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Oman (11/03)


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For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Sultanate of Oman

Geography
Area: About 212,460 sq. km. (about the size of Kansas). It is bordered on the north by the United Arab Emirates (U.A.E.), on the northwest by Saudi Arabia, and on the southwest by the Republic of Yemen. The Omani coastline stretches 2,092 km.
Cities: Capital--Muscat. Other cities--Salalah Nizwa, Sohar, Sur.
Terrain: Mountains, plains, and arid plateau.
Climate: Hot, humid along the coast; hot, dry in the interior; summer monsoon in far south.

People
Nationality: Noun--Oman. Adjective--Omani.
Population (2003 est.): 2.8 million.
Annual growth rate (2002 est.): 2%.
Ethnic groups: Arab, Baluchi, East African (Zanzabari), South Asian (Indian, Pakistani, Bangladeshi).
Religions: Ibadhi, 75%; Sunni Muslim, Shia Muslim, Hindu, Christian.
Languages: Arabic (official), English, Baluchi, Urdu, Swahili, Hindi and Indian dialects.
Education: Literacy--approx. 80% (total population).
Health (2003): Infant mortality rate---21.01/1,000. Life expectancy--72.5.
Work force (920,000): Agriculture and fishing--50%.

Government
Type: Monarchy.
Constitution: On November 6, 1996, Sultan Qaboos issued a royal decree promulgating the Basic Law which, clarifies the royal succession, provides for a prime minister, bars ministers from holding interests in companies doing business with the government, establishes a bicameral legislature, and guarantees basic civil liberties for Omani citizens.
Branches: Executive--Sultan. Legislative--Majlis Al-Shura (Consultative Council). Judicial--Magistrate courts handle criminal cases; Shari'a (Islamic law) courts oversee family law.
Political parties: None.
Suffrage: Limited.
Administrative subdivisions: Eight administrative regions--Muscat, Al Batinah, Musandam, A'Dhahirah, A'Dakhliya, A'Shariqiya, Al Wusta, Dhofar Governorate. There are 59 districts (wilayats).

Flag: flag of oman

Economy
GDP (2002): $20.3 billion.
Per capita GDP: $8,300.
Natural resources: Oil, natural gas, copper, marble, limestone, gypsum, chromium.
Agriculture and fisheries: (3.66% of GDP).
Agriculture: Products--dates, limes, bananas, mangoes, alfalfa, other fruits and vegetables. Fisheries--Kingfish, tuna, other fish, shrimp, lobster, abalone.
Industry: Types--crude petroleum (not including gas liquids) about 875,000 barrels per day; construction, petroleum refinery, copper mines and smelter, cement and various light industries.
Trade (2002): Exports--$11.1 billion. Major markets--Japan (21%), China (14%), Thailand (12%), South Korea (19%), U.A.E. (9%).
Imports--$5.4 billion: machinery, transportation equipment, manufactured goods, food, livestock, lubricants. Major suppliers--U.A.E. 27%, Japan 17%, U.K. 7%, U.S. 7%, Germany 5%.

PEOPLE
About 50% of the population lives in Muscat and the Batinah coastal plain northwest of the capital; about 200,000 live in the Dhofar (southern) region, and about 30,000 live in the remote Musandam Peninsula on the Strait of Hormuz. Some 600,000 expatriates live in Oman, most of whom are guest workers from South Asia, Egypt, Jordan, and the Philippines.

Since 1970, the government has given high priority to education to develop a domestic work force, which the government considers a vital factor in the country's economic and social progress. In 1986, Oman's first university, Sultan Qaboos University, opened. Other post secondary institutions include a law school, technical college, banking institute, teachers training college, and health sciences institute. Some 200 scholarships are awarded each year for study abroad.

Nine private colleges exist, providing 2-year post secondary diplomas. Since 1999, the government has embarked on reforms in higher education designed to meet the needs of a growing population, only a small percentage of which are currently admitted to higher education institutions. Under the reformed system, four public regional universities will be created, and incentives are provided by the government to promote the upgrading of the existing nine private colleges and the creation of other degree-granting private colleges.

HISTORY
Oman adopted Islam in the seventh century A.D., during the lifetime of the Prophet Muhammad. Ibadhism, a form of Islam distinct from Shiaism and the "Orthodox" schools of Sunnism, became the dominant religious sect in Oman by the eighth century A.D. Oman is the only country in the Islamic world with a majority Ibadhi population. Ibadhism is known for its "moderate conservatism." One distinguishing feature of Ibadhism is the choice of ruler by communal consensus and consent.

Contact with Europe was established in 1508, when the Portuguese conquered parts of Oman's coastal region. Portugal's influence predominated for more than a century, with only a short interruption by the Turks. Fortifications built during the Portuguese occupation can still be seen at Muscat.

Except for a period when Iran conquered Oman, Oman has basically been an independent nation. After the Portuguese were expelled in 1650 and while resisting Persian attempts to establish hegemony, the Sultan of Oman extended his conquests to Zanzibar, other parts of the eastern coast of Africa, and portions of the southern Arabian Peninsula. During this period, political leadership shifted from the Ibadhi imams, who were elected religious leaders, to hereditary sultans who established their capital in Muscat. The Muscat rulers established trading posts on the Persian coast and also exercised a measure of control over the Makran coast (now Pakistan). By the early 19th century, Oman was the most powerful state in Arabia and on the East African coast.

Oman was the object of Franco-British rivalry throughout the 18th century. During the 19th century, Oman and the United Kingdom concluded several treaties of friendship and commerce. In 1908, the British entered into an agreement of friendship. Their traditional association was confirmed in 1951 through a new treaty of friendship, commerce, and navigation by which the United Kingdom recognized the Sultanate of Oman as a fully independent state.

When Sultan Sa'id bin Sultan Al-Busaid died in 1856, his sons quarreled over his succession. As a result of this struggle, the empire--through the mediation of the British Government under the "Canning Award"--was divided in 1861 into two separate principalities--Zanzibar, with its East African dependencies, and Muscat and Oman. Zanzibar paid an annual subsidy to Muscat and Oman until its independence in early 1964.

During the late 19th and early 20th centuries, the sultan in Muscat faced rebellion by members of the Ibadhi sect residing in the interior of Oman, centered around the town of Nizwa, who wanted to be ruled exclusively by their religious leader, the Imam of Oman. This conflict was resolved temporarily by the Treaty of Seeb, which granted the imam autonomous rule in the interior, while recognizing the nominal sovereignty of the sultan elsewhere.

The conflict flared up again in 1954, when the new imam led a sporadic 5-year rebellion against the sultan's efforts to extend government control into the interior. The insurgents were defeated in 1959 with British help. The sultan then terminated the Treaty of Seeb and eliminated the office of the imam. In the early 1960s, the imam, exiled to Saudi Arabia, obtained support from his hosts and other Arab governments, but this support ended in the 1980s.

In 1964, a separatist revolt began in Dhofar Province. Aided by communist and leftist governments such as the former South Yemen (People's Democratic Republic of Yemen), the rebels formed the Dhofar Liberation Front, which later merged with the Marxist-dominated Popular Front for the Liberation of Oman and the Arab Gulf (PFLOAG). The PFLOAG's declared intention was to overthrow all traditional Arab Gulf regimes. In mid-1974, PFLOAG shortened its name to the Popular Front for the Liberation of Oman (PFLO) and embarked on a political rather than a military approach to gain power in the other Gulf states, while continuing the guerrilla war in Dhofar.

Sultan Qaboos bin Sa'id assumed power on July 23, 1970, in a palace coup directed against his father, Sa'id bin Taymur, who later died in exile in London. The new sultan was confronted with insurgency in a country plagued by endemic disease, illiteracy, and poverty. One of the new sultan's first measures was to abolish many of his father's harsh restrictions, which had caused thousands of Omanis to leave the country, and to offer amnesty to opponents of the previous regime, many of whom returned to Oman. He also established a modern government structure and launched a major development program to upgrade educational and health facilities, build a modern infrastructure, and develop the country's natural resources.

In an effort to curb the Dhofar insurgency, Sultan Qaboos expanded and re-equipped the armed forces and granted amnesty to all surrendered rebels while vigorously prosecuting the war in Dhofar. He obtained direct military support from the U.K., Iran, and Jordan. By early 1975, the guerrillas were confined to a 50 square kilometer (20-sq. mi.) area near the Yemen border and shortly thereafter were defeated. As the war drew to a close, civil action programs were given priority throughout Dhofar and helped win the allegiance of the people. The PFLO threat diminished further with the establishment of diplomatic relations in October 1983 between South Yemen and Oman, and South Yemen subsequently lessened propaganda and subversive activities against Oman. In late-1987, Oman opened an embassy in Aden, South Yemen, and appointed its first resident ambassador to the country.

Since his accession in 1970, Sultan Qaboos has balanced tribal, regional, and ethnic interests in composing the national administration. The Council of Ministers, which functions as a cabinet, consists of 26 ministers, all directly appointed by Qaboos. The Majlis Al-Shura's (Consultative Council) mandate is to review legislation pertaining to economic development and social services prior to its becoming law. The Majlis Al-Shura may request ministers to appear before it. In September 2000, about 100,000 Omani men and women elected 83 candidates, including two women, for seats in the Majlis Al-Shura. Further, in December 2000, Sultan Qaboos appointed the 48-member Majlis Al Dowla, or State Council, including five women, which acts as the upper chamber in Oman's bicameral representative body. In early 2003, Sultan Qaboos declared universal suffrage for the October 2003 Majlis al-Shura elections. Two women were elected to sit with 81 male colleagues in those elections, which were observed to be free and fair.

In November 1996, Sultan Qaboos presented his people with the "Basic Statutes of the State," Oman's first written "constitution." It guarantees various rights within the framework of Quranic and customary law. It partially resuscitated long dormant conflict-of-interest measures by banning cabinet ministers from being officers of public shareholding firms. Perhaps most importantly, the Basic Statutes provide rules for setting Sultan Qaboos' succession.

Oman is strategically located on the Strait of Hormuz, the entrance to the Gulf, 35 miles directly opposite Iran. Oman is concerned with regional stability and security, given tensions in the region, the proximity of Iran and Iraq, and the potential threat of political Islam. Oman maintained its diplomatic relations with Iraq throughout the Gulf War while supporting the UN allies by sending a contingent of troops to join coalition forces and by opening up to prepositioning of weapons and supplies. In addition, since 1980 Oman and the U.S. have been parties to a military cooperation agreement, which was revised and renewed in 2000. Oman also has long been an active participant in efforts to achieve Middle East peace.

Following the terrorist attacks on the United States in September 2001, the Omani Government at all levels pledged and provided impressive support to the U.S.-led coalition against terrorism. Oman is a signatory of most UN-sponsored anti-terrorism treaties.

GOVERNMENT AND POLITICAL CONDITIONS  
Sultan Qaboos bin Sa'id rules with the aid of his ministers. His dynasty, the Al Sa'id, was founded about 250 years ago by Imam Ahmed bin Sa'id. The sultan is a direct descendant of the l9th century ruler, Sa'id bin Sultan, who first opened relations with the United States in 1833. The Sultanate has neither political parties nor legislature, although the bicameral representative bodies provide the government with advice.

Oman's judicial system traditionally has been based on the Shari'a--the Koranic laws and the oral teachings of the Islamic Prophet Muhammad. Traditionally, Shari'a courts fell under the jurisdiction of the Ministry of Justice, Awqaf, and Islamic Affairs. Oman's first criminal code was not enacted until 1974. The current structure of the criminal court system was established in 1984 and consists of a magistrate court in the capital and four additional magistrate courts in Sohar, Sur, Salalah, and Nizwa. In the less-populated areas and among the nomadic bedouin, tribal custom often is the law.

Recent royal decrees have placed the entire court system--magistrates, commercial, shari'a and civil courts--under the control of the Ministry of Justice. An independent Office of the Public Prosecutor also has been created (formerly a part of the Royal Oman Police), and a supreme court is under formation. Regional court complexes are envisioned to house the various courts, including the courts of first instance for criminal cases and Shariah cases (family law and inheritance).

Administratively, the populated regions are divided into 59 districts (wilayats), presided over by governors (walis) responsible for settling local disputes, collecting taxes, and maintaining peace. Most wilayats are small; an exception is the wilayat of Dhofar, which comprises the whole province. The wali of Dhofar is an important government figure, holding cabinet rank, while other walis operate under the guidance of the Ministry of Interior.

In November 1991, Sultan Qaboos established the Majlis al--Shura (Consultative Council), which replaced the 10-year-old State Consultative Council, in an effort to systematize and broaden public participation in government. Representatives were chosen in the following manner: Local caucuses in each of the 59 districts sent forward the names of three nominees, whose credentials were reviewed by a cabinet committee. These names were then forwarded to the Sultan, who made the final selection. The Consultative Council serves as a conduit of information between the people and the government ministries. It is empowered to review drafts of economic and social legislation prepared by service ministries, such as communications and housing, and to provide recommendations. Service ministers also may be summoned before the Majlis to respond to representatives' questions. It has no authority in the areas of foreign affairs, defense, security, and finances.

Although Oman enjoys a high degree of internal stability, regional tensions in the aftermath of the Persian Gulf war and the Iran-Iraq war continue to necessitate large defense expenditures. In 2001, Oman budgeted $2.4 billion for defense--about 33% of its GDP. Oman maintains a small but professional and effective military, supplied mainly with British equipment in addition to items from the United States, France, and other countries. British officers, on loan or on contract to the Sultanate, help staff the armed forces, although a program of "Omanization" has steadily increased the proportion of Omani officers over the past several years.

After North and South Yemen merged in May 1990, Oman settled its border disputes with the new Republic of Yemen on October 1, 1992. The two neighbors have cooperative bilateral relations. Oman's borders with all neighbors are demarcated.

Principal Government Officials
Sultan, Prime Minister, and Minister of Defense, Foreign Affairs, and Finance--Qaboos bin Sa'id Al Said
Minister of Palace Office Affairs--Ali bin Majid Al-Ma'amari
Minister of State Responsible for Foreign Affairs--Yusuf bin Alawi bin Abdullah
Deputy Prime Minister for Financial and Economic Affairs--Ahmad bin Abd al Nabi al Makki
Deputy Prime Minister for Legal Affairs--Mohammed bin Ali bin Nasir al Alawi Deputy Prime Minister for Security and Defense--Badr bin Saud bin Harib al Busaidi
Ambassador to the United States--Mohamed Ali Al-Khusaiby
Permanent Representative to the UN--Fuad bin Mubarak al Hinai

Oman maintains an embassy in the United States at 2535 Belmont Rd. NW, Washington, DC 20008 (tel. 202/387-1980)

ECONOMY
When Oman declined as an entrepot for arms and slaves in the mid-19th century, much of its former prosperity was lost, and the economy turned almost exclusively to agriculture, camel and goat herding, fishing, and traditional handicrafts. Today, oil fuels the economy and revenues from petroleum products have enabled Oman's dramatic development over the past 30 years.

Oil was first discovered in the interior near Fahud in the western desert in 1964. Petroleum Development (Oman) Ltd. (PDO) began production in August 1967. The Omani Government owns 60% of PDO, and foreign interests own 40% (Royal Dutch Shell owns 34%; the remaining 6% is owned by Compagnie Francaise des Petroles [Total] and Partex). In 1976, Oman's oil production rose to 366,000 barrels per day (b/d) but declined gradually to about 285,000 b/d in late 1980 due to the depletion of recoverable reserves. From 1981 to 1986, Oman compensated for declining oil prices by increasing production levels to 600,000 b/d. With the collapse of oil prices in 1986, however, revenues dropped dramatically. Production was cut back temporarily in coordination with the Organization of Petroleum Exporting Countries (OPEC), and production levels again reached 600,000 b/d by mid-1987, which helped increase revenues. By 2000, production had climbed to more than 900,000 b/d, however it has declined to roughly 700,000 in 2003. . Oman is not a member of OPEC.

Natural gas reserves, which will increasingly provide the fuel for power generation and desalination, stand at 18 trillion cubic feet. An LNG processing plant located in Sur was opened in 2000, with production capacity of 6.6 million tons/YR, as well as unsubstantial gas liquids, including condensates.

Oman does not have the immense oil resources of some of its neighbors. Nevertheless, in recent years, it has found more oil than it has produced, and total proven reserves rose to more than 5 billion barrels by the mid-1990s. Oman's complex geology makes exploration and production an expensive challenge. Recent improvements in technology, however, have enhanced recovery.

Agriculture and fishing are the traditional way of life in Oman. Dates and limes, grown extensively in the Batinah coastal plain and the highlands, make up most of the country's agricultural exports. Coconut palms, wheat, and bananas also are grown, and cattle are raised in Dhofar. Other areas grow cereals and forage crops. Poultry production is steadily rising. Fish and shellfish exports totaled $34 million in 2000.

The government is undertaking many development projects to modernize the economy, improve the standard of living, and become a more active player in the global marketplace. Oman became a member of the World Trade Organization in October 2000, and continues to amend its financial and commercial practices to conform to international standards. Increases in agriculture and especially fish production are believed possible with the application of modern technology. The Muscat capital area has both an international airport at Seeb and a deepwater port at Mina Qaboos. The newly opened (1999), largescale modern container port at Salalah, capital of the Dhofar Governate, and a seaport at nearby Raysut were recently completed. A national road network includes a $400 million highway linking the northern and southern regions. In an effort to diversify the economy, in the early 1980s, the government built a $200-million copper mining and refining plant at Sohar. Other large industrial projects include an 80,000 b/d oil refinery and two cement factories. An industrial zone at Rusayl showcases the country's modest light industries. Marble, limestone, and gypsum may prove commercially viable in the future.

The Omani Government is implementing its sixth 5-year plan, launched in 2000, to reduce its dependence on oil and expatriate labor. The plan focuses on income diversification, job creation for Omanis in the private sector, and development of Oman's interior. Government programs offer soft loans and propose the building of new industrial estates in population centers outside the capital area. The government is giving greater emphasis to "Omanization" of the labor force, particularly in banking, hotels, and municipally sponsored shops benefiting from government subsidies. Currently, efforts are underway to liberalize investment opportunities in order to attract foreign capital.

Some of the largest budgetary outlays are in the areas of health services and basic education. The number of schools, hospitals, and clinics has risen exponentially since the accession of Sultan Qaboos in 1970.

U.S. firms face a small and highly competitive market dominated by trade with Japan and Britain and re-exports from the United Arab Emirates. The sale of U.S. products also is hampered by higher transportation costs and the lack of familiarity with Oman on the part of U.S. exporters. However, the traditional U.S. market in Oman, oil field supplies and services, should grow as the country's major oil producer continues a major expansion of fields and wells.

FOREIGN RELATIONS
When Sultan Qaboos assumed power in 1970, Oman had limited contacts with the outside world, including neighboring Arab states. Only two countries, the United Kingdom and India, maintained a diplomatic presence in the country. A special treaty relationship permitted the United Kingdom close involvement in Oman's civil and military affairs. Ties with the United Kingdom have remained very close under Sultan Qaboos.

Since 1970, Oman has pursued a moderate foreign policy and expanded its diplomatic relations dramatically. It supported the 1979 Camp David accords and was one of three Arab League states, along with Somalia and Sudan, which did not break relations with Egypt after the signing of the Egyptian-Israeli Peace Treaty in 1979. During the Persian Gulf crisis, Oman assisted the UN coalition effort. Oman has developed close ties to its neighbors; it joined the six-member Gulf Cooperation Council when it was established in 1980.

Oman has traditionally supported Middle East peace initiatives, as it did those in 1983. In April 1994, Oman hosted the plenary meeting of the Water Working Group of the peace process, the first Gulf state to do so. From 1996-2000, Oman and Israel exchanged trade offices. Oman closed the Israeli Trade Office in October 2000 in the wake of public demonstrations against Israel during the intifada.

During the Cold War period, Oman avoided relations with communist countries because of the communist support for the insurgency in Dhofar. In recent years, Oman has undertaken diplomatic initiatives in the Central Asian republics, particularly in Kazakhstan, where it is involved in a joint oil pipeline project. In addition, Oman maintains good relations with Iran, its northern neighbor, and the two countries regularly exchange delegations. Oman is an active member in international and regional organizations, notably the Arab League and the GCC.

U.S.-OMANI RELATIONS
The United States has maintained relations with the Sultanate since the early years of American independence. A treaty of friendship and navigation, one of the first agreements of its kind with an Arab state, was concluded between the United States and Muscat in 1833. This treaty was replaced by the Treaty of Amity, Economic Relations, and Consular Rights signed at Salalah on December 20, 1958.

A U.S. consulate was maintained in Muscat from 1880 until 1915. Thereafter, U.S. interests in Oman were handled by U.S. diplomats resident in other countries. In 1972, the U.S. ambassador in Kuwait was accredited also as the first U.S. ambassador to Oman, and the U.S. embassy, headed by a resident charge d'affaires, was opened. The first resident U.S. ambassador took up his post in July 1974. The Oman embassy was opened in Washington, DC, in 1973.

U.S.-Omani relations were deepened in 1980 by the conclusion of two important agreements. One provided access to Omani military facilities by U.S. forces under agreed-upon conditions. The other agreement established a Joint Commission for Economic and Technical Cooperation, located in Muscat, to provide U.S. economic assistance to Oman. The Joint Commission continued in existence until the mid-1990s. A Peace Corps program, which assisted Oman mainly in the fields of health and education, was initiated in 1973 and phased out in 1983. A team from the Federal Aviation Administration worked with Oman's Civil Aviation Department on a reimbursable basis but was phased out in 1992.

In 1974 and April 1983, Sultan Qaboos made state visits to the United States. Vice President George H. Bush visited Oman in 1984 and 1986, and President Clinton visited briefly in March 2000.

Principal U.S. Officials
Deputy Chief of Mission--Robert W. Dry
Chief, Political/Economic Section—Michael Snowden
Economic/Commercial Officer—Kevin Skillin
Public Affairs Officer--Tanya Anderson

The international mailing address of the U.S. Embassy in Oman is:
P.O. Box 202, Postal Code No. 115, Muscat, Sultanate of Oman.

The APO address is:
American Embassy, Muscat
General
APO AE 09890
Tel: (011) (968) 698-989, 699-094. FAX: (011)(968) 604-316. [END]

For the most current version of this Note, see Background Notes A-Z.



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