Oxford Business Group - Oman 2012 Report


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Oxford Business Group - Oman 2012 Report

  1. 1. 11Country ProfileReforms to diversify economy promote investmentLegacy of seafaring history seen in today’s portsFocus on quality education for the young populationCultural diversity expanded with expatriate workforce
  2. 2. 12 COUNTRY PROFILE Oman’s rich history includes a number civilisations and rulers Progress through reform Diversifying the economy while conserving heritage and culture The year 2010 marked the 40th anniversary of the were formed, Zanzibar and the Sultanate of Muscat and accession of His Majesty Sultan Qaboos bin Said Al Said Oman. Throughout the late 19th century and early 20th and the establishment of the Sultanate of Oman. As a century, the Sultanate’s territories and influence began member of the Gulf Cooperation Council, the Sultanate to slip away as the country lost its trading competitive- continues to play a fundamental role in promoting ness against the more technologically advanced Euro- regional stability. It is also a country that strives to pean powers. The Omani interior started becoming adopt economic reforms that are in line with global mar- alienated from the more secular coastal Muscat. ket expectations, while retaining and protecting all With the discovery of oil in the 1960s, the British, aspects of its traditional heritage and culture. under pressure from European oil companies, helped Today, the Sultanate is considered one of the top eco- the Sultanate to consolidate power. In 1970 Sultan nomic reformers in the world, and it is poised to con- Qaboos came to power and renamed the country the tinue on this path. As outlined in Vision 2020, Oman’s Sultanate of Oman. Under the reign of Sultan Qaboos, 25-year development plan, the country seeks to achieve the internal disputes originating in the Dhofar region economic diversification and reduce its dependency on were quelled with the help of the British and peace has hydrocarbons. The country aims to stand out from its long since prevailed. The reign of Sultan Qaboos has neighbours and strives to become one of the top region- widely been acknowledged as being characterised by al and global destinations for foreign investment. social and economic progress. HISTORY: Since ancient times Oman has benefitted from GEOGRAPHY: Located in the south-east corner of the contacts with many of the world’s major civilisations, Arabian Peninsula, Oman occupies a total area of as it occupies a very advantageous position in the Gulf. 309,500 sq km – roughly the same size as Italy - includ- Between the 6th century BC and the arrival of Islam in ing coastal islands such as Masirah, Halanyat and Sala- the 7th century AD, Oman was controlled by three ma, and the exclaves of Musandam and Madha, which dynasties: the Achaemenids, Parthians and Sassanids. are completely surrounded by the UAE. The country has In the 7th century AD, during the lifetime of the Prophet 1374 km of land borders, which it shares with the Muhammad, Oman adopted Islam. Republic of Yemen to the south-west, the Kingdom of About a decade after explorer Vasco da Gama dis- Saudi Arabia to the north-west and the UAE to the covered the sea route to India in 1498, the Portuguese north. Oman has 2092 km of coastline on the Gulf, Ara- occupied Muscat. They fortified the city and held it bian Sea and the Gulf of Oman. The interior is covered until the Ottomans arrived in 1660. The Ottomans ruled by a vast expanse of desert. The imposing Hajjar moun- intermittently for just over 100 years until a tribal leader, tain range forms an arc extending from the north-west from whom the current line of Omani sultans is descend- of the country to the south-east. The highest peak in ed, took over in 1741. Oman’s emergence as a seafar- Oman is Jabal Shams, at about 2980 metres. Approxi- ing economic power began in the 1600s. As the Oma- mately 82% of the land mass is occupied by deserts and nis sailed down the coasts of Persia, India, Zanzibar valleys, with mountain ranges and coastal plains mak- and Kenya, they built a trading empire – one in which ing up the remaining 15% and 3%, respectively. the East African coast became increasingly central as CLIMATE: The country’s climatic conditions are as var- Oman’s empire developed into an economic force. ied as its geography. The coastal areas are hot and FORMATION: When Sultan Said bin Sultan Al Busaidi humid during the summer, while the interior general- died in 1856, his sons quarrelled over succession. The ly remains hot and dry. The southern Dhofar region British government intervened and two principalities features unique weather conditions between May and www.oxfordbusinessgroup.com/country/Oman
  3. 3. COUNTRY PROFILE 13September, called the khareef, when it catches theIndian Ocean’s monsoon season, and temperatures canbe 10-15 degrees lower than the rest of the country.Precipitation falls almost exclusively in the wintermonths. Other than in the Dhofar region, it is rare tosee any rain between May and November. The coastalareas and the interior plains average 20-100mm ofrainfall annually, but this can increase to around 900mm in the mountainous regions. In winter, it is notuncommon to see snow on the highest mountain peaks.POLITICS: Since the accession of Sultan Qaboos binSaid Al Said in 1970, Oman has gone through a sub-stantial political reform process. The sultan is the headof state and head of government and is advised by theCouncil of Ministers, which acts as a cabinet. Two bod-ies act in a consultative role for the government. TheConsultative Council is an 83-seat body with popular-ly elected members serving three-year terms. In early2011 Sultan Qaboos granted the council increased leg-islative and regulatory powers. The more senior State The majority of the Sultanate’s land mass is covered by deserts and valleys, with some mountainsCouncil has 48 members who are appointed by the sul-tan. All Omanis over the age of 21 are eligible to vote. Non-metallic industrial minerals, such as limestone andThe last Consultative Council elections were held in silica sand, which are used in the steel and glass-man-2007 and around 390,000 Omanis voted in them, an ufacturing industries, respectively, are in abundance.increase of around 100,000 voters from the previous Large, commercially viable deposits of other minerals,elections, which were held in 2003. such as dolomite, gypsum, zinc and cobalt, are regu-ADMINISTRATIVE AREAS: Royal decree No. 114/2011, larly being found as well, and new ventures are beingissued in late 2011, reorganised Oman’s administrative formed to exploit this wealth of industrial minerals indivision, streamlining governance. For administrative pur- a sustainable, economical way.poses the Sultanate is now divided into nine gover- NATURAL RESOURCES: Unlike most of its neighbours,norates: Muscat, Dhofar, Musandam, Al Buraimi, Al Bati- Oman does not have bountiful supplies of oil and itsnah, Al Dakhiliyah, Al Sharqiyah, Al Dhahira and Al Wusta. geography and geologic composition make extractionEach governorate is further subdivided into wilayats, difficult. It is not an OPEC member country. For 2010,or provinces. There are 61 wilayats in total. the government sustained oil production above 800,000INFRASTRUCTURE: Oman has approximately 11,071 barrels per day (bpd). The government has a goal ofkm of paved roads and 16,667 km of unpaved roads. increasing this to 1m bpd by 2012 with the aid ofThe road network covers most parts of the country and enhanced oil recovery techniques and further explo-paved roads are generally of high quality. With such a ration. However, the increasingly complex methodslong seafaring history, it is no surprise that ports play required to extract the remaining reserves have result-an important economic role in Oman. There are cur- ed in a steadily rising cost per barrel. Petroleum Devel-rently five active ports in the country: Sultan Qaboos opment Oman (PDO) made headlines in 2009 when itPort, the Port of Salalah, the Port of Sohar, the Port of made several oil discoveries, including joint heavy oilKhasab and the Port of Shinas. Each port is located in in a PDO acreage called Al Ghubar South, which isa different part of the country and serves a different believed to hold around 1bn barrels of oil. Oman alsofunction. The Port of Duqm, which is currently under has a significant amount of natural gas, estimated atconstruction, will be one of the country’s largest ports 795.2bn cu metres of reserves. To try and reduce itsupon completion. There are currently two airports in economic reliance on oil, Oman has invested heavily inthe country, in Muscat and Salalah. Both are undergo- liquefied natural gas facilities. The availability of cheaping major upgrades to accommodate expected growth natural gas has also been the engine behind big indus-in domestic as well as international passengers and trial developments, mainly in the northern city of Sohar.tourist traffic. Another four additional regional airports POPULATION: The Sultanate has a population ofare also under construction in Duqm, Sohar, Ras Al approximately 2.9m, according to the most recent gov-Hadd and Adam. In terms of communication networks, ernment estimates, of which roughly 900,000 are expa-the Sultanate is connected to the UAE, Yemen and Pak- triates who come mostly from the Indian subcontinentistan via fibre-optic cables. Work is ongoing to estab- and other countries in the Middle East.lish a fibre-optic connection with Saudi Arabia. Oman is a very young country: 55% of the popula-MINING: Archaeological evidence shows that copper tion is under 20 years of age, while 83% is under thewas both extracted and smelted up to 4000 years ago age of 35. The gender ratio of males to females is 1.26:1in Oman. Much of these copper reserves have since been and life expectancy currently stands at approximatelyexhausted. However, new mineral finds continue to be 73 years. Some 78% of the population lives in urbanmade, including reserves of gold, silver and chromite. centres. The largest city – and the administrative and THE REPORT Oman 2012
  4. 4. 14 COUNTRY PROFILE Baluchi elements all intermingle, resulting in very open- minded and hospitable people. EDUCATION: In 2010, about 12% of the government’s expenditure budget was allocated to education. There are more than 1000 public schools throughout the country and Omanis enjoy free public schooling through the secondary level. The government also funds schol- arships at the tertiary level. The adult literacy rate is 86.7%. Higher education in Oman is still relatively young but developing steadily. Sultan Qaboos University, the first university in the country, was opened in 1986 and is now the premier tertiary institution and home to some 17,000 students in colleges covering agriculture, art, commerce and economics, education, engineer- ing, law, Islamic studies, medicine, nursing and science. It also offers graduate studies, including a doctoral degree, for certain disciplines. The private sector has been increasingly involved in tertiary education. Indeed, there are now 24 private colleges and universities. Many Omanis take advantage of government-fund-Forts are a key feature of the Sultanate’s architecture, which is known for its diversity and imagination ed scholarships to study both at home and abroad, business capital – is Muscat, with a metropolitan area regardless of their financial situation. Total tertiary population of more than 1m. The other large popula- enrolment stands at around 80,000 students, represent- tion cluster is the Batinah coastline, which stretches ing about 19% of the population between the ages of between Muscat and the city of Sohar. Around half of 18 and 24. The government aims to increase that fig- the country’s population is concentrated in this stretch ure to 50% by 2020. Due to Oman’s young population, of land. The second most populous city is Salalah, in the demand for higher education is growing quickly and, the Dhofar region by the Yemeni border, which is home as new private universities are accredited, there is a to around 210,000 people. A large proportion of the greater emphasis placed on improving quality. rural population still works in agriculture and fishing. ARCHITECTURE: Forts are probably the most visible and Many employers have in recent years come to depend characteristic architectural features of Oman. Practi- on foreign workers from South Asia and the Philip- cally every city and every village has one, and of those pines. The largest foreign community comes from the you can find, Muscat’s Mutrah or the city of Nizwa are southern Indian states of Kerala, Tamil Nadu and Kar- probably the most famous examples. nataka, and represents more than half of Oman’s labour. Oman’s capital has successfully resisted the region- The government has developed a policy called Oman- al trend of erecting high-rise buildings. However, the isation to encourage private sector companies to design of many buildings is often quite imaginative and increase the numbers of nationals they employ. makes up for the lack of skyscrapers. Even outside of LANGUAGE: Although Arabic is the official language, the cities, the architectural diversity is quite large, with English is also widely spoken, and almost all signs and modern houses made of expensive materials and more postings are written in both. Many nationals also speak modest dwellings constructed using less sophisticat- local dialects of Arabic, such as Baluchi, derived from ed mediums. Housing made of palm-wood is still com- Old Persian. Semitic dialects are found in the Dhofar mon along the coast from Duqm to Shuwaymiyah. In region and Kumzari, a sub-branch of Persian, is spoken the Sharqiya Sands, Bedu use goat-hair tents, and many in northern Musandam. Other languages spoken in the people in the mountains live in caves with an impro- Sultanate include Hindi, due to the widespread influ- vised front door. Most interesting of all are the round ence of Indian immigrants, as well as French and Swahili, houses made from constructed, interlocking sticks that due to historical links with Zanzibar and East Africa. cling to Dhofar’s hills. They were once thatched but now RELIGION AND CULTURE: Oman is the only country are more likely to be covered in stronger material. in the world where the Ibadi strand of Islam is the dom- WILDLIFE: Oman has one of the richest wildlife habi- inant religion; it is practised by approximately 60% of tats of the Arab world, and while the authorities encour- the population. The Sultanate is religiously tolerant and age eco- and nature tourism the emphasis is very much is also home to sizeable Shia and Sunni populations, on protection, with the animal welfare considered para- while the largest minority religion, accounting for around mount. Indeed, the largest confirmed population of 13% of the population, is Hinduism, primarily due to the the rare Arabian leopard inhabits the Dhofar region. large proportion of the expatriate population coming Other endangered species that live in Oman include from the Indian subcontinent. Due to Oman’s location fox, wolf, hyena, hare and oryx. Avian fauna includes and its long seafaring heritage, the population is a vulture, eagle, stork, falcon, sunbird, bustard and Ara- unique product of various waves of immigration, while bian partridge. The Sultanate’s warm waters are also its culture is a compelling combination of diverse influ- home to an array of rich sea life, with dolphins, turtles ences. African, Persian, Arabic, Zanzibari and even and hundreds of varied fish species present in its waters. www.oxfordbusinessgroup.com/country/Oman
  5. 5. 16 COUNTRY PROFILE VIEWPOINT Sultan Qaboos bin Said Al Said Serving the common interest Sultan Qaboos bin Said Al Said on past achievements and national development goals for the future I have spoken before about Oman’s shura (consulta- blessed renaissance, required us to exert major efforts tion) experiment and about the gradual path we chose in the field of establishing the infrastructure which is to build it on. These firm foundations will ensure its nat- the pillar and first cornerstone of comprehensive devel- ural growth, enabling it to meet the requirements of opment. The provision of this infrastructure – in all each phase of national development and respond to parts of the Sultanate – has given us major opportu- the community’s needs. By applying wisdom in its vision nities for construction development in various cities and and in the implementation of its procedures, the shu- villages throughout Oman and paved the way for the ra will fulfil its aspirations of contributing more effec- establishment of economic, commercial and industri- tively to the decision-making process for the higher al projects as well as different educational, cultural, interest of the country and citizens. health and social institutions. Many notable achievements were made along the And no wonder. Omanis have been, from ancient path of this blessed experience during the past phase, times, makers of civilisation with their great historical and as we express our thanks for the efforts exerted heritage, their openness to other civilisations across in this regard. We are looking forward to a qualitative the seas and oceans, and their ability to communicate shift in national work which will be carried out by the and exchange mutual benefits with others. This is why Council of Oman during the upcoming period in the light Omanis are well-qualified to be an example and mod- of the expanded powers given to it in the legislative el for others to follow in this age of rapid development and auditing fields. There is no doubt that the challenges and progress. They are also capable of coping with the ahead are enormous, but we are quite confident that challenges of the modern age, adopting new ideas, all members of the council will play their role effective- and benefitting from science and technology, but at ly and exert their utmost efforts for the sake of lead- the same time preserving the values and principles ing their country onwards to greater honour, glory, that they believe in, and the traditions and authentic progress and prosperity, security and stability, while customs with which they were brought up. putting before their eyes the enormous responsibili- We all know that progress is part of the reality of the ties incurred by their council as a body which takes part universe we live in. However, many ways and means are in the decision-making process. required in order to achieve it. The first of these is a The council members, as citizens seeking their coun- strong will and determination, along with a readiness try’s prominence, should also work continuously and to face challenges and persist in one’s endeavours to relentlessly to ensure the success of plans aimed at con- overcome difficulties and obstacles. solidating the Sultanate’s economic, social and scien- Every nation that desires to live – in the full mean- tific potential to serve the common interest, and raise ing of the word – needs to work tirelessly, and diligent- the country’s regional and international status to help ly with dedication to give generously so as to utilise its it achieve its commitments at both local and foreign capacities and skills and invest in its resources and levels without slowness or delay. It is obvious that this potential. In this way it can build a great and illustrious requires more cooperation and coordination between present and prepare for a decent and prosperous future. government departments and the Council of Oman in Through God’s grace, the Omani people have been particular, and between these two and the private sec- granted many of these qualities, and over the past four tor, the civil societies and corporations in general. decades they were able to realise achievements which The building of a modern state which we pledged to still stand as clear evidence that cannot be denied by establish since the first moment of the dawn of the anybody who has the power of vision and insight. We www.oxfordbusinessgroup.com/country/Oman
  6. 6. COUNTRY PROFILE VIEWPOINT 17have always affirmed our attention to the develop- allowed in any shape or form; we instruct our govern-ment of human potential and this resource takes top ment to take all necessary measures to prevent it andpriority in our plans. The human being is a pivotal com- we direct all the audit authorities to fulfil their dutiesponent around which all types of development revolve. resolutely in this regard with the full force of the law.The ultimate goal is the happiness of the individual; pro- Justice must take its course and become our goal. Ourviding him with means of a decent living and guaran- support for the judiciary and its independence is a dutyteeing his security and safety. to which we have committed ourselves, and we recog- As youth are the present and future of the nation we nise that it is imperative to respect its decisions with-gave them the attention they deserve throughout the out favouritism, as all are equal before the law.years of the blessed Renaissance as the government We are living in a world that has witnessed rapidendeavoured to provide them with education, training, developments at regional and international levels, whichqualifications and employment opportunities. The forth- have had a range of different impacts and opposingcoming stages will witness, with God’s permission, reactions. As the world is characterised by overlappinggreater attention and greater care to provide more interests and policies we cannot be detached fromopportunities for the youth in order to consolidate what is happening around us. We in the Sultanate,their gain in knowledge, strengthen their talents in cre- despite the crises swarming the world and the difficul-ation and production, and increase their participation ties in predicting their limits, timescale and repercus-in the country’s comprehensive development march. sions on the economy, endeavour to lessen these effects As education is the basic pillar of development, and by adopting balanced economic policies to preserve ourin order to produce a responsibly aware generation gains and boost our economic plans in various spheres.with expertise and skills that aspires to a higher level Going forward, we will continue to show our deter-of knowledge, it is necessary to conduct a comprehen- mination to complete the establishment of the mod-sive assessment of the educational system to achieve ern state based on solid foundations that guaranteethese aspirations and ensure that graduates can ben- the continuation of the development of our country’sefit from all of the available job opportunities in both natural and human resources, spreading education,the public and private sectors. culture and knowledge, providing security and stabili- The construction, economic, commercial and indus- ty, and consolidating the basis of institutional work thattrial projects established in the Sultanate have absorbed leads, with God’s assistance, to more progress, pros-many national workers, and the private sector has perity and a decent living for all citizens.proved its cooperation in shouldering the responsibil- We would like to salute and express our apprecia-ity as it assumed a tangible role in cooperating with the tion to all dedicated workers from our Omani sons andgovernment and boosting sustainable development daughters, wherever they are and whatever responsi-efforts. We are looking forward to a greater role to be bilities they bear, and to all those who have helped toplayed by the private sector, particularly in the field of create a better future for the Sultanate and raise itsthe development of human resources. status to new heights, while protecting its gains and Government work, as is well-known, is a matter of safeguarding its achievements, security and stability.trust and responsibility. It should be carried out with In particular, we salute our armed forces and securitytotal disregard for personal interests and with complete services for their sacrifice and selflessness. To themhonesty for the service of the community, and it should we reaffirm that we shall continue to extend our carenever countenance corruption. Corruption must not be and support for the development of their potential. THE REPORT Oman 2012
  7. 7. 20 COUNTRY PROFILE DIALOGUE Martin Ferguson, Australian Minister for Resources & Energy RPN Singh, Indian Minister of State for Petroleum & Gas Renewable drive OBG talks to Martin Ferguson, Australia’s Minister for Resources and Energy and RPN Singh, India’s Minister of State for Petroleum and Gas What should the ideal fuel mix be in the next 5-10 to make meaningful contributions internationally. Agri- years? What role should renewables play in this? culture will be excluded from the system so the carbon FERGUSON: Australia’s current mix is about 82% coal, price does not apply to that sector. Instead, we are 10% gas and 8% renewables. With our renewable tar- facilitating carbon offsetting through agriculture and get of 20% by 2020, I see growth in gas as base load through our timber industry. The biggest offset we can energy as well as an increase in wind and solar. achieve, however, is a breakthrough in clean technol- Our job as a government is to invest in technology. ogy. You can have all the offsetting mechanisms in the We have a clean energy programme to facilitate the world, but if you cannot make the breakthrough in breakthrough of technology in geothermal, solar, bio- technology, then you do not solve the problem. We are mass and ocean power. We are not about picking win- a major exported of coal and liquefied natural gas (LNG) ners. It is a mechanism to find appropriate energy types. to energy-hungry countries, and meeting their energy SINGH: Currently we are primarily dependent on hydro- security aspirations means higher emissions out of Aus- carbons for our energy. Coal accounts for 53.5%, oil 33%, tralia. Alternately, for every tonne of CO2 produced out gas 9.35%, renewables 3.10% and nuclear 1.05%. Over of Australia via LNG, we reduce emissions in a place like the coming decade coal will contribute about 50%, but China or India by about 4 tonnes. gas, renewables and nuclear energy will each rise steadi- ly. We have adopted a solar mission which aims to gen- What strategies and priorities can exist at an inter- erate 20,000 MW by 2020, up from 18 MW today. India national level to prevent excessive oil price volatil- is the world’s fourth-largest producer of wind energy. ity in global energy markets? Our current production is 13,000 MW, and we hope to FERGUSON: It is about transparency and the opera- increase that to 38,000 MW by 2022. tion of the market. Getting back to political normalcy in Libya is going to be the solution. Unfortunately, we How pressing an issue is climate change? What is have all had to ride it out during the first 10 months of being done to cut carbon emissions? 2011. Hopefully now with Libya moving towards a set- SINGH: About 70% of our population derives employ- tlement things will improve. We need to see what occurs ment from agriculture-related sectors. Hence, climate in the OPEC countries, and also see what the impact change has major implications for a country like India. of interruptions in places like Yemen and Oman will be. However, India’s carbon footprint is very small. Per capi- There is no short-term political fix to the price of oil. It ta emissions are 1.2 tonnes compared to over 10 tonnes is determined by the market, and when you try and inter- for most OECD countries. India, with 17% of the world’s fere with the market you come off second best. population, contributes only 4% of global greenhouse SINGH: The lack of stability and transparency in the inter- emissions. The dilemma before a country like India is national oil markets is a key concern for oil importing how to meet the developmental aspirations of its cit- countries like India. We need resolute action to reduce izens while catering to the imperatives of climate change the role of speculation in commodity markets. mitigation. India is determined not to exceed the per We are clear that the price of oil cannot be left entire- capita emissions of the developed countries while ly unregulated, and that we need to improve our under- meeting its development goals. standing of the inter-linkages between the physical FERGUSON: We are taking it very seriously, putting and financial markets. In the future, consumers, traders ourselves through a lot of political pain to affect a car- and the financial markets will need to work together to bon market pricing mechanism. We are taking action strike a balance between market dynamics and stability. www.oxfordbusinessgroup.com/country/Oman
  8. 8. COUNTRY PROFILE INTERVIEW 23 Shri S M Krishna, External Affairs Minister of IndiaCooperative potentialOBG talks to Shri S M Krishna, External Affairs Minister of IndiaWhat can Oman learn from India’s increasingly devel- exploring opportunities in all sectors, for the moment,oped economy, particularly in regard to becoming it is limiting itself to investment opportunities in Indiaan innovation-driven economy? in sectors in which foreign investment is permitted byKRISHNA: In recent years, the Indian economy has the government. Provision exists for the JIF to enhanceproved its resilience, successfully withstanding the its corpus of $100m to $1.5bn in the future, depend-adverse effects of the global financial crisis. The econ- ing upon its experience in the initial period. The mainomy has grown close to 8-9% for the past several years, purpose of this collaboration is to attract capital intorising 7.6% in 2010-11, and expectations are close to India from Oman and, at a later stage, to encourage Indi-9% in 2011-12. India’s economic reforms in the last an investment in Oman. The JIF has opened a new chap-couple of decades have gradually opened its markets. ter in relations between the two countries.Liberalised markets have led to new business modelsthat encourage and facilitate innovation in the indus- What are some examples of bilateral investmenttry and service sectors. The Indian business communi- between the two countries? What are the benefits?ty, growing more confident and successful, is ready and KRISHNA: Investments from India in Oman create theirwilling to share this experience with Oman. own dynamic of mutual benefits. Such investments can In Oman too, we have observed steady progress and help Oman enhance its capacity for non-oil exports anda determined effort by the government to reduce its thereby reduce its reliance on hydrocarbons. Throughdependence on the energy sector and diversify the Oman, Indian industries can access the GCC market. Theeconomy. India and Oman, therefore, have a lot to learn potential for bilateral cooperation between our coun-from each other. At this juncture, we need to jointly tries has remained unexplored and unexploited for aexploit opportunities in sectors such as food security, long time in the area of manufacturing. For instance,medicine, agriculture, petrochemicals, pharmaceuti- with easy access to naphtha, Oman could be a primarycals, technical and vocational training, higher educa- manufacturer of fertilisers for the Indian market. Thetion, and science and technology. Oman India Fertiliser Company in Sur is a shining exam- The two countries must also expand cooperation ple of bilateral investment for the mutual benefit to bothbetween their small and medium-sized enterprises, countries. Simultaneously, India wishes to develop crudewhich is an area offering many opportunities to gain oil storage hubs to serve the South Asian and East Asianfrom each other’s strengths. India already offers tech- markets and Oman could invest in India to support thisnical training to Omani participants under its Techni- endeavour. The recent commissioning of Bharat Omancal and Economic Cooperation Programme, which has Refinery in Bina in India is another example of a suc-received an overwhelming response from Oman. cessful Omani investment into India.How would you rate the success to date of the What potential for cooperation exists in energy?India-Oman Joint Investment Fund (JIF)? KRISHNA: The Indian Minister for New and RenewableKRISHNA: The JIF was launched in February 2011 with Energy visited Muscat in January 2010 to explore thean investible corpus of $100m to be contributed equal- potential for bilateral cooperation with Oman in thisly by the State General Reserve Fund of Oman (SGRF) field. Since Oman holds immense potential for solar andand the State Bank of India (SBI). It is currently oper- wind power and is currently in the process of framingated by a Mumbai-based joint management company its policies to tap these sources of energy, India is keenwith 50:50 equity for SBI and SGRF. While the JIF is to share with Oman its own experience in this field. THE REPORT Oman 2012
  9. 9. 24 COUNTRY PROFILE INTERVIEW Lord Astor of Hever, Parliamentary Under-Secretary of State An effective relationship OBG talks to Lord Astor of Hever, Parliamentary Under-Secretary of State and Government Spokesperson, UK Ministry of Defence Have UK-Oman ties changed since the coalition region and the UK. The first was developed in Oman government came into power in the UK? about water issues. In total, 35 academics took part and ASTOR: Relations are as good as we can hope for. The came up with six research proposals on sustainability Queen had a successful state visit in November 2010 and water. Further symposia will address diabetes, and there have been 10 ministerial visits since the gen- renewable energy and carbon capture and storage. eral election in 2010. I myself have been to the Sultanate four times. This shows how seriously Oman is being tak- Will the focus on high-end tourism produce the en as a focus for British relations. After the state visit, desired 3% sector contribution to GDP by 2020? we set up a joint working group to look at a range of ASTOR: Oman’s oil and gas reserves are finite and cultural, educational, health and business areas. We diversification plans are in place to develop new rev- also discussed a visa waiver for diplomatic and special enue streams. Tourism was identified in the Economic passport holders, an issue which had been brought to Vision as an area in which Oman has natural advantages my attention a number of times. We have made signif- – beautiful coasts, stunning deserts and exceptional icant progress on this and many other areas. hotels. If this is further developed in the Sultanate’s char- There is a concerted effort to work with our part- acteristically moderate way, there is every reason to ners in Oman as well as in the wider region, a commit- believe it will be a success. Many areas present oppor- ment we made in opposition. The cross-departmental tunities for development, and plans are being made with Gulf Initiative is the product of that. Chaired by the For- sustainability and environmental concerns at the fore. eign and Commonwealth Office, the programme has input from the Ministry of Defence, Ministry of Culture What do you think the possible expansion of the and Sport, Department for International Development, GCC will mean for regional politics? Ministry of Health and a number of others. ASTOR: I was recently in Jordan and it is clear to me there is a lot the kingdom can bring to the GCC. The To what extent does the UK defence relationship country has a very well educated and qualified work- with Oman underpin other areas of collaboration? force. At the same time, GCC states have the capacity ASTOR: Defence is perhaps one of the most important to invest not only in accelerating the diversification of aspects of our collaboration with Oman. We have an their own countries but also that of their neighbours. historic relationship with the Sultanate, which, as with all effective relationships, has to be mutually benefi- How can Oman’s traditionally moderate foreign pol- cial. It is and both countries are happy with it. We have icy help diffuse regional instability? many Omani cadets at Sandhurst, Cranwell and Dart- ASTOR: The Sultan’s great dictum has been that Oman mouth officer training colleges, as well as on other is a friend to everyone. Historically, ties with Iran have career courses. Oman provides regular opportunities been very strong. Indeed, the Shah’s forces assisted with for our own forces to train in testing and relevant envi- unification of the modern Sultanate in the Dhofar cam- ronments and conditions. The UK still provides about paign. The West can learn from listening to what the 90 loan service personnel across all three services to Omanis have to say on issues regarding Iran from their train or assist in a broad cross section of areas. So, the unique position. More recently, Yemen has become a military connection remains very strong. great concern to the world and we will similarly listen The British Council in the GCC has a strategy to cre- respectfully and very carefully to what Oman has to say ate research partnerships between universities in the on this situation and indeed any other in the region. www.oxfordbusinessgroup.com/country/Oman