Oman:  Smooth transition of power

Oman: Smooth transition of power

January 16 2020

Oman's monarch, Sultan Qaboos bin Said, died on 10 January. He was succeeded by his cousin Haitham bin Tariq, whose designation came through a sealed letter of Qaboos rather than by Royal Family Council consensus. Yet, Haitham is unlikely to face an open challenge from within the royal family – even though two if his brothers were also seen as succession candidates – as the Omani army is loyal to the sultan rather than royal family mem­bers. Oman’s bonds were lifted at the start of the week after the apparently peaceful transition of power. Haitham has widespread foreign policy experience and we expect policy continuity, including foreign policy neutral­ity and a policy of balancing relations with the U. S., Iran, and other GCC states. On the domestic front, policy chal­lenges include public discontent over high unemployment (17%), perceived corruption and economic mismanage­ment. Markedly lower global oil prices since 2014 have caused persistently huge fiscal and current account deficits as well as rapidly rising public and external debt levels, raising concerns over fiscal sustainability in the medium term.

Senior Economist for Emerging Europe and the Middle East
manfred.stamer@eulerhermes.com