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Ready for a new role.

An ongoing diversification of the economy, plus new challenges in foreign affairs, have made Oman into an increasingly important player in the region. In an exclusive interview with The Middle East, Sultan Qabus bin Said offers a personal analysis of Oman's economic and political future.

One of the principle aims of Oman's development strategy is economic diversification and the creation of an educated and skilled workforce to take full advantage of wider opportunities. But the population is growing by 3% a year, half of all Omanis are under 18 and the number of expatriate workers is still growing. How does the government plan to make a success of "Omanisation"?

I see no future difficulty in implementing our Omanisation programme. Currently, it is being encouragingly and successfully pursued. First, although there has been a notable increase in population growth over the past years - a factor which has inevitably followed the comprehensive development of the National Health Service, and I agree that this increase is considerably reflected in the youth of our population, the broadening of the base of our economy which is opening up an increasingly wider spectrum of job opportunities is keeping pace with the growing indigenous workforce, and I am satisfied that this "balance" will be satisfactorily preserved into the foreseeable future.

You mention an increasing number of expatriates: broadly speaking there are two elements of this class in the national workforce: the foreign specialist and the worker who carries out the less intellectually demanding tasks that are to hand. The first element is a declining one as our young men and women emerge from the advanced educational establishments here.

With the increasingly high level of qualifications being achieved by our young people, they are being rapidly absorbed into the more intellectual specialist roles.

The second element will certainly be needed for a long time to come. I believe that what I have just said will illustrate that, in general employment availability terms, there is a considerable degree of "fat" which will easily absorb any unforseen increased Omani output into the job market.

Oil still accounts for almost half gross domestic product, while a large proportion of other economic activity relies indirectly on the oil sector. Estimates of the life expectancy of oil reserves varies enormously, from two decades to almost a century. What is Oman's strategy for developing the hydrocarbons sector to make the best value-added use of resources while they last and lay the foundation for a post-oil economy?

As you already know, an economic diversification plan has long been developed in Oman. The range of these non-oil related products is now very large indeed, as our industrial areas show. Plans are in hand to triple these industrial areas. Nearly all these industries are now export orientated, while their products are making a notable cut in our import expenditure. This aspect of our economy shows no signs of flagging and indeed continues to be a very healthy prospect for the future of this country.

We are frequently asked to estimate the life expectancy of Oman's oil reserves, and the fact is that it is quite impossible to give an accurate prediction. New oil reserves have been constantly found and there is no reason to suppose that more - possibly including offshore - will not come in.

At the moment our oil reserves are now greater than when our industry first started, comfortably sustaining a production rate of 750,000 barrels a day which, at current prices, is satisfactory. However, it is certainly prudent for any oil-producing country which is largely dependent on that resource to plan for a future where that prime source of income may dwindle or vanish.

In our case, in addition to the economic diversification I have described to you, we are pursuing an additional strategy which has already achieved great success. This is our entry into the international oil and mineral market where our expertness in exploration, exploitation and marketing is being made available to other oil producers, some of whom like those in eastern Europe, have a considerable task in overtaking sophisticated Western practices.

For instance, we have recently reached an agreement with Kazakhstan by which Oman is to have a 50% share in a huge project for the construction of an important pipeline from its oilfields.

We are also participating in the construction and operation of a refinery in India, and a pipeline to the west coast of that country, in addition to several other international projects.

One of the major constraints on economic development is the availability of water. The scarcity of water resources is an age old problem, but agriculture already consumes about 90% of supplies and rapid industrial growth will create further pressing demand. How will Oman ensure that development is not critically hampered by water shortages?

I have often described water as a vastly more vital life-source for Oman than oil. Some years ago there was a seriously emerging danger that the demands of our national development, increase of population and so on, would outstrip our available water supplies. To counteract this, an appropriate government organisation has been set up to ensure the close monitoring and strict control of this resource.

The water you see being used for the irrigation of our parks and other beautification schemes is all recycled and therefore makes no drain on the basic availability of supplies.

Your suggestion that agriculture consumes about 90% of supplies, is I think, too high, but it certainly is a major source of water expenditure. But agriculture is a consumer whose demands can be curtailed if necessary, should these demands become threateningly high - they have not done so far and indeed we have been enabled to pursue our policy of making Oman agriculturally self supporting in the not too distant future without being profligate.

The steps we are taking for conservation and increase of supplies are, I believe, appropriate: a large number of re-charge dams have been constructed to ensure that the rain water which frequently falls in our mountainous area is not lost but is conserved as a replenishment for the water table of the fertile Batinah coast, and plans are in hand for the construction of another desalination plant in addition to the one that has been established at Ghubra.

Since the signing of the border agreement last year, Oman has been making a particular effort to develop its ties with Yemen. Since Yemen is the only country in the Arabian peninsula which is not a member of the Gulf Cooperation Council, would it be fair to say that Oman is using its growing special relationship with Sanaa to integrate Yemen more closely into the Arab Gulf community of states?

I am very pleased at the way in which our relations with the Republic of Yemen have been normalised and have continued to develop. I believe our Arab community of nations should constantly seek ways of drawing together and cooperating with each other as a powerful factor for world peace and the advancement of humanity. This is our continuing policy and it most certainly applies to our relationship with all brother Arab states.

The new administration in Washington has provided hints in recent months of greater flexibility towards Iraq. Oman has always shown a keen interest in mediating disputes in the Gulf region and enhancing mutual security. What, in Your Majesty's opinion, should Iraq do now to improve relations with (a) the Gulf countries, (b) the rest of the Arab world, and (c) the international community?

The answer to this question is something that only Iraq can decide in the light of its own interests and, I trust, in the interests of our Arab family of nations. As you are already aware, it has always been my policy to work for the development of friendly relations between the states and peoples of the world, and the outlawing of war and conflict which, over all the centuries has been amply demonstrated as bringing only immense suffering and destruction to mankind.

You mention our taking a keen interest in mediation; certainly, Oman will always stand ready to help in the settlement of a dispute that may arise on the international scene, if it can make a positive contribution and - most importantly - if it is asked to do so.

I stress this latter point since non-interference in other countries affairs is fundamental to our foreign policies.
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Title Annotation:Special Report; interview with Omani Sultan Qaboos bin Said
Publication:The Middle East
Article Type:Interview
Date:Nov 1, 1993
Words:1396
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