S&P Hopes GCC Aid Package Can Be Enlarged

Standard and Poor’s (S&P) announced yesterday that the $20 billion package pledged to the embattled countries of Bahrain and Oman by the GCC (Gulf Cooperation Council) may need to be augmented in order to achieve the desired result.

Creating Jobs Can Relieve the Tension

The aid package, which was promised earlier this month, will be distributed evenly between the two nations and will be used to create new infrastructure and develop housing projects, which will in turn create jobs and help bolster the economy, with the result ultimately being to calm the tensions these two countries are experiencing at the moment.

The concern of S&P is that the demonstrations and unrest will lead to a depression in the progress of the economies of those two countries.

“Protests and political instability are in our view likely to negatively affect economic performance and depress future growth prospects, particularly for Bahrain, in its role as an important financial center,” S&P said. “Oman will also likely be affected in this way. At this point, there remain questions as to whether or not GCC economic aid will be able to offset these political and reputational risks.”

Despite their doubts, S&P, which rates the credit risk of investments, still believes that the aid can improve those countries’ credit rating over the long haul.

Bahrain Risk Rating Reduced

Bahrain was already downgraded by three notches since the mass protests began there during February. Oman, which has had a less disruptive time, has not yet been downgraded, but S&P has Oman on watch. This is in line with the other major ratings agencies, Moody’s Investors Service and Fitch Ratings.

“We are of the view that the economic aid package, which we understand will be comprised of donations by GCC members, will not immediately affect Bahrain’s and Oman’s ratings or ratings outlooks,” S&P added.

“That said, we believe the package could contribute positively to the sovereigns’ creditworthiness over the medium to longer term.”

Protests for Better Wages Continue in Oman

Demonstrating for higher wages, private security guards blocked the main airport in the Gulf State of Oman on Wednesday.

Concessions Granted

Despite the fact that Oman’s ruler, Sultan Qaboos bin Said, has granted several concessions since the unrest began there several weeks ago, the unrest has continued apparently unabated. The Sultan, who has been in power for 40 years, as already decided to give some legislative powers to the Oman Council, to double monthly welfare payments, and to raise pension payments. This follows the pattern of other Gulf States who are offering cash to protesters in an effort to quell the unrest and maintain order.

In the latest action by demonstrators, about 400 to 500 security guards, who are privately employed by several different security companies, staged a protest on the road to the Muscat airport.

One protester, who wished to remain unnamed, said that, “Our objective of this protest is for our wages to be raised.”

The protesters left the scene when the police asked them to disperse. No violence was reported, although some travelers did not make their flights in time.

Other Protests in Oman

Workers from the state run oil firm Petroleum Development Oman (PDO) also demonstrated on Tuesday for better wages. Several hundred employees staged their protest at the company headquarters and in the oil and gas fields. This work stoppage was the first to disrupt a Gulf energy firm since the demonstrations swept through the region.

There have been protests at Oman International Bank, Oman Investment Finance Company and the Intercontinental Hotel, which is owned by the government.

There have also been demonstrations for improved political conditions, including sit-ins at the consultative Shura Council in Muscat, in front of the governor’s office in Salalah in the south and also in Sohar. Along with improved wages, and an increase in the number of jobs, protesters also demand an elected parliament and a new constitution.

Gulf States Regaining Stability, At Least for Now

Sultan Qaboos bin Said

This past Sunday was the first trading day throughout the Persian Gulf region since the announcement by Gulf State foreign ministers that they were pledging $20 billion in financial aid to assist fellow Gulf States Oman and Bahrain, who have been facing civil unrest and anti-government demonstrations for the past several weeks. This boost has proved to be welcome medicine for the region, prompting a strong showing on the Gulf’s major markets. Dubai’s main market was the leader in gains with an increase of 4.3% up to 1,513 points.

Saudi Arabia Quells Mass Protest with Mass Show of Force

Another factor contributing to the improved market performance was the averted major protests which had been feared were going to appear in Saudi Arabia. But the Saudi main financial index increased by 1.5% to trade at 6,693 points. The much feared anti-government protests in Saudi Arabia were thwarted by a huge show of power and force by the Saudi security forces, thus, at least for the time being, quelling the national fervor to protest.

Oman Grants More Handouts

Helping to improve the optimistic market mood was the announcement that Oman’s ruler, Sultan Qaboos bin Said would be doubling the welfare payments to his citizens while also increasing pension payments. This is just the newest in a series of rulers offering improved financial entitlements to citizens as a result of the regional unrest which has been taking the Arab world by storm in the last few months.

More Power to the People?

The sultan has also agreed to grant lawmaking powers to the Oman council. This is a huge concession on the part of the sultan who has led Oman as a dictator for the past 40 years, with only himself and his cabinet able to create legislation. The Oman Council, until now, was only able to advice the sultan. Consisting of two parts, the elected Shura Council and the State Council, which consists of members who the sultan has himself appointed, giving legislative power to the council is a decision which came on the heels of shocking protests in Oman which left one person dead.

The concessions were met with mixed reactions on the part of the protestors, who continue to hold a vigil outside the Shura Council, some were skeptical while others were hopeful.

“It does not mean much at the moment. We will celebrate when the Shura Council is granted real powers in the running of the government,” protester Hadi Suleiman said.

Faiz al-Ashour, another protester, said: “It looks good and it shows that the protests are beginning to bear results toward meaning political reforms.”

What If the Oil Stops Flowing from Oman Too?

China Imports Oil From Oman

As tensions in the Middle East continue to rise, concern about the political stability in Oman is mounting. Unrest in the sultanate has not yet reached the levels seen in countries such as Libya or even Bahrain, with only 2 deaths which can be attributed to clashes between demonstrators and security forces, but there are fears that the situation in Oman will worsen.

China and Asia Worried

The majority of oil exports from the Middle East go to China and Asia who are especially worried that Oman will join in the general grassroots uprising spreading like wildfire throughout northern Africa and the Middle East, breeding fear in the east that the supply of oil from Oman may be disrupted.

Oman is not a member of OPEC (Organization of Petroleum Exporting Countries) but it does have the largest supply of oil reserves of any country in the Middle East which is not a member. In 2010 Oman produced 863,000 barrels per day of total petroleum liquids, almost all of which was crude oil. Over the past three years oil production there has increase by more than 20%.

Can Saudi Arabia Fill In for Libya?

At the moment there is nothing but uncertainty about how much the flow of oil from Libya will be disrupted due to the war raging there. Saudi Arabia has said that it can increase output to cover the Libyan deficit of oil deliveries, but to what extent it can do this is a big question.

West Looking East with Concern

The main importers for the oil from the Middle East and North Africa are Asia and China, who are watching the developments in the region with growing concern. Most likely, if the situation worsens and oil supplies are severely disrupted, China and Asia will turn to Mexico for their oil, leaving countries such as the US, Great Britain and Europe to fend for themselves.

Queen Beatrix in Oman to Plead for Captured Crew

Queen Beatrix of the Netherlands

The Queen Beatrix of the Netherlands decided to proceed with her previously scheduled trip to Oman despite the fact that three Dutch military personnel are being held hostage in Libya. However, the status of the state visit was reduced to a private dinner on Tuesday night, not only because of the hostage situation, but also because of the unrest which is also taking place on Oman itself.

Queen Beatrix Persuading Oman to Pressure Libya

Diplomats have told journalists that the hope for this royal visit is that Queen Beatrix can persuade Oman to put pressure on Libya to release the Dutch helicopter crew which was captured by Libyan forces during their attempt to evacuate foreign citizens from the embattled nation. The Dutch Prime Minister Mark Rutte has been negotiating for their release since their capture on March 3rd. Two others whom the crew was trying to evacuate were also captured at that time, but they have since been released and are out of Libya.

The Prime Minister stated that, “It is terrible for the crew of the Lynx helicopter. Everything is being done to make sure the crew gets home.”

Dangerous Mission Near Gaddafi Stronghold of Sirtre

The crew was captured near the town of Sirtre, a main stronghold of Gaddafi in the center of the country as the revolt there continues to escalate. A military historian, Christ Klep, maintains that the rescue mission was a surprise because of the extreme danger of landing a helicopter near Sirte.

“It seems to suggest it may have been a diplomat, for instance, or somebody of special importance anyway,” he told Radio Netherlands Worldwide.

“I would have thought you would want to avoid stirring things up in Libya and not attract attention to yourself.

“There must have been a reason they were prepared to take this extra risk and it was a real risk because it’s essentially impossible to defend one of those Lynx helicopters.”

Crew Treated Well

Canceling the Queen’s visit to Oman was not considered, as one diplomat explained, ‘Canceling the visit would have been the most stupid thing we could have done.’

Hans Hillen, the Dutch defense minister told MPs that the crew is being treated properly and all are in good health. This information was transmitted to him by the Dutch ambassador to Libya who was allowed to visit the hostages who are being held in Tripoli. Mr. Hillen continued to say that the crew’s good treatment is a positive sign that there is every reason to hope for a satisfactory solution to the situation.

Oman Air Employees Join National Unrest Movement

This past Sunday employees of one of Oman’s major companies took to the streets outside the headquarters of Oman Air in Muscat, not far from the Gulf state’s international airport in Oman’s capital city. This latest protest comes on the heels of several days of demonstrations in Oman demanding political reforms. Oman, together with Bahrain, the small island state in the Persian Gulf, have been the locales for the largest and most enduring outbursts of unrest in the Gulf states which is part of the general unrest transpiring in the Arab world since January 25th’s explosion in Tunisia and then in Egypt.

No Disruption in Flights

According to several witnesses about 100 employees at Oman Air joined together in the late morning hours to call for better working conditions. The national air carrier’s chief officer for corporate affairs, Philippe Georgiou stated that no flights were disrupted by the demonstration and that the airline is ready and willing to discuss issues with the protesters. Mr. Georgiou told the Associated Press that the demonstrators represented several corporate departments and they have a wide range of demands, one of which being higher compensation.

Mr. Georgiou said of the timing of the protest that, “The general environment is of people expressing their views … in the region.”

Watchful Eye on Oman

The other Gulf nations, especially Saudi Arabia, are keeping a wary watch on the unrest in their fellow regional states, especially Oman. Oman, along with Iran, shares the responsibility of controlling the crucial waterway through which 40% of the world’s oil tanker traffic passes, the Strait of Hormuz.
Oman Air services 41 destinations, mostly in the Middle East and India, with a few routes to Europe and Southeast Asia as well.

Government Shakeup

Protesters have come out to demonstrate throughout Oman, staging sit-ins and similar events, to call on the government to reform the economy and hold investigations into who is responsible for attacks on protesters. In response to the unrest, on Saturday Sultan Qaboos bin Said, the ruler of Oman, fired three key government officials in what was the second installment of government shakeups in the same number of weeks.

GCC Planning Aid Package for Oman and Bahrain to Quell Discontent

The Kuwaiti newspaper Al-Qabas reports today that the six-nation Gulf Cooperation Council are holding discussions about sending financial aid to two of its members who have been hit by demonstrations and protests, Bahrain and Oman, as the Middle East continues to show signs of instability and violence.

The other four members of the GCC, Kuwait, Saudi Arabia, Qatar and the United Arab Emirates are considering sending an aid package to help improve the economic and social conditions of their less prosperous neighbors. Together the wealthiest of the six GCC states are said to have about $1.35 trillion in surplus assets, gathered just in the past several years of high oil prices. The aid would be designed to help pay for housing for the needy, create jobs and improve public services in Oman and Kuwait.

Protests in Bahrain have been focused largely on demands for political and economic reforms, while the demonstrators in Oman are more concerned with political corruption and lack of jobs.

Some analysts are comparing this proposed aid package plan of the GCC with the famous Marshall Plan of the United States, which helped rebuild and support Europe in the aftermath of the devastation of World War II. The plan was named after the creator of the plan, the United States Secretary of State at the time, George Marshall.

One Wounded in Oman as Government Attempts to Disperse Crowds

Tuesday marked the fourth day of protests in the northern port city of Sohar in Oman. According to witnesses, about 200 to 300 people were on the road demanding jobs and political reforms when the army began shooting in the air. “Many people ran,” said one protester who asked not to be mentioned by name. “The man who was shot came to calm down the army.”

The shots fired caused the crowd to begin to disperse, but they soon reformed at a traffic circle near the port, and the troops pulled back.

On Monday the demonstrators successfully blocked the entrance to Sohar port, disrupting the export of the country’s life blood, oil. On average Oman sends 160,000 barrels a day out of the country.

Protests also spread to the capital city of Muscat on Monday. The demonstrations are a rare event in what is usually considered a ‘sleepy sultanate.’ Sultan Qaboos bin Said has ruled the country for over 40 years, and is surprised by the fervor he is witnessing in what is otherwise a stable society.

The sultan is acting to calm the tensions in his country, which erupted on the general wave of protests which are sweeping through the Middle East. On Sunday the sultan offered to create 50,000 jobs and offered unemployment benefits to workers out of jobs of 239 pounds/month. He has also said that he will investigate ways to give more power to the quasi-parliamentary advisory council.

Sharakah Exhibit Extolls SMEs to Dignitaries

Omani dignitaries were on hand for a briefing from The Fund for Development of Youth Projects, also known as Sharakah. Included among the leaders who were learning about ways to financially support this exceptional fund which encourages the establishment and growth of small and medium sized enterprises were the minister of sports affairs Ali bin Masoud Sunaidy and the minister of commerce and industry, Maqbool bin Ali Sultan.

The briefing took place at the Oman International Exhibition Center where Sharakah has a pavilion as part of the Small and Medium Enterprises (SME) Exhibition. The assistant general manager of Sharakah, Dinkar Kishor commented that, “Unlike last two years, this year we are showcasing projects that have benefited from our financial support. This way we would like to reach out to budding entrepreneurs.”

Unprecedented Water and Power Summit Scheduled to Take Place in Oman in May

On the heels of extraordinary developments in the power and water sector in Oman, an unprecedented global conference and exhibition is being scheduled in Muscat this coming May. The conference is being organized by the US-based International Quality and Productivity Center (IQPC) together with Global Exhibitions and Conferences (GEC) LLC . The summit will take place on May 22-25 and will discuss a large assortment of subjects including the design and construction of power and desalination plants, as well as their construction and management. Also included will be how to install more effective power and water networks all over the sultanate of Oman. Other sponsors of the event include the Public Authority of Electricity and Water (PAEW), the Ministry of Regional Municipalities and Water Resources (MRMWR), the Electricity Holding Company (EHC) and the Oman Society of Contractors (OSC.)

The Chief Executive Officer of the most important event management consultant company in Oman, CJ Paul had this to say about the upcoming conference:

"As Oman's power and water requirements continue to rise every year, the government is currently implementing various measures to meet the demand of industries and the country's growing population. The Oman Power and Water Summit 2011 will effectively serve as a forum for discussing the latest developments in the industry, including the range of projects now under construction or set to be implemented soon."