[oman-l] Oman's economic future

[Abdulla Baabood]

On Mon, 15 Jun 1998, Michael F. DAVIE wrote:

> >>While I agree with Abdulla Baabood's analysis, I feel that one should not
> >>state that "Oman" is this or that "Oman" should do that. Behind the word
> >>"Oman" there are people, actors of a situation.
> >
> >***Hehehe, we're entering an area of TABU here. If you believe that the
> >Omani man or woman can stake their future, you're wrong. The "people" has no
> >saying, and they cannot act for their  situation: Oman is NOT a democracy. I
> >am putting no value in this, and I hope it won't be misunderstood (though of
> >course it will) by westerners value of what is right and justice: IMO, most
> >Omanis have a higher value of life than westerners believing going to the
> >poll box everyn fourth year or so is the ultimate freedom.
> >
> >If Oman, as a country, and
> >>thus as a society, needs to find a way out of what seems to be a very
> >>uncomfortable future situation, then the anaysis should centre on the
> >>people who will do it.
> >>
> >>In other words, who are the actors of tomorrow's Oman? How do they fit in
> >>with the local,  regional or international economic situation? Who, in
> >>Dubai, managed to make that country what it is, and why? How did they see
> >>the opportunities, how did they use "the system" to push forward their
> >>agenda, what resistances to it were made, how were they able to circumvent
> >>these obstacles? What is different in Oman?
> >
> >***You can't compare Oman to Dubai. Oman have some pride. The fact that you
> >can buy anything in Dubai if you have the money doesn't make it to an
> >example for Oman. Dubai business doesn't represent Omani values. What is
> >Dubai? Some would say the prostitute of the Middle East. It's nothing
> >remarkable about Dubai - lacking oil money they do the business without tax
> >and moral values. I'm exagarating a bit here, but In hope you get my point.
> >Dubai will be just as short lived as business.
> >
> >
> >Walang ano man
> >Tommy
> 
> I feel that the debate on whether such or such a country is "democratic" or
> not, whether is conforms to "Western" standards or not, is a vast and
> complex question, which is not necessarily part of the question asked
> above. I fully understand that Oman political life and standards are not
> the same as elsewhere, and "democratic" and "western" nations should be no
> more of a standard than any other country or political system. It would be
> very difficult to prove that the "western  democratic" system is the best,
> etc.
> 
> However, whatever the choice of Dubai, it was done by people, who
> identified an apportunity, and which, for the time being, has  succeeded.
> It also succeeded because clients needed it (needed that point in space for
> a particular type of economy at a particular point in time). This, however,
> was apparently not the case for Oman.
> I feel it would be interesting to understand why there was not the same
> perception of things in Oman, as compared to Dubai. Or to put things the
> orther way round, what was the world view of Omani decision-makers, both
> private and State, in this respect.
> >From this idea, it should be possible to extend the debate to who are the
> persons trying to occupy the "window of opportunity", and how do they see
> the post-oil Omani situation?
> 
> Salamat
> Michael Davie
> 
> 
> 
> 
> @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
> Michael F. DAVIE          davie@droit.univ-tours.fr
> UMR 6592 "URBAMA" (Urbanisation dans le Monde Arabe)
> 23 rue de la Loire,  B.P. 7521,  37075 Tours Cedex 2 (France)
> Tel. : (+33) 02 47 36 84 69,  Fax. : (+33) 0 2 47 36 84 71
> @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
> 
> 
> 






I think that the question above begs itself. To rephrase the questions, If
Oman's economy has not developed quick enough like that of Dubai, then why
and who is responsible for that in Dubia and Oman?  Although as Tommy had
said this may be viewed by some as sensitive and taboo areas to talk about
in public, I think the questions are relevant and need to be discussed.
Hearing the different views could only be good for Oman and for all of us
on the list. The reason for marking this as a red area is mainly due to
the simple diagnosis of the problem.

It is always very easy and tempting to blame governments in any analysis
of this sort and hence the sensitivity in this case. This is not to say
that governments and policy-makers are blameless. They certainly shoulder
much of the responsibility. But that is not the whole picture. I think the
responsibility falls squarely on all sectors (public and private). Infact
the private sector, is as much to blame as is the public sector in Oman.
Yes, Oman like most/all other countries in the world, suffers from the
ills of government bureaucracies and slow decision-making, etc. etc.. This
is common to most if not all governments and Oman is no exception. One can
go on criticising this ministry/government official /government policy or
that but does it explain the situation? Infact, this is widely done in
Oman and I believe the government does welcome and accept criticism.
Constructive criticism could only help and the government I believe does
not object to it, otherwise I will not be writing this as I could be
putting myself in trouble. For those of you who do not know, such
criticisms are aired publicly on live debates from the Omani Consultative
Council (Majlis Ash Shura), where ministers are questioned on their
policies by elected representatives. There has been some heated debates
where ministers have been put on the spot by members of the council which
is available live to the public on the government television. Infact, the
government of Oman has been pioneer in evolving its own brand of democracy
and public participation in decision making. With an enlightened and
progressive leader Oman is moving ahead with all kinds of reforms, taking
pride of its own history, culture and heritage, and taking into account
its level of development. In the Basic Law, the blueprint for the
constitution, the Sultan guaranteed everyone's freedom, including freedom
of mind and expression. Oman has never been and is by no means a
repressive state as the Omanies enjoy unparalleled freedom, not
experienced in many countries in the Middle East. I think,  if the Omanies
do not share their views in public it's because of their cultural
background and upbringing or their misconception rather than the state
policy.

Let me just turn quickly to put some blame on the private sector (for a
change) before I try to draw some sketchy explanations that might help in
answering some of the above questions. The Omani private sector is, in my
opinion somewhat complacent because of too much government protection. The
Omani government has overprotected its private sector and has not opened
the country for competition from abroad. While the country has certainly
an open door trade policy, it did not allow and encourage foreign
investment until recently. And even then its only allowed in few sectors
(not allowed in trade). Trade has been (and I believe still is restricted
to Omani nationals/ companies). Most of the trade is the hand of few Omani
companies because of the protection of agency law which
has only been abolished recently, despite much objection from the large
family business houses. Such protection has made Omani trade companies
complacent and because of their monopoly on the local market did not look
out for re-exports, except for few. The private sector has long and still
is lobbying the government for protection which in some cases has been
detrimental to the public at large and to the economy.

The government has been trying to encourage the role of the private sector
butthe private sector itself has been slow. Instead of lobbying the
government to open up and liberalise the economy which is the case in many
countries, the private sector and the large family business houses have
been doing the opposite and the government has been getting some mixed
signals from the private sector. For example the abolishing the agency law
and holding consumer fairs and exhibitions have been fought against
fiercely by some of the large family houses because it underlines their
control and monopoly of the market. The private sector has not evolved to
take a serious role in developing the economy and, apart from some large
family houses, the private sector has no effective voice to make. The Oman
Chamber of Commerce is the only organised forum for the private sector and
I have yet to meet an Omani business person who does not say that it's a
waste of time and money!  Is that enough blasting the private sector
and giving it some share of the blame? Anyone wants to contribute/
add/agree/disagree?

Finally I feel that instead of blaming one or the other, government or
private sector as all share the blame, letUs look at some other reasons:

1) Oil has created an oil mentality that plagued most of the oil producing
countries. Oil rent and rentier mentality has favoured easy money over
hard and productive work. Oil instead of helping other sectors has infact
destroyed those productive sectors by creating what is know in the
literature as the Dutch disease. This oil psychology became entrenched in
peoples thinking and attitude and has had a determining effect on the
economy.

2) Following the above and making things worse is the government policy of
providing the welfare state made possible by oil money. Oil money and
welfare state affected the society in such a way that it has become a
consuming and not productive society. This is how the new generation see
it easy money made from oil so why the sweet!  Dubai did not have the
luxury of oil revenues and was forced by necessity to trade and do other
things! Not necessarily what Oman wants.

3) Oman has had to overcome many problems not least the costly Communist
war in the South. This has made the government more concerned about
security and stability, hence the country is one of the most secure and
stable in the area. Some would argue that this may have been overdone at
the cost of economic development and liberalisation. Security and
stability are paramount and so they should for Oman but the government
needs to look at security in the widest sense, which include economic
security. 

4) Given the size of the country and the low-level of development before
1970 and the need for infrasturctural projects much  efforts has been
spent on this. However, such projects while socially and politically
important may not necessarily contribute to the productive capacity of the
country- only indirectly in some cases. Oman's geography and recent
history can not be compared to Dubai.

These are just some quick thoughts and I hope they provoke some response
and wider debate in the list.

Abdulla