It has been estimated that Oman may only have 30 years of oil production left before its oil supply is depleted.
Oman’s economic future might be in jeopardy, unless China steps in to help.
The Arabian monarchy has relied on oil exports in the past to sustain its economy, but that may soon change. It has been estimated that Oman may only have 30 years of oil production left before its oil supply is depleted.
Other energy economies in the Middle East, most notably Saudi Arabia, face a similar prospect. However, unlike Saudi Arabia, the situation in Oman is more dire and the Omani economy less diversified.
A new megaproject
Many nations have embarked on grand infrastructure projects in attempts to revitalize their economies.
Saudi Arabia is developing NEOM, a proposed futuristic megacity that will largely run on automation. Across the Red Sea, Egypt is developing a series of tourist destinations along the Mediterranean coast, while Nigeria plans to construct a modern addition to Lagos.
Oman also sees infrastructure as the future. But unlike in Saudi Arabia, Oman’s infrastructure projects are more realistic and developing at a faster rate – with Chinese help.
Oman is investing heavily in its underpopulated south as part of its vision for the future. This investment includes the building of an entire city and port in the once small fishing village of Duqm. Leaders in Oman hope this will incentivize Omanis, 70% of whom live in the north in and around the capital Muscat, to relocate southward.
Muscat hopes Duqm will lead to Oman becoming an industrial power that will appeal to those wishing to avoid the Persian Gulf.
China’s interest in Duqm
The port at Duqm will be the center of the new project. Building off the success of the port are new living and industrial centers, which are prepared to house more than 100,000 people.
The People’s Republic of China (PRC) is investing heavily in this portion of the project, sinking US$10.7 billion into the aptly named Sino-Oman Industrial City. Here, Chinese business interests are building factories, housing, tourism centers and other infrastructure that might contribute to the success of the port and the growing city that accompanies it.
The location of Duqm could not be more fortuitous for Beijing. The port sits along China’s Maritime Silk Road leading from the PRC, across the Indian Ocean and up through the Red Sea into the Mediterranean.
West of Duqm is the small African nation of Djibouti, which is home to China’s only overseas military base. Across the Arabian Sea to the east of Duqm is the Pakistani port of Gwadar, the crown jewel of China’s Belt and Road Initiative (BRI).
Duqm contributes to a string of ports built with Chinese financing along the Indian Ocean. Along with Gwadar, other Chinese projects are in Sri Lanka and the Maldives. Projects in these nations have attracted criticism for what many consider to be “debt-trap diplomacy” – colossal debt that these smaller nations have little hope of repaying.
However, Duqm does not appear to have been the recipient of as much investment as the ports of Gwadar or Sri Lanka.
The strategic realities
It has also been speculated that Duqm might contribute to what has been labeled as Beijing’s “string of pearls” strategy, which would purportedly help solidify Chinese power in the increasingly strategic Indian Ocean.
If Beijing does have strategic designs on the port of Duqm, it will have to share. The United States Navy has an agreement with Muscat that allows American naval vessels access to the port in Duqm.
The selling point of the new port – that it serves as an alternative to the Persian Gulf – serves a strategic purpose for the US Navy, which has a major presence in the Persian Gulf and is vulnerable to Iranian attack. Along with the US Navy, Britain’s Royal Navy and the Indian Navy will also be porting at Duqm.
The progress in Duqm reflects the global realities that are being revealed as the 21st century advances. It represents attempts by Arab monarchies to diversify their economies away from fossil fuels. It also exhibits the so-called “rise of the rest” of globalization, which has resulted in the Indian Ocean becoming an arena of paramount importance.
Leading the “rest” is China, which both economically and strategically is moving into areas that have traditionally been considered the domain of Western powers like the US and the United Kingdom. Places like Duqm are now being viewed as a microcosm of the greater strategic conflict and economic cooperation between these powers and China.
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