The MED This Week newsletter provides expert analysis and informed insights on the most significant developments in the MENA region, bringing together unique opinions on the topic and reliable foresight on future scenarios. Today, we focus on Oman, where a week of public demonstrations has posed the first significant challenge to Omani authorities since the new Sultan, Haitham bin Tariq Al Said, succeeded Qaboos in early 2020.
Compared to its turbulent neighbours of the Arabian Peninsula, Oman is traditionally considered as a relatively stable presence in an otherwise volatile environment and as a reliable partner for mediation in the Gulf. In late May, this robust image was interrupted when large numbers of Omani people took to the streets to protest against poverty and unemployment. Originated in the northern coastal city of Sohar on May 23rd 2021, turmoil rapidly spread in several towns and cities across the country. The protesters — the majority of whom are young and women — demand socio-political reforms, better job opportunities, the eradication of corruption, and the enhancement of their living conditions. Although the demonstrations were brought under control relatively quickly and by June 2nd most of those arrested had been released, there is no doubt that this wave of unrest has posed the most significant challenge so far to the new ruler, Sultan Haitham bin Tariq al Said, who acceded to the throne in January 2020. Furthermore, it has also shed light on many of the Omani socio-economic system’s underlying structural weaknesses and vulnerabilities, previously exacerbated by the compound shocks of the global pandemic and the drop in oil prices. In fact, the protests erupted last month in the aftermath of the introduction of a value-added tax (VAT), the first of this kind in Oman, as part of a series of reforms to ensure the sultanate’s financial sustainability. Against this backdrop, Sultan Haitham has ordered the government to accelerate plans to create 32,000 new jobs in the public sector and encourage private companies to appoint Omanis instead of foreign staff. Nonetheless, the government’s plans to diversify revenues away from oil and reduce spending on its bloated public sector have been lagging, and the dissent suggests Oman may be struggling to contain state deficits and impose austerity measures.
Experts from the ISPI MED network react to the wave of protests that shook Oman.
Muscat’s Economic Stability as a Precondition for its Diplomatic Role
“Economic stability remains a top domestic priority for Oman. Between a bailout package from GCC states considered a year ago to the recent protests in Salalah, Oman’s economic reforms have yet to be applied effectively or, at least, evenly. Oman’s high Foreign Direct Investment (FDI) inflows, relative to other Gulf countries, are vital in keeping its economy competitive. Besides realising Oman Vision 2040, investments from Muscat’s neighbours are crucial for its resilience – a subject broached in the latest meeting between Saudi and Omani officials. With stability on the economic front, Oman can then retain an independent foreign policy with regional implications, including the Yemeni crisis wherein Muscat can help Riyadh disentangle itself from the scene.”
Clemens Chay, Research Fellow, National University of Singapore, Middle East Institute (MEI)
A Decade Later, Unemployment is still Oman’s Crux
“The recent protests in Oman share a number of similarities with the 2011 uprisings, especially as regards the initial motivation that triggered the protests, that is, the lack of job opportunities that pushed many young people to take to the streets to demand employment. Unemployment and social grievances were the main motivator then as they are now, though the 2011 protests occurred in a different context — the Arab Spring — which then spilled over onto political reform demands as well, while the recent uprisings seem to be short in political demands. Additionally, the 2011 unrest included many people from different social backgrounds, while the recent movement has been mainly limited to job seekers and unemployed youth, whose demands have not gone far beyond the realm of unemployment. Lastly, the 2011 protests were much more widespread across Oman, while the more recent ones have been fairly concentrated in coastal towns due to their large populations.”
Abdullah Baabood, Visiting Professor, Waseda University
An Alarm for Stability in Muscat
“In contrast to the 2011 protests, which echoed uprisings in other Arab countries, the 2021 protests were intrinsic and in response to deteriorating economic conditions, particularly unemployment among young people. Since Sultan Haitham ascended to power in January 2020, the Omani people have been eagerly waiting for royal decrees and/or government decisions that could make significant economic reforms and absorb many of the unemployed Omanis. Although there have been recent regulations of Omanization in jobs in the private sector, there are many companies that have not complied with these regulations according to many Omanis. While the protests started in Sahar, on Oman’s northern coast, the demonstrations have spread to other parts of the country, sounding the alarm bell for stability in this Gulf state.”
Nabeel Nowairah, Independent Analyst and Commentator
Uneven Economic Reform and Simmering Tensions
“Renewed socioeconomic grievances in Oman are symptomatic of the uneven, non-linear nature of the country’s economic reforms. Without a sharp economic rebound in 2021 and 2022, the emergence of new taxes, fees, subsidy reductions, or other austerity measures will further stoke simmering tensions. Higher oil prices and the ability to access capital markets through bond offerings provide Omani policymakers with some short-term manoeuvrability to address immediate fiscal needs. However, looming external debt maturities and the growing need to absorb Omani jobseekers into the private sector pose more vexing challenges over the longer term. Oman’s government will likely pursue various halfway measures, such as restructuring debt or subsidizing private-sector positions, amid this constrained fiscal environment.”
Robert Mogielnicki, Senior Resident Scholar, The Arab Gulf State institute
Old Protests and Policies in Oman: The Army as Welfare Tool
“Oman’s protests are resurfacing, but the government is still unable to provide convincing solutions to unemployment. As economic diversification requires time to generate post-oil wealth, the Sultan can only recur to quick and old policies to quell popular discontent: first of all, this includes recruitment in the defense sector for jobless Omanis. But the Sultanate doesn’t need more soldiers while its military spending is estimated at 10.9% of its 2020 GDP. This emergency choice also contradicts the government’s rationalisation strategy: defence and security spending would have been reduced by 9% in 2020 according to the 2021 budget. The recruitment moves echo traditional views of the military as a welfare and national cohesion tool. But it may not be enough to cope with post-Qaboos’ challenges.”
Eleonora Ardemagni, Associate Research Fellow, ISPI
Oman’s Government Should Listen to its “Nation’s Wealth”
“Oman’s government must make tough decisions around whether to listen to its youth and make economic and political reforms or continue to ignore the loud voices, which have been raised since 2011, of the young men and women demanding jobs, the fight against corruption, and the end of the alliance between government officials and powerful businesses who put self-interest before public interests. Omanis stressed that empowering A’ Shura elected council with parliamentarian tools to monitor the government’s performance and legislate is necessary for successful reform process. The time is ripe for Oman’s government to react to youth demands and be transparent about its next steps and plans. Engaging people, local, and national experts’ perspectives in the process would be a great asset along with a new sultan and a new government in place.”
Rafiah Al Talei, Contributing Editor, Middle East Program, Carnegie Endowment for International Peace