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Oman 2014 | DIPLOMACY | REVIEW: DIPLOMACY & POLITICS

As one of the key hydrocarbon producers in the Middle East, Oman is looking to diversify its economy and increase its regional and global presence when it comes to trade and political affairs.

On the edge of the Gulf Peninsula, Oman is in a prime trading position, being one of the geographically closest countries to Asia's economic powers and also a gateway for the Middle East, Europe, and Africa. Neighbors such as the UAE, Saudi Arabia, and Qatar have helped bring an air of stability to the southern part of the Gulf; however, there are growing concerns about the situation in Yemen, with fears of a possible overspill into neighboring countries making it one of the top priorities of the Sultanate. Domestically, however, HM Sultan Qaboos bin Said Al Said has put in place a number of initiatives to increase trade, diversify the economy, and promote Oman as a politically stable and safe place to do business in the region.

STABLE FOUNDATIONS

The Sultanate of Oman is ruled by HM Sultan Qaboos bin Said Al Said, who came to power in 1970. HM Sultan Qaboos has a number of titles including Head of State, Head of Government, Chief of State, Supreme Commander of the Armed Forces, Prime Minister, Minister of Defense, Minister of Foreign Affairs, and Minister of Finance. The Sultan is from a prestigious dynasty, which began its reign of Oman in 1749 with Abu Hilal Ahmad bin Said. After HM Sultan Qaboos came to power in 1970, one of the first tasks he was faced with was overseeing the end of the British protectorate in 1971. Currently, HM Sultan Qaboos has not publicly announced a direct heir to the throne. If the Sultan dies without naming a successor, then the family have three days to unanimously decide amongst themselves who will be the next ruler. If after three days the family is still in disagreement, then a letter from the deceased Sultan will be opened containing his recommended candidate.

RULING COUNCIL

To help the Sultan run the country, the Council of Oman, which is considered the parliament of the Sultanate, was established. The Council is there to assist the Sultan and meets upon his request to discuss matters that affect the country and issues the Sultan raises for debate. Matters are then solved through a majority vote. The Council is split into two separate entities, the Council of State of Oman and the Consultative Assembly of Oman, and totals 167 members. The Council of State (Majlis al-Dawla) is the upper house of the Council and has 83 members, all of whom are appointed by the Sultan. The council members then serve a four-year term. Most often, the council members are former government ministers, ambassadors, undersecretaries, and senior military offices. The Council of State was established quite recently in 1997 by Royal Decree, with the main aim to assist the Sultan develop Oman and deepen its cultural roots in the region, while also establishing the basic laws of the state.

The lower house of Parliament is the Consultative Assembly, or the Majlis al-Shura. There are a total of 84 members in the Assembly, 83 of which are elected and one appointed by the Sultan. The Assembly was established in 2011 by Royal Decree granting legislative and oversight powers. The Council of Ministers of the Consultative Assembly can propose a draft law, which is then passed to the Council of State to agree upon. If there is a disagreement between the Council of State and the Consultative Assembly then it is put to the vote, where the majority wins. Once an agreement has been established it is sent to the Sultan for approval.

BITS & BOBS

Oman is one of the largest countries by area in the Middle East, ranking fifth at around 309,500 square kilometers. The Sultanate is split into 11 governorates, or muhafazah, and then split into a further 61 districts, or wilayat. Each region has one or more centers, making a grand total of 12 for the 11 governorates.

FUTURE PLANS

In the late 1990s, the oil-rich countries of the Middle East were having a crisis of confidence in their natural resources. Oil had hit a low of $10 per barrel in 1998, and many governments in the region were worried about how dependent their economies had become on oil as a source of national income. In response, Oman began setting out goals and targets in an effort to diversify its economy away from its dependency on global oil prices and improve the education and employability of Omani citizens. In 1995, the Omani government launched Vision 2020 with five main targets: economic and financial stability, broadening private sector participation, and changing the role of the government in regard to the economy, diversifying the economic base and sources of national income, globalizing the Omani economy, and upgrading the skills of its domestic workforce. A key part of this diversification process has been developing Oman as a regional hub for trade as well as establishing economic free zones, such as Salalah, which is a major port for the region and also one of the most high-tech. Another step in the process of development is the improvement of Oman's infrastructure, which has been partially funded by gas exports. Currently, oil and gas represents 40% of GDP; however, part of the vision will see this dynamic change to reduce the contribution of oil to 9% of GDP and increase gas to 10%.

The Sultanate also has ambitions to move up the value chain in the oil and gas sector by producing more petrochemicals and other value-added products. Oman is currently looking for around $10 billion in FDI to build a petrochemical refinery in Duqm. Another part of the Vision 2020 is to increase the importance of tourism in the economy. The plan is to increase its contribution to 3% of GDP and attract 12 million visitors annually.

Oman is also in its 8th five-year plan, running from 2011 to 2015. These rolling plans aim to increase the Omanization level of the workforce, keep inflation at a low and manageable level, reduce unemployment, and improve the education system to create a more knowledge-based society and economy.