Clear heads prevail at summit in Oman

Muscat yesterday morning was calm, the topiary beautifully clipped, the sunshine glinting on the waves of the Indian Ocean.

That's not unusual, but events of the past few months should give the locals enough to chat about for the next 20 years.

Talking points include the protests in Sohar, dissent in the public and private sectors, with even a walkout by employees in hotels such as the Shangri-La, InterContinental and Crowne Plaza.

The waiters are back on duty at the Shangri-La but tourists are fewer than might be expected at this time of the year. Apparently even holidaymakers read newspapers or watch the television.

It might seem an unfortunate time to host an Oman Business and Investment Summit, but at least 50 people were at Muscat's Grand Hyatt, wondering whether such protests were a one-off or part of something larger.

Sridhar Sridharan, the managing partner at Ernst & Young in Oman said: "It should have no impact on business."

Anwar Ali Sultan, the director of WJ Towell, a trading company that has been active for more than 150 years, says any unrest was sorted out in a "very short time".

"What happened was healthy for the future," Mr Sultan adds. "It is a pity it happened but was swiftly controlled by the government."

In the past few weeks the sultan of Oman has dismissed his cabinet, including key posts such as the ministers of national economy, commerce and industry, royal office and the diwan of the royal court, and replaced them.

He has given the public prosecutor more independence and authority, introduced unemployment benefit of 150 rials (Dh1,431) a month, raised the minimum wage to 200 rials, given students 1,000 rials each and teachers 3,000 rials.

"The cost of these measures will be about US$1.3 billion [Dh4.77bn] a year," says Ravneet Chowdhury, the chief executive of Standard Chartered in Oman. "But the GCC fund is giving $1bn a year for 10 years, so this will offset most of the costs."

Behind the unrest is a common dilemma - something facing governments from America to Portugal and beyond: jobs, or rather the lack of them. Every year about 30,000 to 50,000 Omanis enter the job market and there are just not enough opportunities to go around.

Mohammed al Said, the chief executive of IBD, an oil and gas services company, says while the government acted "swiftly and precisely" to defuse the situation, there is still a challenge ahead.

"The issue is the youth and lack of jobs," Mr al Said says. "The government did not do enough before. Now it might. What happened was like a pressure cooker. The steam has come out but it has not been extinguished."

Unusually in the Gulf, there are trade unions in many companies that are now negotiating on behalf of their workers for better conditions.

"I think there was an ignorance of their basic rights," adds Mr al Said. "They are now negotiating but some are making unreasonable demands. They want a magic wand to create jobs."

Oman's ruler has announced the creation of an additional 50,000 jobs in the public sector, including the police force and the army. Further growth will need to come from the private sector.

"Who is investing in Oman?" asks Ewan Stirling, the chief executive of HSBC in Oman. "The United Kingdom is still number one, but the UAE is second, with China and India closing fast.

"There are significant opportunities but in the Oman way, which means steadily and progressively."

Pumping all this money into a small economy is likely to be inflationary. Officially, inflation was 4 per cent last year, although bankers say the real figure was probably higher. In 2009 it was probably double that.

With fuel, electricity and water all controlled, and rents coming down, it may be possible for the government to put a lid on it, especially as they are being strict on preventing traders or shops from raising their prices. One problem is that most of the food is imported.

Teng Theng Dar, the Singapore ambassador to Oman, was the most optimistic person in the room. He sees a "tremendous opportunity" in the country, with the "fundamentals unchanged".

"I have good confidence about Oman," he says. "It has connections to Africa and the GCC countries. The opportunities are plentiful and it has a young workforce."

He compares Oman to Singapore, adding "you need to be comfortable to invest there too". Then he hands out his card to a couple of businessmen and races off for his next rendezvous.

rwright@thenational.ae