‘Monitoring the situation’: The head of Oman quickly calms down protests in Business and Economic News

Oman is traditionally considered a stable pole in a volatile region, but recent protests have raised a number of naked issues facing the Gulf Coast country on the southeastern coast of the Arabian Peninsula.

The uproar was played out last month ending with demonstrations in various cities. Speculation is growing about what lies behind the Omandars ’frustration and what can be fixed.

Ten years ago, the Sultanate of Oman underwent an Arab Spring, which changed the landscape of the region and ended several regimes. Unlike in Tunisia, Egypt, or Libya, however, the demonstrators in Oman demanded mostly political reforms, not the departure of the Sultan.

At that time, Qaboos bin Said compelled Sultan Al Said and he promised several political reforms. These include the creation of 50,000 new jobs in the public service, welfare programs for the unemployed and salary increases for civil servants.

Local demonstrations were brought under control fairly quickly, although they were not completely disrupted, said James Worrall, an associate professor of International Relations and Middle East Studies at the University of Leeds.

It has been revealed that Qaboos ’reforms only managed to temporarily manage the country’s affairs, without definitively resolving them.

“Since 2011 there have been small-scale protests throughout the Sultanate, largely under the radar,” Worrall told Al Jazeera.

‘Twin Blows’

The COVID-19 pandemic and falling oil prices exposed the weaknesses of the Omani economic system, which accounts for more than 60% of oil and natural gas, Yasmina Abouzzohour, a visitor to the Brookings Institution, told Al Jazeera.

“Oman’s economy – which was already struggling before 2019 due to its dependence on hydrocarbons and high debt levels – has worsened as a result of the global pandemic and falling oil prices,” he said.

As a result, economic production fell by 6.4% the national budget was expanded 17.3 per cent of gross domestic product (GDP) since the reforms were first implemented. Within a year, the country’s deficit rose from 60 to 81 percent of GDP in 2019.

Meanwhile, it is also the economic underdevelopment of the country led to an increase in outsourcingespecially among young people, it has an unemployment rate of 10 percent.

Here, the coronavirus catastrophe has added new dynamics at the individual level, Worrall said.

“The pandemic has added an element of pressure that has hit the economy quite hard and, of course, caused people to come together, get bored and frustrated – the latter element is important.”

Sultan Qaboos died in January 2020, and left the successor Sultan Haitham bin Tariq Al Said challenging situations. However, the change in leadership could be to the benefit of the country, Worrall said.

“It’s clear that there are a lot of similarities, and that’s important, but we’ve also seen some interesting differences. Haitham is clear that he has more energy. There’s been a lot of activity at the end of the Qaboos era. Things slowed down naturally and some difficult decisions were not made,” he said. .

These difficult decisions, which were delayed by Qaboos, were left to Haiti because of the economic downturn that Oman has experienced and had no choice but to make fiscal adjustments.

‘Renter’s response’

Haitham ordered the authorities to reduce the budget by 10%. In fact, it is an administrative apparatus that has been explicitly expanded in recent decades to provide work for as many people as possible.

Oman’s administrative bureaucracy now devours nearly three-quarters of its revenue from the oil sector. He too it has imposed a five-percent value-added tax (VAT) and, from 2022, income tax for high-income earners.

In addition, the government has reduced subsidies, made early retirement, and set lower wages for new hires.

The resurgence of people’s frustration is not surprising, and the renewed protests are the result of recurring economic difficulties, Abouzzohor said.

“It was caused by economic complaints, especially unemployment and layoffs,” he said.

Among other moves, Haitham announced a set of measures designed to create 32,000 jobs in the public and private sectors and provide additional social benefits.

“The response to protests to the creation of new government jobs – many of them interesting on a temporary basis – and the reporting of private sector employment reforms seem to be the usual response to rent, but it contains messages about the longer-term nature of the direction of economic reform.” has made an assessment of the area.

As current protests could cause immediate economic concerns for the government, it could damage investor confidence as Oman constantly seeks foreign direct investment and seeks to stimulate critical sectors such as tourism, controlling the situation is essential for the Sultan’s view. .

Fortunately, protests are unlikely to open up for him, Abouzzohor said.

“It’s very difficult to escalate those protests. First, there were small incidents with hundreds of protesters. Second, Sultan Haitham has moved quickly to sustain them, promising to create government and private sector jobs, as well as a six-month paycheck to the Omani people who became unemployed as a result of the pandemic. “

Moreover, there were much larger protests against unemployment and inflation in 2018 and 2019, and in the end it was similar to what Sultan Qaboos was. There is no reason to suspect that these last smaller-scale seats would end up differently, Abouzzohor said.

Worrall agreed, noting that the government has shown a tendency to escalate rather than exacerbate the situation.

“Nothing can be completely ruled out, but yes the probability [of protest escalation] it is minimal. In fact, it would be difficult to unite a real coalition. The government remains sensitive and shows that it cares about its people. The pandemic situation makes people understand the pressures and see that they have similar issues anywhere else, ”Worrall said.

“The government continues the dialogue and shows a willingness to respond to people’s concerns as best they can.”

“Decentralization of Power”

Politically, however, it is questionable whether Oman should be a political liberalization of reforms. Worrall argues that while the first indications are beneficial, it cannot yet be fully assessed that the Sultan’s modus operandi is progressing.

“It’s important not to think that political liberalization is something that looks like a Western model, but it’s clear that the direction of travel in Haitham is to involve more people. We really couldn’t see its interaction with the population well because of COVID restrictions, but decentralization of power it seems a kind of political liberalization.

“More decisions will be made at the grassroots level, but it’s clear that there are other elements at stake here as well, and it’s a balancing act. For example, Majlis A’Shura [legislative body] it has recently acquired some interesting new powers, but at the same time changed or removed others, ”Worrall said.

However, even without immediately liberalizing the country on the agenda, the sultan will have a job to do.

According to Abouzzohore, the priorities are clear.

“The Sultan will focus on improving economic conditions, promoting tourism after controlling the outbreak and moving the economy away from hydrocarbons,” he said.

Despite the great challenge, the Sultan has the means to overcome the crisis, Worrall added.

“The situation is certainly uncertain, but Haitham has a variety of tools at its disposal and is able to help the people around it. , ”Worrall said.

While the current Sultan and his predecessors shared “many similarities,” there are still differences that could change the country’s dynamics, Worrall said.

“The fascinating dimension is that Haitham seems ready to delegate power, both within and outside the royal family. The divestment of key roles played by Qaboos is an important development, as is the acceleration of decentralization programs and activities.”

Worrall concluded: “The will to reform and restructure is a new man who wants to make his mark, but also someone who can make decisions quickly, and who knows that given the economic situation is short-lived.”