Middle East: Faced with protests, Oman offered economic sweeteners. Will it work?

Notes from different corners of the world.
March 29 2011 11:30 AM

Paying for Peace

Faced with protests, Oman offered economic sweeteners. Will it work?

Young protesters rioted in Sohar on Feb. 27.
Young protesters rioted in Sohar on Feb. 27.

SOHAR, Oman—The images were shocking, unbelievable really, for a country defined by its politeness and reserve.

Hundreds of angry young men, many with their faces covered in checkered scarves, charged down the main street in this northern port city on Feb. 27, throwing rocks at riot police, blocking traffic, looting, and burning shops. It was a full-blown riot like nothing anyone had witnessed here. And contrary to the claim of a text message sent days later to Oman's mobile phone subscribers, the main protagonists were not secret agents from a neighboring country; they were mostly young Omanis, some recent university graduates.

And they were furious.

For years they had been complaining quietly, politely, about how hard it was to find work. They groused among themselves that without jobs, they couldn't afford to buy a car or a house. More important, they couldn't afford to get married, because it cost the equivalent of $25,000 for the dowry. And in a culture that doesn't allow young men to date, marriage was the only way to get the girl. That made them even more frustrated and angry. Their peaceful sit-in turned violent after police tried to dislodge them from the traffic circle where they camped overnight in February.

After a day of rioting and looting that left one protester dead, the government quickly responded with unprecedented concessions, including 50,000 new jobs, unemployment benefits, higher pensions, and increased allowances for members of the military and for some university students. The sultanate, led unchallenged for four decades by Sultan Qaboos bin Said al-Said, also announced that it would subsidize some unspecified commodities and fix the prices of others to ease inflationary pain.

Some Omanis sighed with relief. Soon things would get back to normal. And yet Oman, with its population of 2.8 million, hasn't gone back to normal. Although no one has called for regime change, and nearly all the protesters make a point of exalting Qaboos even while criticizing his government, protests have continued daily, some smaller and quieter than others, as private-sector and government employees join the call for higher wages and better working conditions. Those pressing for political reform are getting drowned out by the louder hum of people demanding increases in the minimum wage, equitable pay for Omanis and higher-paid foreign workers, longer maternity leave, and better health-care benefits.

Young protesters clashed with riot police on Feb. 27.
Young protesters clashed with riot police on Feb. 27.

In many ways, the government's response has been typical of a Gulf monarchy, offering cash from the oil coffers to placate the restive populace. Oman hasn't tried to silence its protesters with bullets and tanks the way Bahrain, Syria, Libya, and Yemen have. Economists who are watching what is happening in the Middle East agree that Oman's response is preferable. But many say that simply offering financial concessions won't necessarily help the economy in the long run, because it doesn't solve the underlying problems that have created the high rate of unemployment among educated youth. Nor does it address the needs of international companies that bring their businesses to the Gulf but hire foreigners with better skills and sometimes, they argue, a better work ethic.

"This is not the right way to go about dealing with unemployment of educated people, which is really the serious problem that the Gulf faces," said Djavad Salehi-Isfahani, an economics professor at Virginia Polytechnic Institute and State University. "If you have unemployment and educated young people, that is telling you something is wrong. They've promised people jobs. Young people delivered the education. The government hasn't been able to deliver the jobs. If you are in a hole, you shouldn't be digging yourself deeper."

Nooh Hassan al-Shidi.
Nooh Hassan al-Shidi

Nooh Hassan al-Shidi, 22, is one of the young men who has been protesting for weeks in Sohar, where he graduated from Sohar University last year with a degree in mechanical and electrical engineering. He wasn't on the streets during the Feb. 27 riot, but he has joined the demonstrations since, though he doesn't tell his parents that's what's he doing, he told me. They think he's at an Internet cafe or hanging out with his friends.

He's representative of many of the young protesters in Sohar. He's a polite, respectful young man who speaks reverently of the sultan. "His majesty wants to help the people," al-Shidi said. He agreed to talk to me last Friday, and he also agreed to be photographed, though he broke away for a half-hour to attend open-air prayers. He is not afraid to speak frankly, he said, because he has run out of options.

He has been looking for a job since he graduated, combing the newspaper want ads, showing up for interviews, following every lead. He is willing to start at the bottom and work his way up, he said. But he's not interested in the new jobs the government recently announced, because they are mostly police and army positions. He has applied for some other positions the government recently created, but thousands have submitted résumés, and he doesn't expect to be successful. Many Omanis believe people with connections get the jobs, a concept known as wasta in Arabic.

"This is all our problem," al-Shidi said. "They told us we would find employment after we graduated, but we graduated, and none of my friends found jobs. The companies all want experience, but we don't have experience, and if they don't hire us, how will we get experience?"

Al-Shidi is also unimpressed with the unemployment benefits he was offered last month, although he has applied for them. Job seekers were promised 150 Omani rials, or $390 a month, while they are looking for work.

"We don't want 150 rials," he said. "We didn't do anything for it. We want a job. We want to do something in our life. If you have a job, you will have a house, a car. You can get married. All of us are young."

Early Tuesday morning, police cleared the Sohar traffic circle of protesters, tore down banners, and reopened the main north-south highway that runs through the city. Army and security units surrounded the city to maintain order. Al-Shidi estimated that about 40 protesters were camped at the traffic circle when police rounded them up, although he left shortly before it happened. Many people in Sohar have grown weary of the demonstrations and have criticized protesters for blocking access to the government ministries this weekend and for threatening employees who worked there. The protesters said they were upset that the main government employment agency had been closed, so they retaliated by effectively closing the others. "It wasn't good," said al-Shidi, who was not involved.

On Tuesday afternoon, about 10 people gathered outside the U.S. Embassy in Muscat to ask the Americans to help the detained protesters. The group left after meeting with a security official and vowed to return on Wednesday. As a precaution, the embassy sent home some employees.

Twenty-four-year-old Mardas Ahmed al-Abri also graduated from university last year, and he still hasn't been able to find a job. He has a degree in public relations from Sultan Qaboos University, Oman's flagship public university in Muscat, reserved for the nation's top students.

He dreams of working for OmanAir, the national carrier, as a member of the cabin crew, so he can travel the world. But there are no vacancies, and OmanAir's employees went on strike earlier this month, demonstrating for better wages and benefits. He wants to visit India to improve his English, but he has to stay in Oman to help drive his father's taxi, al-Abri said.

Before the government announced the new unemployment benefits, al-Abri was hoping to find a job in a shop or a supermarket, anything to supplement his income. But now he says he will wait and try to find something in his field.

"This is a big problem," he said. "It's really difficult to get married, because the family, the wife, they ask 6,000 rial and then 2,000 for the party. The government should fix it. It's not suitable to have a girlfriend. You should marry her."

Oman doesn't have current unemployment—or employment—figures.

"It's a rat race," said Eckart Woertz, a visiting fellow at Princeton University who heads the economics department at the Gulf Research Center in Dubai. "There are only so many jobs. A lot of them will still be left out. Educated, frustrated young men are more restless than uneducated men. These are the guys who make the revolutions, not the blue-collar couch potatoes."

Oman also is not as wealthy as some of its neighbors in the Gulf Cooperative Council. It produces less oil and has less revenue to distribute as a result.

Nader Habibi, an economics professor at the Crown Center for Middle East Studies at Brandeis University, said that if the Omani government decides to make larger economic concessions, it could run fiscal deficits and face higher inflation down the road. "Since GCC economies are relatively open, additional spending does not translate into higher prices for most consumer goods, because imports can be easily increased to address the additional demands," he said. "But housing and real-estate prices will come under pressure as some of the money that the government injects into the economy will go into these markets, and the supply is limited in the short run."

But Taqi bin Abdulredha al-Abduwani, dean of Gulf College Oman, a private business school, said he believes that the financial concessions can only help the economy, because the people who will receive them, such as pensioners and the jobless, will spend the benefits.

"What his majesty is doing is absolutely right, because you need to calm the people down," he said. "It will not destroy the economy. It will help, because the people will have better buying power. It's important we start somewhere."

Virginia Tech professor Salehi-Isfahani said the government still needs to address the larger issue of a higher-education system that promises jobs in the public sector in return for diplomas and degrees.

"What these young people need is subsidies to learn global skills," he said. "That would be the right subsidy coming from the oil money. Not to look to the government. These people are in search of government jobs often, and they realize that those jobs are basically allocated or rationed. This is a very unproductive way of promoting education. Getting a diploma, getting a degree, is not the same thing as obtaining skills that the global economy needs."

Nasser al-Khatri, 23, who graduated in January from Sultan Qaboos University with a mass communications degree, acknowledged that he would prefer to work for the government. After graduation, he worked at a private media company for a short time, but he quit because of the hours and the pay.

"I liked that job, but the salary was too low," he said. He made about $900 a month and worked from 8 a.m. to 4 p.m., longer hours than most civil-service employees.

"If I work in the government, I can work in the private side for myself," he said. "I like shooting. My ambition is to open a production company."

In the end, Brandeis economist Nader Habibi said that he doesn't believe economic reforms will be enough for the people of Oman, particularly since they have suddenly became so vocal in making their petitions.

"In my view, these political and economic demands are not substitutes for each other," he said. "Cash payments and government job offers can help reduce the public anger marginally, but it will not eliminate it completely. Even if the Omani government offers economic incentives, political demands are likely to continue."

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