to attack a police station with stones and molitof cocktails? This is changing however, as protests spread and are increasingly seen to be successful in getting results from the Government - especially in Salalah and now to Petroleum Development Oman staff near Haima.

4/ No agenda of 'regime change'
Even the violent protests have supported His Majesty and the core principles of benign dictatorship. Yes, there are compliants about corruption, but it's all within a general acceptance of the current system. Muscat Mutterer reported a demand for a new constitution however.

As other bloggers on the scene have indicated, there is no danger to the general populace as long as you don't go hanging around the site of a protest (and probably not even then).

The Omani Government's response, however, has been lacklustre.
Come on guys. Since the protest movement spread to Egypt, and certainly Bahrain, could you not have done some thinking in advance about how you would respond if it happened here too?

The announcements so far are unfortunately characteristic of the general ineptitude of the Omani Government of late: poorly thought through, knee-jerk reactions & top down statements of intent with no description of the 'how' or even the underlying principles (perhaps with the one possible exception of the desire to seperate puplic prosecution from the Police). The royal decree to 'create 50,000 jobs' was a classic example: this could have come as a school project from the very high schools that are pumping out these idiotic rioters. Where are 50,000 jobs supposed to come from? Doing what exactly?

As in Saudi, the urge is to throw money at the problem and try putting on a bandaid to cover up the core problems. Announcing a universal unemployment benefit of 150 rials will just make things worse - if anything creating a larger disinsentive to avoid work, and subsiding idleness. And I'm sure the chance of a private business firing an Omani will now become (if this was possible) even more difficult, again, exactly the opposite of what's needed! The general uselessness of the unemployed youth to do anything that generates a profit, combined with their poor education, lack of work ethic, and an overwhelming sense of entitlement already serve to make imported labour (cheaper, smarter, work harder, and essentially bonded to their employer) the way to go.

So, as I watch the Reuters and FT reports, my expectations are low. [Note to foreign journos - please find another adjective to describe Oman than 'sleepy'] All signs are that the system will trundle on, a reshuffle here, a study there, a lot more public money thrown at the squeeky wheels.


What would I do?
OK. Here's some ideas. I'd love to hear what you think. What ideas do you have?

Allow a free media & crack down on mysterious income sources.
Encourage debate of public policy alternatives & allow the exposure of poor government outcomes. Have public trials for corruption cases and name them in the papers. Insist Senior Government figures and their immediate families publish the sources of income, and setting up income tax above say, 50,000 rials per year. Institute a wealth tax for assets (including international assets) above 200k (with an excemption for 1 domestic house up to 500k) at around 1% per annum. Punish tax evasion severely. Put term limits on Ministers so they can only be in power a maximum of 8 years. People should note that even saying the Government system is not perfect is currently illegal in Oman. A lot of these poorly defined and potentially highly draconian laws restricting the media and civil society need to be axed.

Change the political system.
Establish a new constitution that puts the Majlis on a path to take charge of legislation, along with accountability for results. Allow political parties. Ensure the religious extremists cannot overturn the rights of women. Allow real unions, especially for the underclass of manual imported labour.

Improve Educational meaningfulness.
Establish a University dedicated to the study of the business of Government. Ban degrees from useless 'paper mill Universities'. Seperate the delivery of education from its testing, to try and get students actually learning rather than 'passing' fake exams while being allowed to plagiarise and cheat.

Level the employment playing field.
Start to break up the oligarchs by taxing all imported labour at a flat minimum rate, say 30 rials per month, plus a % of their salary above that. At the same time, allow Omani's to be fired much more easily (even if they can only be replaced by another Omani). Over time, crank up the minimum rate and the %. The objective is to make it a lot more expensive to hire a non-Omani, and certainly more than the minimum wage for an Omani employee. Once this is done, make it easier to hire foreign workers to ensure businesses that need specialised labour from overseas can get them.

Stimulate the SME private sector.
Encourage SMEs that actually do something by allowing home run businesses below 50k per year with minimal regulation beyond basic HSE & public health related issues. Make it easy to register and run a business by cutting most of the red tape required by the Municipalities and Ministries. Get lots of low cost Small Claims courts established for matters below 5k. Start to break up the monopolies of the Zubairs, Bahwans, Kimjis, et al.

Bring in Compulsory pseudo-military service.
Start giving all these unemployed youth a job for 18 months between high school and University that brings discipline and on the job training in life skills. Get them building infrastructure projects, helping in orphanages, picking up trash, building housing for the poor, ... anything to get them off their fat asses. Do not allow unemployment benefit to be paid unless they have done this. And make sure any unemployment benefit is time limited - it should be temporary (no more than 6 months).

Widen the tax base.
Bring in a Value Added Tax (not just a sales tax). Compensate lower income earners by increasing the minimum wage. Increase the tax on imports (currently just 5%) to the maximum extent the World Trade Organisation allows and apply to anything that could be made/grown in Oman.

Reduce population growth
The place can't sustain 3rd world birth rates combined with the modern medical care that ensures they survive. Have a child allowance for 1 or 2 kids per male, that then is taken away at 3 or more. Make education free for the first 2, then charge after that (again, by reducing Government handouts).

Reduce tribalism.
Yes, subsidise weddings (as they do in the UAE), but double the subsidy if the couple are from different tribes. Conversely, if the couple are first cousins, there should be no subsidy. There is no reason we should be encouraging further in-breeding.

OK. That's it for now.

Postscript:
Her Majesty the Queen of the Netherlands is coming to visit (a 'personal' visit at that) after all. It seems the Queen was worried that cancelling would give people the mistaken impression that she was siding with the protesters...

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.

BUT:
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...

Egypt protestors enable continued rule by the Military, and Iranian irregular verbs

Wow.

They left it to the last minute, but last Friday morning, Egypt's military eventually acted to ensure they didn't get put where they did not want be - in the position of either (1) allowing mob rule in Cairo, or (2) turning their firepower onto their own civilians.

When President Mubarak opted on the Thursday night to announce he was actually still staying, it was to the surprise of everyone: protesters, CIA, President Obama, CNN, and especially, the Generals.

So, at the same time that many of the Egyptian Army's own Majors, Colonels and squaddies were joining the crowd to protest, the Generals finally opted for Option (3):

Coup d'État

"The coup is the most frequently attempted method of changing government, and the most successful." Edward N. Luttwak


Meanwhile, it's rubber bullets in Bahrain, and more protests in Yemen, Algeria and Iran. How Mahmoud Ahmadinejad can both praise the Egyptian protesters while killing and tear-gassing his own protesters is almost too ironic for words. (I guess it's one of those pesky Persian irregular verbs: they have freedom of speech, you have protesters, I have a seditious rioting mob...)


Here is a view on the recent events in Tahrir Square different to that portrayed in the media, from one of Muscat Confidential's favourite Foreign Affairs analysts: George Friedman of STRATFOR.

Enjoy!

Egypt: The Distance Between Enthusiasm and Reality
February 14, 2011 | 0048 GMT

By George Friedman

On Feb. 11, Egyptian President Hosni Mubarak resigned. A military council was named to govern in his place. On Feb. 11-12, the crowds that had gathered in Tahrir Square celebrated Mubarak’s fall and the triumph of democracy in Egypt. On Feb. 13, the military council abolished the constitution and dissolved parliament, promising a new constitution to be ratified by a referendum and stating that the military would rule for six months, or until the military decides it’s ready to hold parliamentary and presidential elections.

What we see is that while Mubarak is gone, the military regime in which he served has dramatically increased its power. This isn’t incompatible with democratic reform. Organizing elections, political parties and candidates is not something that can be done quickly. If the military is sincere in its intentions, it will have to do these things. The problem is that if the military is insincere it will do exactly the same things. Six months is a long time, passions can subside and promises can be forgotten.

At this point, we simply don’t know what will happen. We do know what has happened. Mubarak is out of office, the military regime remains intact and it is stronger than ever. This is not surprising, given what STRATFOR has said about recent events in Egypt, but the reality of what has happened in the last 72 hours and the interpretation that much of the world has placed on it are startlingly different. Power rests with the regime, not with the crowds. In our view, the crowds never had nearly as much power as many have claimed.

Certainly, there was a large crowd concentrated in a square in Cairo, and there were demonstrations in other cities. But the crowd was limited. It never got to be more than 300,000 people or so in Tahrir Square, and while that’s a lot of people, it is nothing like the crowds that turned out during the 1989 risings in Eastern Europe or the 1979 revolution in Iran. Those were massive social convulsions in which millions came out onto the streets. The crowd in Cairo never swelled to the point that it involved a substantial portion of the city.

In a genuine revolution, the police and military cannot contain the crowds. In Egypt, the military chose not to confront the demonstrators, not because the military itself was split, but because it agreed with the demonstrators’ core demand: getting rid of Mubarak. And since the military was the essence of the Egyptian regime, it is odd to consider this a revolution.

Mubarak and the Regime

The crowd in Cairo, as telegenic as it was, was the backdrop to the drama, not the main feature. The main drama began months ago when it became apparent that Mubarak intended to make his reform-minded 47-year-old son, Gamal, lacking in military service, president of Egypt. This represented a direct challenge to the regime. In a way, Mubarak was the one trying to overthrow the regime.

The Egyptian regime was founded in a coup led by Col. Gamal Abdul Nasser and modeled after that of Kemal Ataturk of Turkey, basing it on the military. It was intended to be a secular regime with democratic elements, but it would be guaranteed and ultimately controlled by the military. Nasser believed that the military was the most modern and progressive element of Egyptian society and that it had to be given the responsibility and power to modernize Egypt.

While Nasser took off his uniform, the military remained the bulwark of the regime. Each successive president of Egypt, Anwar Sadat and Hosni Mubarak, while formally elected in elections of varying dubiousness, was an officer in the Egyptian military who had removed his uniform when he entered political life.

Mubarak’s decision to name his son represented a direct challenge to the Egyptian regime. Gamal Mubarak was not a career military officer, nor was he linked to the military’s high command, which had been the real power in the regime. Mubarak’s desire to have his son succeed him appalled and enraged the Egyptian military, the defender of the regime. If he were to be appointed, then the military regime would be replaced by, in essence, a hereditary monarchy — what had ruled Egypt before the military. Large segments of the military had been maneuvering to block Mubarak’s ambitions and, with increasing intensity, wanted to see Mubarak step down in order to pave the way for an orderly succession using the elections scheduled for September, elections designed to affirm the regime by selecting a figure acceptable to the senior military men. Mubarak’s insistence on Gamal and his unwillingness to step down created a crisis for the regime. The military feared the regime could not survive Mubarak’s ambitions.

This is the key point to understand. There is a critical distinction between the regime and Hosni Mubarak. The regime consisted — and consists — of complex institutions centered on the military but also including the civilian bureaucracy controlled by the military. Hosni Mubarak was the leader of the regime, successor to Nasser and Sadat, who over time came to distinguish his interests from those of the regime. He was increasingly seen as a threat to the regime, and the regime turned on him.

The demonstrators never called for the downfall of the regime. They demanded that Mubarak step aside. This was the same demand that was being made by many if not most officers in the military months before the crowds gathered in the streets. The military did not like the spectacle of the crowds, which is not the way the military likes to handle political matters. At the same time, paradoxically, the military welcomed the demonstrations, since they created a crisis that put the question of Mubarak’s future on the table. They gave the military an opportunity to save the regime and preserve its own interests.

The Egyptian military is opaque. It isn’t clear who was reluctant to act and who was eager. We would guess that the people who now make up the ruling military council were reluctant to act. They were of the same generation as Hosni Mubarak, owed their careers to him and were his friends. Younger officers, who had joined the military after 1973 and had trained with the Americans rather than the Soviets, were the likely agitators for blocking Mubarak’s selection of Gamal as his heir, but there were also senior officers publicly expressing reservations. Who was on what side is a guess. What is known is that many in the military opposed Gamal, would not push the issue to a coup, and then staged a coup designed to save the regime after the demonstrations in Cairo were under way.

That is the point. What happened was not a revolution. The demonstrators never brought down Mubarak, let alone the regime. What happened was a military coup that used the cover of protests to force Mubarak out of office in order to preserve the regime. When it became clear Feb. 10 that Mubarak would not voluntarily step down, the military staged what amounted to a coup to force his resignation. Once he was forced out of office, the military took over the existing regime by creating a military council and taking control of critical ministries. The regime was always centered on the military. What happened on Feb. 11 was that the military took direct control.

Again, as a guess, the older officers, friends of Mubarak, found themselves under pressure from other officers and the United States to act. They finally did, taking the major positions for themselves. The demonstrations were the backdrop for this drama and the justification for the military’s actions, but they were not a revolution in the streets. It was a military coup designed to preserve a military-dominated regime. And that was what the crowds were demanding as well.

Coup and Revolution

We now face the question of whether the coup will turn into a revolution. The demonstrators demanded — and the military has agreed to hold — genuinely democratic elections and to stop repression. It is not clear that the new leaders mean what they have said or were simply saying it to get the crowds to go home. But there are deeper problems in the democratization of Egypt. First, Mubarak’s repression had wrecked civil society. The formation of coherent political parties able to find and run candidates will take a while. Second, the military is deeply enmeshed in running the country. Backing them out of that position, with the best will in the world, will require time. The military bought time Feb. 13, but it is not clear that six months is enough time, and it is not clear that, in the end, the military will want to leave the position it has held for more than half a century.

Of course, there is the feeling, as there was in 2009 with the Tehran demonstrations, that something unheard of has taken place, as U.S. President Barack Obama has implied. It is said to have something to do with Twitter and Facebook. We should recall that, in our time, genuine revolutions that destroyed regimes took place in 1989 and 1979, the latter even before there were PCs. Indeed, such revolutions go back to the 18th century. None of them required smartphones, and all of them were more thorough and profound than what has happened in Egypt so far. This revolution will not be “Twitterized.” The largest number of protesters arrived in Tahrir Square after the Internet was completely shut down.

The new government has promised to honor all foreign commitments, which obviously include the most controversial one in Egypt, the treaty with Israel. During the celebrations the evening of Feb. 11 and morning of Feb. 12, the two chants were about democracy and Palestine. While the regime committed itself to maintaining the treaty with Israel, the crowds in the square seemed to have other thoughts, not yet clearly defined. But then, it is not clear that the demonstrators in the square represent the wishes of 80 million Egyptians. For all the chatter about the Egyptian people demanding democracy, the fact is that hardly anyone participated in the demonstrations, relative to the number of Egyptians there are, and no one really knows how the Egyptian people would vote on this issue.

The Egyptian government is hardly in a position to confront Israel, even if it wanted to. The Egyptian army has mostly American equipment and cannot function if the Americans don’t provide spare parts or contractors to maintain that equipment. There is no Soviet Union vying to replace the United States today. Re-equipping and training a military the size of Egypt’s is measured in decades, not weeks. Egypt is not going to war any time soon. But then the new rulers have declared that all prior treaties — such as with Israel — will remain in effect.

What Was Achieved?

Therefore, we face this reality. The Egyptian regime is still there, still controlled by old generals. They are committed to the same foreign policy as the man they forced out of office. They have promised democracy, but it is not clear that they mean it. If they mean it, it is not clear how they would do it, certainly not in a timeframe of a few months. Indeed, this means that the crowds may re-emerge demanding more rapid democratization, depending on who organized the crowds in the first place and what their intentions are now.

It is not that nothing happened in Egypt, and it is not that it isn’t important. It is simply that what happened was not what the media portrayed but a much more complex process, most of it not viewable on TV. Certainly, there was nothing unprecedented in what was achieved or how it was achieved. It is not even clear what was achieved. Nor is it clear that anything that has happened changes Egyptian foreign or domestic policy. It is not even clear that those policies could be changed in practical terms regardless of intent.

The week began with an old soldier running Egypt. It ended with different old soldiers running Egypt with even more formal power than Mubarak had. This has caused worldwide shock and awe. We were killjoys in 2009, when we said the Iranians revolution wasn’t going anywhere. We do not want to be killjoys now, since everyone is so excited and happy. But we should point out that, in spite of the crowds, nothing much has really happened yet in Egypt. It doesn’t mean that it won’t, but it hasn’t yet.

An 82-year-old man has been thrown out of office, and his son will not be president. The constitution and parliament are gone and a military junta is in charge. The rest is speculation.

Egypt: The Distance Between Enthusiasm and Reality is republished with permission of STRATFOR.

US State Dept Report on exploitative treatment of Foreign expat contract workers in USA's Middle East Embassies - Muscat comes out relatively well.

An interesting recent report by the The Middle East Regional Office (MERO) of the US State Deptartment's Office of Inspector General (OIG) was released last week, titled:

Performance Evaluation of Department of State Contracts to Assess the Risk of Trafficking in Persons Violations in Four States in the Cooperation Council for the Arab States of the Gulf.
Report Number MERO-I-11-06, January 2011

The Muscat US Embassy's gardening and cleaning contractors come out of the report relatively well. In fact, Muscat has the best paid cleaners and gardeners in the GCC, getting 140 rials a month (around US$363.63), the minimum wage for Omani's. There is no official minimum wage for Indian workers in Oman, but its unofficially it's a pitiful 60 rials per month for a 6 day week(US140). Here's the table from the report.



The UAE, Kuwait and Saudi all look terrible, paying less than US$6 per day.

Of course, that's what many Omani and Expat families pay their maids in Oman.

And pity the Sri Lankan gardeners in Saudi - almost half that.

The Embassy in Muscat also had a 'best practice' in the report when the Omani contractor - as per usual - was illegally keeping their passports, they got them access by installing a safe...

...Gardeners in Muscat, Oman were able to access their passports after the GSO requested that the contractor provide a small, secure safe in offices adjacent to workers’ housing. Janitors at Embassy Muscat also reported they signed a release allowing the contractor to hold their passports with the written understanding that they could retrieve them at any time. ...

Worryingly, most workers had paid large sums to agents to bring them to the Middle East. Most workers end up working for more than a year to repay these amounts, usually borrowed at high interest rates. Also, Muscat's workers had about the smallest living space: just 37.5 sq ft each (a space of just 1m x 3.5m). However, it was clean and had a cafeteria at least.

...
In Muscat, the gardeners bunk in a large work camp adjacent to the contractor’s administrative offices. Although personal space is very limited around workers’ bunks, OIG observed ample and regularly maintained common areas for recreation and dining. For example, the sanitary central kitchen shown in Figure 8 (see previous page) is staffed by the contractor and serves meals to 350 workers. The kitchen has a 48-seat adjoining cafeteria and includes several safety and hygiene features.
...
The gardening contract for Embassy Muscat includes a letter of assurance from the contractor stating it will provide to each worker basic and overtime minimum wages (set by the workers’ countries of origin), food, accommodation, medical care, and paid leave every 2 years. Line-by-line cost comparison worksheets detail how each worker’s salary and benefits will be adjusted under a renewed contract. Contract deliverables include attestations from foreign embassies that all labor agreements are legitimate, labor rights policy certification from the Omani Government, and a requirement that employees individually present their passports upon starting the job as evidence that they have not been coerced.

You can even read the declassified 2010 'report card' on the performance of the Muscat US Embassy by the OIG here. The Ambassador got an A, by the way, doing "an excellent job in advancing U.S. interests in Oman and strengthening this important bilateral relationship."


In other news, another oil tanker was hijacked "off the coast of Oman" (although please note by this they mean 350 MILES off the coast!). Calling this off the Omani coast is pretty unfair. It makes Oman look like a hotbed of piracy. The coast of India is probably closer.

Perhaps the Iranian/Omani joint navel exercises in the Gulf of Oman could be more usefully deployed a bit further East?

Just a suggestion chaps.

Iran and Oman hold joint military drills
Tehran Times Political Desk

TEHRAN – Iran and Oman started joint war games in the Sea of Oman on Wednesday.

Four fleets of warships, three jet fighters and a costal helicopter from Oman and four fleets of warships from Iran were used during the war game. Members of the two countries’ joint military committees were present at the event.

The goal of the war game is to increase the level of regional cooperation between the two countries and share experience.

The two countries are scheduled to hold such military exercises in Iran and Oman’s waters every year.

The third joint war game will be held in Iran’s waters during the next Iranian calendar’s year (starting on March 21)

All eyes on Egypt... As Mubarak tries an Iranian solution.

Supporters of President Hosni Mubarak, including some riding horses and camels and wielding whips, march towards anti-Mubarak protesters (Nabil/AP)

As plain clothes security forces and hired thugs 'pro-Mubarak' supporters start throwing petrol bombs from roof tops onto protesters trapped below them in Cairo's Tahrir square, charging the demonstrators on camels and horses wirelding clubs, and beating up reporters, Egypt is clearly going to get worse as Mubarak sticks with the iron fist approach, while being carefully watched by the Egyptian Military.

At least reports say the internet and mobile networks in Egypt were turned back on today. Maybe this was only to enable communication with the anti-demonstrators.

As CNN just reported:

...There were immediate suspicions that the pro-Mubarak demonstrators were not simply average citizens standing up for the man who has led Egypt for three decades -- suspicions that proved at least partly founded.

As battles raged between the two sides, some pro-Mubarak protesters were captured by his opponents. Some were terrified to be caught and begged for their lives, screaming that the government had paid them to come out and protest.

Others turned out to be carrying what seemed to be police identification, though they were dressed in plain clothes. An Interior Ministry spokesman denied on state-run television that police identification cards had been confiscated from demonstrators. He said if they had been, they were were stolen or fake.

State television reporting Wednesday did not always match CNN's own observations of what was happening in Tahrir Square. Several CNN journalists heard from pro-Mubarak demonstrators that they worked for the government. Staff from the national petrochemical company said they had been ordered to come and protest.

"These (pro-Mubarak) protests were organized by the government and the ruling National Democratic Party," analyst Kamal Zakher told CNN. The government mustered government workers and lawmakers whose seats are threatened, he said.

"They were ordered to go out today. They are well organized and that is suspicious -- especially the use of camels and horses. These are abnormal techniques to demonstrate," he said, referring to the shocking charge of about 50 or 60 mounted men through Tahrir in the middle of the afternoon.
...

It seems Egypt's regime is trying to use the recent (and successful) Iranian response to the protests rather than the Tunisian one: brute force, violence, murder, arrests & fear. And it seems the Military are (at the moment) letting them do so, or at least watching as the regime digs itself a bigger hole. If things keep going this way, I'd put my money on a coup d'état by 'The Colonels' or even the Generals to bring order and protect their own interests...

Meanwhile, here's a reprint of STRATFORs excellent analysis from a couple of days ago, along with a short history lesson of Egypt's recent past, and the implications for the rest of us.

The Egypt Crisis in a Global Context: A Special Report | STRATFOR
January 30, 2011

It is not at all clear what will happen in the Egyptian revolution. It is not a surprise that this is happening. Hosni Mubarak has been president for more than a quarter of a century, ever since the assassination of Anwar Sadat. He is old and has been ill. No one expected him to live much longer, and his apparent plan, which was that he would be replaced by his son Gamal, was not going to happen even though it was a possibility a year ago. There was no one, save his closest business associates, who wanted to see Mubarak’s succession plans happen. As his father weakened, Gamal’s succession became even less likely. Mubarak’s failure to design a credible succession plan guaranteed instability on his death. Since everyone knew that there would be instability on his death, there were obviously those who saw little advantage to acting before he died. Who these people were and what they wanted is the issue.

Let’s begin by considering the regime. In 1952, Col. Gamal Abdel Nasser staged a military coup that displaced the Egyptian monarchy, civilian officers in the military, and British influence in Egypt. Nasser created a government based on military power as the major stabilizing and progressive force in Egypt. His revolution was secular and socialist. In short, it was a statist regime dominated by the military. On Nasser’s death, Anwar Sadat replaced him. On Sadat’s assassination, Hosni Mubarak replaced him. Both of these men came from the military as Nasser did. However their foreign policy might have differed from Nasser’s, the regime remained intact.


Mubarak’s Opponents
The demands for Mubarak’s resignation come from many quarters, including from members of the regime — particularly the military — who regard Mubarak’s unwillingness to permit them to dictate the succession as endangering the regime. For some of them, the demonstrations represent both a threat and opportunity. Obviously, the demonstrations might get out of hand and destroy the regime. On the other hand, the demonstrations might be enough to force Mubarak to resign, allow a replacement — for example, Omar Suleiman, the head of intelligence who Mubarak recently appointed vice president — and thereby save the regime. This is not to say that they fomented the demonstrations, but some must have seen the demonstrations as an opportunity.

This is particularly the case in the sense that the demonstrators are deeply divided among themselves and thus far do not appear to have been able to generate the type of mass movement that toppled the Shah of Iran’s regime in 1979. More important, the demonstrators are clearly united in opposing Mubarak as an individual, and to a large extent united in opposing the regime. Beyond that, there is a deep divide in the opposition.

Western media has read the uprising as a demand for Western-style liberal democracy. Many certainly are demanding that. What is not clear is that this is moving Egypt’s peasants, workers and merchant class to rise en masse. Their interests have far more to do with the state of the Egyptian economy than with the principles of liberal democracy. As in Iran in 2009, the democratic revolution, if focused on democrats, cannot triumph unless it generates broader support.

The other element in this uprising is the Muslim Brotherhood. The consensus of most observers is that the Muslim Brotherhood at this point is no longer a radical movement and is too weak to influence the revolution. This may be possible, but it is not obvious. The Muslim Brotherhood has many strands, many of which have been quiet under Mubarak’s repression. It is not clear who will emerge if Mubarak falls. It is certainly not clear that they are weaker than the democratic demonstrators. It is a mistake to confuse the Muslim Brotherhood’s caution with weakness. Another way to look at them is that they have bided their time and toned down their real views, waiting for the kind of moment provided by Mubarak’s succession. I would suspect that the Muslim Brotherhood has more potential influence among the Egyptian masses than the Western-oriented demonstrators or Mohamed ElBaradei, the former head of the International Atomic Energy Agency, who is emerging as their leader.

There is, of course, the usual discussion of what U.S. President Barack Obama’s view is, or what the Europeans think, or what the Iranians are up to. All of them undoubtedly have thoughts and even plans. In my view, trying to shape the political dynamics of a country like Egypt from Iran or the United States is futile, and believing that what is happening in Egypt is the result of their conspiracies is nonsense. A lot of people care what is happening there, and a lot of people are saying all sorts of things and even spending money on spies and Twitter. Egypt’s regime can be influenced in this way, but a revolution really doesn’t depend on what the European Union or Tehran says.

There are four outcomes possible. First, the regime might survive. Mubarak might stabilize the situation, or more likely, another senior military official would replace him after a decent interval. Another possibility under the scenario of the regime’s survival is that there may be a coup of the colonels, as we discussed yesterday. A second possibility is that the demonstrators might force elections in which ElBaradei or someone like him could be elected and Egypt might overthrow the statist model built by Nasser and proceed on the path of democracy. The third possibility is that the demonstrators force elections, which the Muslim Brotherhood could win and move forward with an Islamist-oriented agenda. The fourth possibility is that Egypt will sink into political chaos. The most likely path to this would be elections that result in political gridlock in which a viable candidate cannot be elected. If I were forced to choose, I would bet on the regime stabilizing itself and Mubarak leaving because of the relative weakness and division of the demonstrators. But that’s a guess and not a forecast.


Geopolitical Significance
Whatever happens matters a great deal to Egyptians. But only some of these outcomes are significant to the world. Among radical Islamists, the prospect of a radicalized Egypt represents a new lease on life. For Iran, such an outcome would be less pleasing. Iran is now the emerging center of radical Islamism; it would not welcome competition from Egypt, though it may be content with an Islamist Egypt that acts as an Iranian ally (something that would not be easy to ensure).

For the United States, an Islamist Egypt would be a strategic catastrophe. Egypt is the center of gravity in the Arab world. This would not only change the dynamic of the Arab world, it would reverse U.S. strategy since the end of the 1973 Arab-Israeli war. Sadat’s decision to reverse his alliance with the Soviets and form an alliance with the United States undermined the Soviet position in the Mediterranean and in the Arab world and strengthened the United States immeasurably. The support of Egyptian intelligence after 9/11 was critical in blocking and undermining al Qaeda. Were Egypt to stop that cooperation or become hostile, the U.S. strategy would be severely undermined.

The great loser would be Israel. Israel’s national security has rested on its treaty with Egypt, signed by Menachem Begin with much criticism by the Israeli right. The demilitarization of the Sinai Peninsula not only protected Israel’s southern front, it meant that the survival of Israel was no longer at stake. Israel fought three wars (1948, 1967 and 1973) where its very existence was at issue. The threat was always from Egypt, and without Egypt in the mix, no coalition of powers could threaten Israel (excluding the now-distant possibility of Iranian nuclear weapons). In all of the wars Israel fought after its treaty with Egypt (the 1982 and 2006 wars in Lebanon) Israeli interests, but not survival, were at stake.

If Egypt were to abrogate the Camp David Accords and over time reconstruct its military into an effective force, the existential threat to Israel that existed before the treaty was signed would re-emerge. This would not happen quickly, but Israel would have to deal with two realities. The first is that the Israeli military is not nearly large enough or strong enough to occupy and control Egypt. The second is that the development of Egypt’s military would impose substantial costs on Israel and limit its room for maneuver.

There is thus a scenario that would potentially strengthen the radical Islamists while putting the United States, Israel, and potentially even Iran at a disadvantage, all for different reasons. That scenario emerges only if two things happen. First, the Muslim Brotherhood must become a dominant political force in Egypt. Second, they must turn out to be more radical than most observers currently believe they are — or they must, with power, evolve into something more radical.

If the advocates for democracy win, and if they elect someone like ElBaradei, it is unlikely that this scenario would take place. The pro-Western democratic faction is primarily concerned with domestic issues, are themselves secular and would not want to return to the wartime state prior to Camp David, because that would simply strengthen the military. If they win power, the geopolitical arrangements would remain unchanged.

Similarly, the geopolitical arrangements would remain in place if the military regime retained power — save for one scenario. If it was decided that the regime’s unpopularity could be mitigated by assuming a more anti-Western and anti-Israeli policy — in other words, if the regime decided to play the Islamist card, the situation could evolve as a Muslim Brotherhood government would. Indeed, as hard as it is to imagine, there could be an alliance with the Muslim Brotherhood designed to stabilize the regime. Stranger things have happened.

When we look at the political dynamic of Egypt, and try to imagine its connection to the international system, we can see that there are several scenarios under which certain political outcomes would have profound effects on the way the world works. That should not be surprising. When Egypt was a pro-Soviet Nasserite state, the world was a very different place than it had been before Nasser. When Sadat changed his foreign policy the world changed with it. If the Sadat foreign policy changes, the world changes again. Egypt is one of those countries whose internal politics matter to more than its own citizens.

Most of the outcomes I envision leave Egypt pretty much where it is. But not all. The situation is, as they say, in doubt, and the outcome is not trivial.

Reproduced with permission from STRATFOR

UAE's Omani Spies arrested: official news of arrests released by ONA, denied by UAE

As noted in comments on the previous post, Oman's Official news agency ONA issued the following short press release yesterday about busting a ring of UAE spys (also reported here on Muscat Confidential in November last year when at the time it was gossiped that the spys' target was the new port of Duqm):

Official Security Source/ Spy Network Unveils
Muscat, Jan 30 (ONA) --- An official security source has announced that as a result of the sincere efforts exerted by the faithful sons of this country, the security apparatuses have discovered a spy network affiliated to the State Security Service in the United Arab Emirates (UAE) targeting the regime in Oman and the mechanism of the governmental and military work. The convicted will be presented before the trial according to the procedures followed in this regard.

May Allah the Almighty protect His Majesty the Sultan and our beloved country against all harms.
--- Ends/AH/KH

The UAE responded that it was all news to them, using the classic Shaggy 'it wasn't me' defence. The story was quickly repeated by the wire services and BBC Middle East etc.

In an totally unconfirmed rumour, I'm told the Omani arrested allegedly include:
the ex-head of the air force (left the post about two years ago)
the head of internal security [!!?? UD]
HM's personal driver

If the above list is true, that's HUGE news: the Oman's Head of ISS a UAE spy?? Surely not.

As an interesting aside, an anon commenter on the earlier post on this topic suggested that the tip off leading to the arrests came from the Iranians...