Sultan Haitham bin Tariq al-Stated arrived in Neom, Saudi Arabia, on July 11, 2021, in his first overseas journey since turning into the sultan of Oman on Jan. 11, 2020. Initially of his two-day go to to the dominion he was met by King Salman and accompanied by a high-level Omani delegation. A slew of latest agreements had been signed throughout commerce, tradition, and transport. The go to coincided with the opening of the primary ever direct land route between Ibri in Oman and al-Ahsa in Saudi Arabia spanning 800 km throughout the Empty Quarter, as an alternative of a circuitous 1640-km route through the United Arab Emirates (UAE). The brand new street is critical for commerce, tourism, and Omani-Saudi connectivity.
The timing of this go to is instructive. Inside the previous few days, the dominion and the UAE have skilled tensions in bilateral relations after the OPEC summit regarding OPEC+ quotas post-2022, the dominion’s up to date commerce guidelines on imports from different Gulf Cooperation Council (GCC) states, and Saudi journey restrictions from the UAE as a result of COVID-19. In distinction, the arrival of Sultan Haitham highlights good neighborliness and that unity nonetheless exists within the GCC. Inside the previous two months, Oman has skilled large-scale protests about unemployment and corruption, a decade after comparable protests broke out on the onset of the Arab Spring in 2011. Sultan Haitham might be hoping that the offers signed with the dominion throughout his go to will assist alleviate a number of the financial challenges that Oman faces.
The Omani financial system
Saudi Arabia, together with the UAE, has invested closely in Oman and has to this point created extra jobs than states resembling China. Amid a mix of structural pressures, particularly the financial imperatives of a rustic with a excessive breakeven value per barrel of oil and low confirmed reserves, that are solely anticipated to final 25-30 years at 2019 manufacturing ranges, Oman has been pressured to rethink its financial insurance policies. Authorities debt to GDP rose from 4.9% on the onset of the oil crash in 2014 to 60% in 2019 and 80% in 2020. Additional financial fallout from COVID-19 is predicted.
After Sultan Qaboos bin Stated, Oman’s long-time ruler, handed away in January 2020, Sultan Haitham spoke about the necessity to “develop devices of questioning and accountability.” On the identical time he introduced the institution of a social safety system to offer a good way of life to residents and a cushion towards the unfavourable impacts of financial reforms happening. Oman additionally moved to ascertain new financing such because the bridging mortgage coordinated by First Abu Dhabi Financial institution and Financial institution Muscat. Like Saudi Arabia and the UAE, Oman has shaken up its ministries, such because the Ministry of Power and Minerals, to higher align with public coverage challenges, and is prepared to delegate to a youthful technology in central and native authorities. It has additionally created new establishments such because the Oman Funding Authority and Power Growth Oman.
A bridging function within the Gulf
Nearer Saudi-Omani ties will assist to consolidate Saudi features in al-Mahrah in Yemen, together with post-war planning and safety on the border with Oman. This dovetails nicely with U.S. pursuits in Oman, together with an settlement signed in 2019 that governs U.S. entry to Duqm and Salalah ports to advertise “mutual safety targets.” Duqm is massive sufficient to accommodate an plane provider and is ideally positioned to mission pressure into the Arabian Sea. Thus, Saudi Arabia, Oman, and the U.S. will proceed to strengthen their regional safety measures and set up a stronger sphere of affect to fight terrorism and piracy.
Oman will proceed to help diplomacy to carry the Yemen battle to an finish and facilitate contact between Saudi Arabia and Iran, leveraging a excessive degree of belief constructed up with Iran over a number of many years. Sultan Haitham will search to take care of Oman’s independence established by Sultan Qaboos over the earlier many years. For instance, when Saudi Arabia, Bahrain, the UAE, and others had been reducing diplomatic relations with Iran in 2016 after some Iranians stormed the Saudi embassy in Tehran following the execution of distinguished Saudi Shi’a cleric Nimr al-Nimr, Muscat maintained diplomatic relations. It did, nonetheless, condemn the violence. Oman was the one state to take care of diplomatic relations with Syria after 2011 and has tried to contribute to peace negotiations in Syria, the place Oman’s then-International Minister Yusuf bin Alawi bin Abdullah met with President Bashar al-Assad in 2015, 2019, and 2020. Different makes an attempt at diplomacy had been made in Muscat in 2015. Oman might proceed to play a bridging function in U.S.-Iran diplomacy following the Biden administration’s return to negotiations on the Joint Complete Plan of Motion.
Sultan Haitham might be seeking to maximize inward funding whereas persevering with to leverage Oman’s geostrategic location to ensure its safety and punch above its weight in regional and worldwide affairs. However, dealing with inner and exterior challenges concurrently will diminish the financial and overseas coverage choices accessible to him and his authorities as he seeks to quicken the tempo of diversification.
Dr. Robert Mason is a Fellow on the Sectarianism, Proxies and De-sectarianisation mission at Lancaster College and a Non-Resident Fellow on the Arab Gulf States Institute in Washington. The opinions expressed on this piece are his personal.
Picture by ANDREW CABALLERO-REYNOLDS/AFP through Getty Photos