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Oman has huge economic potential, says Atlantic Council's Jon Huntsman
Diplomatic Pouch / December 18, 2014

By Larry Luxner

The Sultanate of Oman is a “gorgeous” yet frequently overlooked country that shines as a beacon of stability in the turbulent Middle East, says former Utah governor and one-time presidential hopeful Jon Huntsman Jr.

The highly respected politician, businessman and diplomat, who among other things served as U.S. ambassador to China from 2009 to 2011, spoke Dec. 4 at the Omani Scholarly Symposium — an all-day event held at Washington’s Willard InterContinental Hotel and organized by the Embassy of Oman.

As the 200 or so people attending the symposium enjoyed their Greek salad, filet mignon, jumbo crab cake and bittersweet chocolate crunch bombe dessert, Huntsman delved into a bit of history. He reminded his audience that in September 1790, the American vessel Boston Rambler called on Muscat, Oman’s capital. Forty-three years later, the United States and Oman signed a “Treaty of Commerce and Amity,” marking the first bilateral accord between Washington and any Gulf country.

“In 1840, the Sultanah arrived in New York” carrying Ahmad bin Na’aman — the first Arab diplomat to be accredited to the United States, said Huntsman. And another important milestone was achieved in 2006, with the signing of a free-trade agreement between Washington and Muscat that took effect five years ago.

“As the U.S.-Oman commercial relationship enters its third century, the best may be yet to come,” he continued. “Oman, like the rest of us, faces economic challenges which require sound strategy, good governance and effective planning. We can provide assistance, and indeed we must agree that it is in our national interest to do so.”

Huntsman, 54, praised Oman’s ambassador to the United States, Hunaina Sultan Ahmed Al-Mughairy, as a “superstar” and said he’s known her since serving as governor of Utah from 2005 to 2009.

A self-described “center-right conservative,” Huntsman left his ambassadorship in Beijing to seek the 2012 Republican presidential nomination. But he dropped out after finishing third in the New Hampshire primary. In January 2014, he became chairman of the Atlantic Council, an influential Washington-based think tank.

Huntsman, a Mormon, praised the overwhelmingly Muslim desert sultanate of 3.6 million for having come so far in such a short time.

“When Sultan Qaboos became leader of Oman in 1970, he inherited a heavily underdeveloped country from his father. Oman had only six miles of paved roads, and three schools with 900 students,” he said. “Today there’s around 5,000 miles of paved roads and half a million registered students scattered in 1,000 schools. Oman has one of the most respectable literacy rates and women’s rights records in the Arab world.”

Yet Oman’s biggest challenge, he said, is diversifying its economy and ending the country’s economic dependence on energy.

“The Omani leadership understands this very well. Almost 50 percent of Oman’s GDP is from oil and gas. It ranks 21st in the world in oil revenues, but it’s likely to run out of oil in the next decade,” he warned. Nevertheless, petroleum production reached 945,000 barrels per day in 2013, and 97 percent of Oman’s oil exports went to Asian countries — with China buying nearly 60 percent of the total.

Oman also has the world’s 26th largest proven gas reserves, estimated in 2010 at around 849.5 billion cubic meters.

“Last year, natural gas accounted for about 80 percent of the country’s electricity generation,” said Huntsman. “But for Oman’s domestic energy needs, solar and wind power are the future. Oman’s location on the southeastern corner of the Arabian Peninsula — positioned like few other countries in the world — suggests that Oman is ideally situated geographically to utilize renewable energy resources.”

Even so, there’s no denying that Oman has some very unstable neighbors. Two days after Huntsman’s speech, al-Qaeda terrorists murdered an American journalist held hostage in neighboring Yemen during a failed attempt by Navy SEALs to rescue him.

Huntsman praised Oman for its “low-profile” role in mediating various Middle East conflicts — ranging from maintaining open channels of communication with Israel through the years, to securing the release of three U.S. backpackers held by Iran in 2011.

But the politician’s main focus at the Omani Symposium was economics, and what he called the huge potential of a country that’s 1.4 times the size of his native Utah and with only a few hundred thousand more inhabitants than the Beehive State.

“Oman has a small population, so the emphasis is on trade and serving as a gateway to an Asian market of two billion consumers — and in the future, to a market of 80 million in Iran,” he said. Huntsman added that the Indian Ocean port of Salalah — located more than 1,000 kilometers southwest of Muscat, Oman’s capital city — is destined to become one of the world’s most important container terminals.

“While the UAE always comes to mind as a successful diversification story in the region, Oman can be a stabilizing force in the Gulf,” he said, estimating that Oman has attracted $16 billion in overall investment in ports, free zones, transport networks and infrastructure. “By attracting a variety of investments and developing human resources, Oman can become a regional center for manufacturing, IT and entrepreneurship.”

But tourism shouldn’t be an afterthought, he said — even though Oman has none of the glitz or glamour of nearby Dubai, Abu Dhabi or Qatar.

“This is a gorgeous country. The problem is, not enough Americans know about Oman. Tourism contributions have been modest, but that can change with more aggressive promotion,” he said. “I commend the Omani Embassy and the country’s leadership in Muscat for realizing the economic potential of tourism.”

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