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After Qaboos

The sultan hasn't picked a successor, creating uncertainties just when the country needs to perk up its economy and find jobs for its youth

An advertisement for Oman Air beside the road close to Muscat airport shows a smiling portrait of Sultan Qaboos, with the slogan below: "Steering the nation, even higher". Qaboos has been steering his nation, single-handedly, since 1970 and his influence on the country is so overwhelming (he occupies all the key posts in cabinet) that Omanis cannot imagine a future without him. While lengthy spells of medical treatment abroad appear to have been successful, the inevitable will arrive when the country has to contemplate a new era.

The succession process will involve first a meeting of a family council, and later, if there is no agreement on a successor, the opening of a sealed letter containing the names of two people, in order of preference, written by Qaboos himself. What concerns Omanis is not so much the process but the outcome: who will be able to step into the shoes of a leader so intimately entwined with the unification and modernisation of the nation?

The sultan's decision not to announce a successor is apparently intended to keep potential contenders on their toes and prevent the emergence of a power base below him. The effect, though, has been to stop potential leaders of the country (who must be members of the ruling family) becoming known by the public. While the choice of the next sultan can only be the subject of speculation, many Omanis believe that a son of his uncle, probably Saad bin Tariq, in his sixties with senior military experience and a personal representative of the sultan, is a front runner.

Of more immediate concern to Omanis is the economy, which is suffering from the effects of prolonged low oil prices. While the recent relative price recovery has brought some comfort, the country faces another difficult year ahead. This year's budget, based on an oil price of $45 a barrel, envisages a deficit of OR3bn ($7.8bn), with OR2.1bn being covered by international borrowing.

The effects will be widely felt. "Due to financial pressures caused by public salaries," the government's budget statement warned, "openings for new jobs in the public sector will be limited." The head of Oman's Society of Contractors, Shahswar al-Balushi, told reporters that "economic conditions are still bad. Salaries continue to be delayed. Projects are facing trouble due to delayed bill clearance."

The Omani government faces two long-term tasks: to lessen the dependence on oil and gas; and find jobs for young people. Youth unemployment is running at around 20%. The development of tourism is providing a useful source of non-oil revenue, and leading to a boom in hotel construction. But the latest figures show hotel occupancy in slight decline, reflecting economic conditions elsewhere in the world. The Omanis are also aware, having watched developments in Egypt, Tunisia and Turkey, of how vulnerable tourism can be to even a single act of terrorism.

The encouragement of tourism is part of Tanfeedh, a national programme to promote economic diversification, which was launched in September 2016 as part of the 9th five-year development plan (2016-20). Aside from tourism, the scheme aims to target manufacturing, transport, logistics, mining and fisheries—"increasing investment in these sectors, and creating more job opportunities".

All these schemes would benefit from greater foreign investment, which in turn would be more forthcoming if the sultanate encouraged the establishment of a strong and transparent financial sector, along the lines of that in Saudi Arabia, which could be more connected to its global counterparts. For Oman remains a rare example of a stable Arab state, and one that commands the respects of other states in the region for its independent spirit—in developing domestically along its own lines and encouraging good neighbourly relations.

Oman's strong links with Iran, for example, enabled it to host talks between Tehran and Washington on the nuclear issue, and put it in a unique position to broker talks between the Yemeni government and the Iranian-back Houthis. The construction of a gas pipeline from Iran to Oman, the first cross-Gulf energy project, would be a bold move at a time when GCC-Iran relations are at a low point, providing further proof of the sultanate's individualism.

Maintaining this delicate balancing act in the region, while dealing with a range of domestic economic problems, will be high on the to-do list of whoever eventually takes over from the man who has personally steered Oman to the place it is today.

Straightened times: Oman's strategic location makes its politics globally significant

 This article is part of a report series on Oman. Next article: Oman's greenhouses to grow oil

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