Armed Forces: In mid-1993 personnel strength 36,700, including 3,700 foreign personnel, as follows: Royal Oman Land Forces, 20,000 Royal Oman Navy, 3,500 Royal Oman Air Force, 3,500 and Royal Household, 6,000 (including Royal Guard, 4,500 Special Forces, 700 Royal Yacht Squadron, 150 and other, 650). Army primarily infantry force but has some tanks and armored cars. Navy a coastal patrol force, expanding and modernizing by acquiring guided missile (Exocet) craft and new gunboats. Air force has more than fifty combat aircraft, all of British manufacture.

Overview

SINCE 1970, WHEN OMAN'S RULER, Sultan Qabus ibn Said Al Said, assumed power, the sultanate has moved from a poor underdeveloped country toward a modern nation state. Indexes of development measuring per capita gross national product, infant mortality, literacy rates, and availability of social services validated the government's claim that its policies have effected positive change. Although the government's administrative structure expanded to accommodate public services, change in the political system has been slow. Oman remains a conservative monarchy, with the sultan relying on the support of a traditional political elite comprising the Al Said ruling family, established merchant families, and, to a lesser extent, tribal shaykhs.

Until the commercial production and export of oil in 1967, Oman's budget was exclusively dependent on religious taxes (zakat), customs duties, and British loans and subsidies. The bulk of this revenue served as a mechanism through which the sultan could co-opt his traditional allies among the merchant families and tribal shaykhs. By transferring income from the state treasury, the sultan was able to draw in influential segments of Omani society and ensure continuance of Al Said rule. Post-1970 economic developments were in part constructed on these antecedents. Income distribution remained a principal mechanism for ensuring political stability, but the network involved a state administrative structure rather than the more direct and personal individual-ruler relationship. Also, the system expanded to incorporate the average Omani through the creation of a public sector. The net effect has been the establishment of a salaried middle class whose economic interests are closely tied with the government.

Since the development of the country's infrastructure in the 1970s, national development plans have given priority to reducing dependency on oil exports and encouraging income-generating projects in non-oil sectors (diversification), promoting privatesector investment, and effecting a wider geographical distribution of investments to correct regional imbalances. Such a wider distribution is intended to narrow the gap in the standard of living in different regions, develop existing areas of population, and discourage migration to densely populated urban centers, such as Muscat (also seen as Masqat), the capital. Equally important are the national goals to develop local human resources, to increase indigenous participation in the private sector, and to improfeb rove government management and organization.

Constraints on the government in implementing its economic diversification program include the limited growth potential of alternative sectors, such as agriculture, fishing, and industry. Constraints also include the limited involvement of the private sector in businesses other than trade, the low-skilled labor force, the limited water resources, and the inability of government ministries to manage and expand services.

Sultan Qabus ibn Said, therefore, faced different challenges in 1993 than those he confronted when he assumed power in 1970 through a palace coup d'état. Then, the rebellion of tribes in southern Dhofar (also seen as Zufar) region and the exploitation of the country's oil reserves had taken precedence.

Opportunities in urban centers stimulated a rural-urban shift, reducing the number of individuals engaged in agricultural labor and contributing to the key role of the oil sector in the economy. On the one hand, an increasingly urbanized population has the potential to be better educated and better enumerated. On the other hand, the small indigenous population has necessitated the presence of a large foreign labor force. This has contributed to an informal caste system, with Omanis clearly ranked highest in the hierarchy, followed by Westerners, with non-Western foreigners at the bottom.

Economic development has resulted in social transformation, not only in terms of diminishing the importance of the tribal element in Oman and stratifying Omani society but also in terms of inadvertently engendering a sense of entitlement among the public, common to social welfare states. In doing so, the government has been under increasing pressure to provide suitable employment for new migrants to the cities from village communities and to new graduates from colleges, to expand its social services, and to maintain the security of the country.

To fulfill these expectations, the government must ensure sustainable economic growth. Therefore, the policies of diversification and indigenization have taken on greater importance. Diversification is needed to ensure growth in the post-oil era indigenization potentially eliminates the demand for foreign labor and increases opportunities for Omani nationals. The problems of the 1990s are resistant to change, however. The depletion of the country's proven oil reserves (at the production rate of 1992, reserves will be depleted within seventeen years) heightens the need for economic diversification, but so far, non-oil sectors have shown limited potential.

The net effect of the government's policies has been to link economic conditions with political stability. The suppression of the Dhofar rebellion in the first half of the 1970s provided a lesson for Sultan Qabus ibn Said. By addressing the gross economic neglect of the south, the government was able to ensure some political quiescence. In providing the majority of Omanis with adequate income through employment in the public sector, health and medical services, education, and other social services, the government has similarly ensured a modicum of public political support.

Data as of January 1993