Palestine seeks economic relations with Oman

A Palestinian ministerial delegation is preparing to visit Oman early next year as part of efforts to sever economic ties with Israel, but some analysts wonder what benefits are to be gained by either party.

al-monitor Palestinian President Mahmoud Abbas meets Omani Foreign Minister Yusuf bin Alawi bin Abdullah, Ramallah, Israeli-occupied West Bank, Oct. 31, 2018.  Photo by PALESTINIAN PRESIDENCY/HANDOUT/Anadolu Agency/Getty Images.

Dec 24, 2019

Palestinian Prime Minister Mohammad Shtayyeh announced on Dec. 9 that a ministerial delegation and representatives of the private sector would visit the Sultanate of Oman in January 2020 to open new avenues for the Palestinian economy and enhance cooperation as part of the strategy of disengaging economically from Israel and focusing on Arab economic depth. The Palestinians' engagement with Oman comes as their economy continues to face serious challenges.

Mohammad Abu Jiab, editor in chief of the Gaza newspaper Al-Eqtesadia, told Al-Monitor, “Oman has great economic, production and oil capacities. It is a fertile country that would be an important resource for Palestinians in terms of employment of workers, joint investment and development of the agricultural sector, especially since the climate of the two countries is similar, and both have an abundance of unexploited agricultural areas. Oman is a seaside country, which also allows exchanging experiences to develop fish wealth.”

In June Oman announced plans to open an embassy in Ramallah, which would make it the first Gulf state to do so. Some Palestinian officials supported the move, viewing it as an opportunity to strengthen relations between the two countries, while others believed it an Omani attempt to assuage Palestinians displeased with the sultanate's moves toward normalizing relations with Israel. A series of Palestinian-Israeli-Omani visits took place in October 2018, raising the possibility that growing political relations between the Omanis and the Palestinians might also be behind the Palestinian drive to strengthen economic relations with Oman.

Israeli Prime Minister Benjamin Netanyahu visited Oman on Oct. 26, 2018, to discuss the peace process and met with Sultan Qaboos. Prior to that, Palestinian President Mahmoud Abbas had visited Oman on Oct. 22 to meet with Qaboos and to discuss cooperation in various fields, and after Netanyahu's visit to Oman, Abbas met in Ramallah on Oct. 28 with an envoy of the sultan and on Oct. 31 with Omani Foreign Minister Yusuf bin Alawi bin Abdullah. This cluster of visits prompted talk of Omani mediation between the Palestinians and Israel to resume peace negotiations stalled since mid-2014. The last official Israeli visit to Oman was Nov. 5, 2018, when Foreign Minister Yisrael Katz attended an international transportation conference and suggested building a railway linking Israel to the Arab Gulf.

On July 1 of this year, Israeli Mossad chief Yossi Cohen announced that Tel Aviv would reopen a representative office in Muscat days after Israel took part in the Bahrain Economic Conference, which the Palestinians boycotted, kicking off the peace plan promised (but still undelivered) by US President Donald Trump. The Israeli office is yet to be opened.

Hani Albasoos, a professor of political sciences at Sultan Qaboos University, told Al-Monitor, “The Omani business market is weak, and the sultanate is experiencing economic difficulties due to the decline in international oil prices. The Palestinian economic openness to the sultanate is purely a formality. The PA has nothing to offer except basic food exports, such as oil and olives. As for the light food industries, the sultanate depends on its local products as well as Arab and Turkish products that are of high quality and affordably priced.”

Albasoos further indicated that he does not see Oman as a place that Palestinians would aspire to work due to the low wages. “Oman relies on Asian labor for low wages that do not exceed $300 per month, and for high-paying jobs, it depends on [other] foreigners,” he said.

Jaafar Sadaqa, economic editor of the Wafa, the Palestine News Agency, told Al-Monitor, “The PA pushes the Gulf markets, including the Omani one, as target markets to encourage Palestinian businessmen [to invest] there, as they are large and their preference lies in the fact that they import and do not export, and their investments are concentrated in stone and marble. We are interested in opening doors for Palestinian workers in Oman, such as teachers, engineers and manpower, in order to reduce unemployment rates among Palestinians as well as to export our agricultural products to the sultanate.” 

On April 30, the Palestinian Central Bureau of Statistics reported the overall unemployment rate for 2018 at 31%. The rate on the West Bank stood at 18%, while in Gaza it reached 52%.

There are no accurate official figures available on Omani financial support for the Palestinians, but in recent years bilateral agreements have been signed in the fields of culture, media, economy, agriculture, and fisheries, and committees formed on political consultation and economic and cultural cooperation, religious affairs and education, and administrative development.

In July, the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) announced that Oman had donated about $334,000 to the Relief and Social Services program in Gaza, benefiting some 2,000 poor families. In February, the government-run Oman Charity Organization donated two truckloads of wheelchairs for people with special needs in Hebron.

Nael Moussa, professor of economics at An-Najah National University in Nablus, told Al-Monitor, “Today, Palestinian efforts in regard to Oman are good and appreciated, but they make us wonder why the PA has waited 25 years since its establishment before opening up to the Arab countries and has been mortgaging the entire Palestinian economy to Israel. The problem with Oman is that it is geographically distant from Palestine, and the Palestinians' economic openness will pave the way for Omani normalization with Israel.”

Despite the efforts of Shtayyeh’s government to open up to Arab economies, by strengthening trade relations and concluding bilateral investment agreements, Palestinians have yet to feel positive effects on the ground.

Awad bin Saeed Baquwair, former president of the Omani Journalists Association, told Al-Monitor, “Oman has important cultural, medical, athletic and university projects in Palestine as well as universities. Perhaps the opening of an Omani Embassy in Ramallah will enhance commercial and economic aspects.”

Baquwair asserted, “The upcoming Palestinian visit to the Sultanate will open up very important prospects and will provide opportunities for Omani businessmen to invest in Palestine and allow Palestinian companies to work for us. The Palestinians have economic competencies for which they will find room in Oman.”

One of the potential challenges facing the Palestinians' economic aspirations in regard to Oman could be the extent of Israel’s approval or opposition given that it controls crossings and commercial ports and thus the export of Palestinian products. There are doubts in particular that Israel would approve of Palestinians importing oil and gas from the sultanate.

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