US Academicians Seek to Strengthen Bond with Oman

Meeting of Fulbright Hays Delegates

Seven university and college presidents from the United States are currently in Oman as participants in the Fulbright-Hays Seminars Abroad program. The program emphasizes higher education in Arab nations and the US.

Fulbright-Hays gives grants to students from Oman who which to undertake research or other academic goals in the United States. The group of university presidents now in Oman wishes to encourage exchanges between student and faculty, promote research, and support connections between educational institutions in Oman and the US.

US Outreach to Arab World

The goals of the delegation were announced at a press conference which was organized by the US embassy in Oman. The press conference was held at the Intercontinental Hotel in Oman’s capital, Muscat. In addition the academicians announced to the media that the current visit is an element in the US government’s desire to reach out to the Arab world.

The program of visiting university presidents was funded by the US Department of Education, and administered by AMIDEAST. The goals of the program, also known as “Higher Education in Transition,” hopes to give the participants a chance to learn about best practices, as well as share experiences with their colleagues in Oman. They also hope to develop future programming in the region in conjunction with campuses in the US.

Prosperous Nation Needs Higher Education

The US Ambassador to Oman, Dr. Richard J. Schmierer described the goals of the Fulbright-Hays Seminar Abroad group at the press conference, saying,

“The embassy is pleased to support efforts to foster linkages between institutions of higher education in the US and Oman and promote the ongoing development of educational exchange and training opportunities for the US and Omani students, faculty and staff.”

Dr. Schmierer added that if a nation wishes to secure an affluent future for its citizens, higher education of the highest quality must be promoted. We are gratified to see our growing partnership with Oman in this field and we thank the members of the Fulbright-Hays delegation and AMIDEAST for their interest, time and efforts in helping to build this key relationship.”

Record High Profits Posted for Omanoil

Omanoil Execs

In the midst of Middle Eastern turmoil Oman appears to be relatively untouched, at least economically, by the winds of change blowing all around them. Take for example the success of Omanoil, which posted record high revenue for the fiscal year 2010 of RO 216.2 million (USD 561 million). This historic total sales was consistent with higher demand for petroleum products and the 6% projected economic growth for Oman in the coming year. This is a 28% increase as compared to sales of RO 168.4 million in 2009. Pre-tax profits increased as well by 28%, from RO 6.1 million to RO 7.8 million.

Net profits after corporate taxes have been accounted for will be RO 6.1 million, with earnings per share of 106 baisas.

“In 2010, the company undertook a series of grass-root improvements and upgrading initiatives to ensure efficient and reliable logistics support systems to meet the demand growth by focusing on effective asset management, operational improvements, as well as the development of a knowledgeable and skilled workforce,” stated Sheikh Salim bin Abdullah Al Rawas, chairman of Oman Oil Marketing Company.

“These initiatives are crucial in supporting the company’s various business portfolios to achieve their respective sales targets and remain competitive in product distribution to all locations nationwide,” he added.

“Customer Service which lies at the heart of our operations witnessed significant improvements across all business units through the creation of new internal and external systems and processes that promote superior customer care to dynamically exceed expectations.”

Omani Companies Fear PEIE Directives Will Hurt Business

A number of small to medium sized businesses in the Sohar Industrial Estate have expressed concern over the newly established regulations now proposed by the Public Establishment for Industrial Estates, or PEIE. These new regulations are the government’s response to the recent demonstrations in Oman for more economic security and improved working conditions for workers. The head of the PEIE explained to the Times of Oman that the Omani economy is strong and unhurt by the recent unrest, and in addition the Sultanate is anxious to protect the interests of business in Oman.

Business Leaders in Oman Worried

But the business leaders are nevertheless concerned that the PEIE directives will harm their profit margins and could even force them to move their businesses to other neighboring countries.

According to the Times of Oman there are now between 15 and 20 companies within the industrial estate which are likely to close down their businesses in Oman and move elsewhere. These companies have received an official communique from the PEIE explaining to them the same new requirements which companies with the Rusayl Industrial Estate have already been given.

Rusayl companies were told to begin to provide for a cost of living allowances ranging from RO50 to RO30, depending on the workers present salaries. The PEIE also directed the Rusayl companies to provide health insurance benefits of Omani employees and also begin to implement a five-day work week.

“I am running a small food processing unit. I am ready to pay the higher salaries. But if I have to pay for the cost of living allowance and medical health insurance benefits then I have to shell out at least extra RO3,500 per month.

This would be without considering the overtime payment. Moreover, I don’t have financial strength like bigger companies,” an entrepreneur said.

This same businessman also complained that he suffered a loss of 65,000 metric tonnes to his business as a result of the recent blockades at the Sohar roundabout.

“I will not be able to compensate it even if I work for extra hours the entire year,” he said.

PEIE Says There is No Reason for Worry

The CEO of PEIE, Hilal Al Ahsani said that he does not see any reason for concern in the industrial estate, and the government is highly motivated to promote and protect the business sector in Oman.

“A lot of new initiatives have been discussed and the government always follows a policy to promote industrial sector,” he stated.

But another entrepreneur said that the government is not showing the proper concern for their problems.

“We are running from pillar to post to resolve this issue. We don’t know whom we should approach to find a solution. If we have to follow these instructions then we should wind up our business. I heard that some companies in Rusayl Industrial Estate are also moving out to neighboring countries. Who will compensate for our losses,” he asked.

“The government should adopt plans to subsidize salaries of national workforce like other neighboring countries are doing,” he suggested.

Investors Hesitating to Invest in Oman

A financial consultant, Jose Chacko, warned that the economy of Oman could be adversely affected by the relocation of businesses out of the Sultanate.

“After witnessing the recent developments, investors are reluctant to pump in more money. The government should initiate steps to attract more foreign investment.

The establishments should be categorized based on their financial strength. Unexpected financial commitments will altogether disrupt their operations. So, a detailed study is a must to assess the latest situation,” he said.

Oman Begins Campaign to Save Electricity

Electricity in Rural Oman

For the second time in two years Oman’s Rural Electricity Company will be kicking off a campaign designed to end wasteful use of electricity in rural sections of the country. Last year’s efforts led to a 9.4% reduction in rural electricity use, according to the Oman Daily Observer.

Promoting Smart Electricity Use in Rural Communities

The campaign to save is being dubbed “Rationalize Electricity…and Save Money for Your Kids.” The goal is to promote a rational approach to using electricity, as well as promoting the safe use of it by people in rural areas of Oman.

Meeting the People

Official representatives of the Rural Electricity Company will meet with residents of these areas, including in Musandam, Dhofar and Al Wusta and discuss with them how electricity is produced, how much it costs to produce including the subsidies which the government provides to offset the high cost of supplying electricity to rural areas, and finally the benefits to electricity users in rural areas as well as the rest of the country of conservative, rational use.

Official Statement

An official from the Rural Electricity Company, Hamad bin Salim al Magdheri said about the campaign that, “The campaign will include the rationalization in the use of electricity and safety from the risks, by focusing on adaption and how to maintain equipment.

“We’re delighted with the success of the first campaign, especially as they came in order to spread awareness of the need for rationalization in the consumption of electricity.”

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.