Oman (12/94)

For the most current version of this Note, see Background Notes A-Z.


Official Name:
Sultanate of Oman

Area: 212,457 sq. km. (82,030 sq. mi.); about the size of Colorado. It is bordered on the north by the United Arab Emirates (U.A.E.), on the northwest by Saudi Arabia, and on the southwest by the Republic of Yemen. The Omani coastline stretches 2,092 km.
Cities: Capital--Muscat. Other cities--Matrah, Ruwi, Nizwa, Salalah, Sohar.
Terrain: Mountains, plains, and arid plateau.
Climate: Hot, humid along the coast; hot, dry in the interior; summer monsoon in far south.

Nationality: Noun--Oman. Adjective--Omani.
Population: 1.6 million (1993).
Annual growth rate: 3.6% (est.).
Ethnic groups: Arab, Baluchi, East African (Zanzabari), South Asian (Indian, Pakistani, Bangladeshi).
Religions: Ibadhi and Sunni Muslim: 95%, Shia Muslim, Hindu.
Languages: Arabic (official), English, Baluchi, Urdu, Hindi and Indian dialects.
Education: Literacy--41% ( est.).
Health: Infant mortality rate (est.)--33/1,000. Life expectancy --66 years.
Work force: 750,000. Agriculture and fishing--50%.

Type: Monarchy.
Constitution: none.
Branches: Executive--sultan. Legislative--Majlis Ash-Shura (Consultative Council). Judicial--civil courts handle criminal cases; Shari'a (Islamic law) courts oversee family law.
Political parties: None.
Suffrage: None.
Administrative subdivisions: eight administrative regions: Muscat, Al-Batinah, Musandam, A'Dhahirah, A'Dakhliya, A'Shariqiya, Al Wusta, Dhofar Governorate. There are 59 districts (wilayats).

GDP (1992): $11.6 billion.
Per capita GDP: $5,800.
Natural resources: Oil, natural gas, copper, marble, limestone, gypsum, chromium. Agriculture and fisheries: (3.66% of GDP).
Agriculture: Products--dates, limes, bananas, mangoes, alfalfa, other fruits and vegetables. Fisheries--Kingfish, tuna, other fish, shrimp, lobster, abalone.
Industry: Types--crude petroleum over 750,000 b/d; construction, petroleum refinery, copper mines and smelter, cement and various light industries.
Trade (1992): Exports--$5.5 billion. Oil--83%. Major markets--Japan (35%), South Korea (21%), Singapore (7%), U.S. (6%), Taiwan (4%). Imports--$3.6 billion: machinery, transportation equipment, manufactured goods, food, livestock, lubricants. Major suppliers--Japan 21%, U.A.E. 20%, U.K. 10%, U.S. 7%.
Exchange rate (1994): 38 Rials= U.S.$1.

About 50% of the population lives in Muscat and the Batinah coastal plain northwest of the capital; about 200,000 live in the Dhofar (southern) region, and about 30,000 live in the remote Musandam peninsula on the Strait of Hormuz. At least 550,000 expatriates live in Oman, of whom about 455,000 are guest workers from South Asia, Egypt, Jordan, and the Philippines.

Since 1970, the government has given especially high priority to education to develop a domestic work force, which the government considers a vital factor in the country's economic and social progress. In 1986, Oman's first university, Sultan Qaboos University, opened. Other post-secondary institutions include a technical college, banking institute, teachers training college, and health sciences institute. As many as 200 scholarships are awarded each year for study abroad.

Muscat and Oman (as the country was called before 1970) was converted to Islam in the seventh century A.D., during the lifetime of Muhammad. Ibadhism, a form of Islam tracing its roots to the Kharijite movement, became the dominant religious sect in Oman by the eighth century. Contact with Europe was established in 1508, when the Portuguese conquered parts of the coastal region. Portugal's influence predominated for more than a century, with only a short interruption by the Turks. Fortifications built during the Portuguese occupation can still be seen at Muscat. After the Portuguese were expelled in 1650 and while resisting Persian attempts to establish hegemony, Muscat and Oman extended its conquests to Zanzibar (now part of Tanzania), other parts of the eastern coast of Africa, and portions of the southern Arabian peninsula. During this period, political leadership shifted from the Ibadhi imams, who were elected religious leaders, to hereditary sultans who established their capital in Muscat. The Muscat rulers established trading posts on the Persian coast (now Iran) and also exercised a measure of control over the Makran coast (now Pakistan) of mainland Asia. By the early 19th century, Muscat and Oman was the most powerful state in Arabia and on the East African coast.

Muscat and Oman was the object of Franco-British rivalry throughout the 18th century. The British developed the stronger position in 1908 through an agreement of friendship. During the 19th century, Muscat and Oman and the United Kingdom concluded several treaties of friendship and commerce. Their traditional association was confirmed in 1951 through a new treaty of friendship, commerce, and navigation by which the United Kingdom recognized the sultanate as a fully independent state.

When Sultan Sa'id Sayyid died in 1856, his sons quarreled over his succession. As a result of this struggle, the empire--through the mediation of the British Government under the "Canning Award"--was divided in 1861 into two separate principalities--Zanzibar, with its East African dependencies, and Muscat and Oman. Zanzibar paid an annual subsidy to Muscat and Oman until its independence in early 1964.

During the late 19th and early 20th centuries, the sultan in Muscat faced rebellion by members of the Ibadhi sect residing in the interior who wanted to be ruled exclusively by their religious leader, the Imam of Oman. This conflict was resolved temporarily by the Treaty of Seeb, which granted the imam autonomous rule in the interior, while recognizing the nominal sovereignty of the sultan.

The conflict flared up again in 1954, when the new imam led a sporadic five-year rebellion against the sultan's efforts to extend government control into the interior. The insurgents were defeated in 1959 with British help. The sultan then terminated the Treaty of Seeb and voided the office of the imam. In the early-1960s, the exiled imam obtained support from Saudi Arabia and other Arab governments, but this support ended in the 1980s.

In 1964, a separatist revolt began in Dhofar Province. Aided by communist and leftist governments such as the former South Yemen (People's Democratic Republic of Yemen), the rebels formed the Dhofar Liberation Front, which later merged with the Marxist-dominated Popular Front for the Liberation of Oman and the Arab Gulf (PFLOAG). The PFLOAG's declared intention was to overthrow all traditional Arab Gulf regimes in the Persian Gulf.

In mid-1974, PFLOAG shortened its name to the Popular Front for the Liberation of Oman (PFLO) and embarked on a political rather than a military approach to gain power in the other Persian Gulf states, while continuing the guerrilla war in Dhofar.

Sultan Qaboos bin Sa'id assumed power on July 24, 1970, in a palace coup directed against his father, Sa'id bin Taymur, who later died in exile in London. The new sultan was confronted with insurgency in a country plagued by endemic disease, illiteracy, and poverty.

One of the new sultan's first measures was to abolish many of his father's harsh restrictions, which had caused thousands of Omanis to leave the country, and offer amnesty to opponents of the previous regime, many of whom returned to Oman. He also established a modern government structure; and launched a major development program to upgrade educational and health facilities, build a modern infrastructure, and develop the country's resources.

In an effort to curb the Dhofar insurgency, Sultan Qaboos expanded and re-equipped the armed forces and granted amnesty to all surrendered rebels while vigorously prosecuting the war in Dhofar. He obtained direct military support from Iran and Jordan. By early-1975, the guerrillas were confined to a 50-square-kilometer (20-sq.-mi.) area and shortly thereafter were defeated. As the war drew to a close, civil action programs were given increasing priority throughout the province and since then have become major elements in winning the allegiance of the people. The PFLO threat appeared to diminish further with the establishment of diplomatic relations in October 1983 between South Yemen and Oman, and South Yemen's subsequent diminution of propaganda and subversive activities against Oman. In late-1987, Oman opened an embassy in Aden, South Yemen, and appointed its first resident ambassador to the country.

Sultan Qaboos bin Sa'id, the monarch, rules with the aid of his ministers. His dynasty, the Al Sa'id, was founded about 250 years ago by Imam Ahmed bin Sa'id. The sultan is a direct descendant of the 19th-century ruler, Sa'id bin Sultan. The sultanate has no constitution, Western-style legislature, or legal political parties.

Oman's judicial system traditionally has been based on the Shari'a--the Koranic laws and the oral teachings of the Islamic Prophet Muhammad. The Shari'a courts fall under the jurisdiction of the Ministry of Justice, Awqaf, and Islamic Affairs. Oman's first criminal code was not enacted until 1974. The current structure of the criminal court system was established in 1984 and consists of a magistrate court in the capital and four additional magistrate courts in Sohar, Sur, Salalah, and Nizwa. In the less-populated areas and among the nomadic bedouin, tribal custom often is the law.

Administratively, the populated regions are divided into numerous districts (wilayats) presided over by governors (walis) responsible for settling local disputes, collecting taxes, and maintaining peace. Most wilayats are small; an exception is the wilayat of Dhofar, which comprises the whole province. The wali of Dhofar is an important government figure, holding cabinet rank, while other walis operate under the guidance of the ministry of interior.

In November 1991, Sultan Qaboos established the Majlis ash-Shura (Council of Deliberation/Consultation), which replaced the 10-year-old State Consultative Council, in an effort to systematize and broaden public participation in government. Representatives were chosen in the following manner: Local caucuses in each of the 59 districts sent forward the names of three nominees, whose credentials were reviewed by a cabinet committee. These names were then forwarded to the sultan, who made the final selection. The Council serves as a conduit of information between the people and the government ministries. It is empowered to review drafts of economic and social legislation prepared by service ministries, such as communications and housing, and to provide recommendations. Service ministers may also be summoned before the Majlis to respond to representatives' questions. It has no authority in the areas of foreign affairs, defense, security, and finances.

After North and South Yemen merged in May 1990, Oman settled its border disputes with the new Republic of Yemen on October 1, 1992. The two neighbors have cooperative bilateral relations.

Although Oman enjoys a high degree of internal stability, regional tensions in the aftermath of the Persian Gulf war and the Iran-Iraq war continue to necessitate large defense expenditures. In 1992, Oman budgeted $1.73 billion for defense--about 15% of its GDP. Oman maintains a small but effective military, supplied mainly with British equipment in addition to items from the United States, France, and other countries. British officers, on loan or on contract to the sultanate, help staff the armed forces, although a program of "Omanization" has steadily increased the proportion of Omani officers over the past several years.

Principal Government Officials
Sultan, Prime Minister, and Minister of Defense, Foreign Affairs, and Finance--Qaboos bin Sa'id Al Said
Minister of Palace Office Affairs--Ali bin Majid Mamari
Minister of State for Foreign Affairs--Yusif bin Alawi bin Abdallah
Deputy Prime Minister for Financial and Economic Affairs-- Qais bin Abd al-Munim al-Zawawi
Deputy Prime Minister for Legal Affairs--Fahd bin Mahmud Al Sa'id
Deputy Prime Minister for Security and Defense--Fahar bin Taymur Al Sa'id
Ambassador to the U.S.--Ahmed bin Mohammad al-Rasbi
Permanent Representative to the UN--Salim al-Khusaybi

Oman maintains an embassy in the United States at 2535 Belmont Rd. NW, Washington, DC 20008 (tel. 202-387-1980).

When Oman declined as an entrepot for arms and slaves in the mid-19th century, much of its former prosperity was lost, and the economy relied almost exclusively on agriculture, camel and goat herding, fishing, and traditional handicrafts. Today, oil fuels the economy and revenues from petroleum products have enabled Oman's dramatic development over the past 20 years.

Oil was first discovered in the interior near Fahud in the western desert in 1964. Petroleum Development (Oman) Ltd. (PDO) began production in August 1967. The Omani Government owns 60% of PDO production, and foreign interests own 40% (Royal Dutch Shell owns 34%; the remaining 6% is owned by Compagnie Francaise des Petroles [Total] and Partex). In 1976, Oman's oil production rose to 366,000 barrels per day (b/d) but declined gradually to about 285,000 b/d in late 1980 due to the slow depletion of recoverable reserves. From 1981 to 1986, Oman was able to compensate for declining oil prices by increasing its production levels, which reached 600,000 b/d. With the collapse of oil prices in 1986, however, revenues dropped dramatically. Production was cut back temporarily in coordination with the Organization of Petroleum Exporting Countries (OPEC), and production levels again reached 600,000 b/d by mid-1987, which helped increase revenues. By mid-1993, production had climbed to more than 750,000 b/d but falling oil prices may necessitate further adjustment. Oman is not a member of OPEC but is a leader of Independent Petroleum Exporting Countries.

Oman does not have the immense oil resources of some of its neighbors. Nevertheless, recently, it has found more oil than it has produced, and total proven reserves rose from 2.9 billion barrels in January 1982 to 4.6 billion barrels by the end of 1992. The outlook for additions to reserves is promising, although Oman's complex geology makes exploration and production a challenge. Recent improvements in technology, however, have enhanced recovery. Natural gas reserves, which will increasingly provide the fuel for power generation and desalination, stand at 17 trillion cubic feet. Studies are currently underway to supply export of gas for liquefied natural gas after processing in Oman.

Agriculture and fishing are the traditional way of life in Oman. Dates and limes, grown extensively in the Batinah coastal plain and the highlands, make up most of the country's agricultural exports. Coconut palms, wheat, and bananas also are grown, and cattle are raised in Dhofar. Other areas grow cereals and forage crops. Poultry production is steadily rising. Fish and shellfish exports reached $35 million in 1991.

The government is undertaking many development projects to modernize the economy and improve the standard of living. Increases in agriculture and especially fish production are believed possible with the application of modern technology. The Muscat capital area has both an international airport at Seeb and a deepwater port at Mina Qaboos. An airport in Salalah, capital of the Dhofar Governate, and a seaport at nearby Raysut were recently completed. A national road network includes a $400-million highway linking the northern and southern regions. In an effort to diversify, the government built a $200-million copper mining and refining plant at Sohar. Other large industrial projects include an 80,000 b/d oil refinery and two cement factories. An industrial zone at Rusayl is the showcase of the country's modest light industries. Marble, lime-stone, and gypsum may prove commercially valuable in the future.

Some of the largest budgetary outlays are in the areas of health services and basic education. The number of schools rose from three in 1970 to more than 840 by 1993, while hospital and clinic beds increased during this period from 12 to 4,355.

The subsequent drop in oil prices over the 1980s, combined with rapidly growing recurrent outlays and ambitious spending programs for development and defense usually have created budget deficits every year (except 1990) since 1982.

Economic growth surged in Oman in 1992. This was the direct result of the improvement in Oman's oil sector, which experienced higher prices and an increased production level. The other key sector of the economy, government spending, is directly driven by the amount of oil revenues the government receives.

The economic outlook for the remainder of the 1990s is good, although falling oil prices once again will require budget cutbacks. The Omani Government is continuing to pursue its fourth five-year plan, launched in 1991, to reduce its dependence on oil and expatriate labor. The plan focuses on income diversification, job creation for Omanis in the private sector, and development of Oman's interior. Government programs offer soft loans and propose the building of new industrial estates in population centers outside the capital area. The government is giving greater emphasis to the "Omanization" of the labor force, particularly in sectors such as banking, hotels, and municipally-sponsored shops benefiting from government subsidies. Currently, efforts are underway to liberalize investment opportunities in order to attract foreign capital.

U.S. firms face a small and highly competitive market dominated by trade with Japan and Britain and re-exports from the United Arab Emirates. The sale of U.S. products also is hampered by higher transportation costs and the lack of familiarity with Oman on the part of U.S. exporters. However, the traditional U.S. market in Oman, oil field supplies and services, should grow as the country's major oil producer continues a major expansion of fields and wells.

Except for a brief period of Persian rule, the Omanis have remained independent since 1650. Under its previous ruler, Oman had limited contacts with the outside world, including neighboring Arab states. When Sultan Qaboos assumed power in 1970, only two countries, the United Kingdom and India, maintained a diplomatic presence in the country. A special treaty relationship permitted the United Kingdom close involvement in Oman's civil and military affairs. Ties with the United Kingdom have remained friendly under Sultan Qaboos.

Oman pursues a moderate foreign policy. It supported the Camp David accords and was one of three Arab League states, along with Somalia and Sudan, that did not break relations with Egypt after the signing of the Egyptian-Israeli Peace Treaty in 1979. Oman supports the current Middle East peace initiatives, as it did those in 1983. In April 1994, Oman hosted the plenary meeting of the water working group of the peace process, the first Gulf state to do so During the Persian Gulf crisis, Oman assisted the UN coalition effort. Oman has developed close ties to its neighbors; it joined the six-member Gulf Cooperation Council when it was established in 1980.

For many years, Oman avoided relations with communist countries because of the communist support connection to the insurgency in Dhofar. Recently, however, Oman has undertaken diplomatic initiatives in the Central Asian republics, particularly in Kazakhstan, where it is involved in a joint oil pipeline project. In addition, Oman maintains a low-key relationship with Iran, its northern neighbor, and the two countries regularly exchange delegations. Oman is an active member in international and regional organizations, notably the Arab League. Oman is a temporary member of the UN Security Council for 1994-95.

The United States has maintained relations with the sultanate since the early years of American independence. A treaty of friendship and navigation, one of the first agreements of its kind with an Arab state, was concluded between the United States and Muscat in 1833. This treaty was replaced by the treaty of amity, economic relations, and Consular Rights signed at Salalah on December 20, 1958.

A U.S. Consulate was maintained in Muscat from 1880 until 1915. Thereafter, U.S. interests in Oman were handled by U.S. diplomats resident in other countries. In 1972, the U.S. ambassador in Kuwait was accredited also as the first U.S. ambassador to Oman, and the U.S. embassy, headed by a resident charge d'affaires, was opened. The first resident U.S. ambassador took up his post in July 1974. The Oman embassy was opened in Washington, DC, in 1973.

U.S.-Omani relations were strengthened in 1980 by the conclusion of two important agreements. One provided access to Omani military facilities by U.S. forces under agreed upon conditions. The other agreement established a Joint Commission for Economic and Technical Cooperation, located in Muscat, to provide U.S. economic assistance to Oman. A Peace Corps program, which assisted Oman mainly in the fields of health and education, was initiated in 1973 and phased out in 1983. A team from the Federal Aviation Administration worked with Oman's Civil Aviation Department on a reimbursable basis but was phased out in 1992.

In April 1983, Sultan Qaboos made a state visit to the United States. Vice President Bush visited Oman in 1984 and 1986.

Principal U.S. Officials
Ambassador--David J. Dunford
Deputy Chief of Mission--Elizabeth McKune
Chief, Political/Economic Section--Roberta L. Chew
Economic/Commercial Officer--Richard M. Eason
Public Affairs Officer--Matthew Lussenhop

The address of the U.S. embassy in Oman is P.O. Box 202, Postal Code No. 115, Muscat, Sultanate of Oman. Telephone: (011) (968) 698-989, 699-094. FAX: (011)(968) 604-316.