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Oman: Reform, Security, and U.S. Policy

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Order Code RS21534 Updated June 28, 2005 CRS Report for Congress .Received through the CRS WebMay 29, 2008 Oman: Reform, Security, and U.S. Policy Kenneth Katzman Specialist in Middle Eastern Affairs Foreign Affairs, Defense, and Trade Division Summary The Sultanate of Oman, is a long-time strategic U.S. ally in the Persian Gulf,; it has allowed U.S. access to its military facilities long before the 1990 Persian Gulf crisis. It hosted U.S. forces participating in recent major combat operations in Afghanistan and Iraq. Sultan Qaboos has been slowly opening the political process while trying to manage an economy that lacks vast oil reserves. This report will be updated periodically. See also CRS Report RL31533, The Persian Gulf: Issues for U.S. Policy, 2004. Introduction Oman is located along the Arabian Sea and guards the southern approaches to the Strait of for virtually every U.S. military operation in and around the Gulf since 1980. Partly in appreciation, the United States signed a free trade agreement (FTA) with Oman on January 19, 2006; implementing legislation was signed on September 26, 2006 (P.L. 109-283). Sultan Qaboos has been opening the political process slowly while managing an economy that lacks vast oil reserves. This report, prepared with the assistance of Kim Klarman, will be updated. Introduction Oman is located along the Arabian Sea, on the southern approaches to the Strait of Hormuz, across from Iran. Except for a brief period of Persian rule, Omanis have have remained independent since 1650, when they expelled the Portuguese. The Al Said monarchy began in 1744, and it extendedexpelling the Portuguese in 1650. The Al Said monarchy began in 1744, extending Omani influence into Zanzibar and other parts of east Africa until 1861. A long-term rebellion led by the Imam of Oman, (leader of the Ibadhi sect of Islam) ended in 1959, but a leftist revolt broke out in Dhofar Province in 1964. It was defeated by 1975, partly with help from Iranian troops provided by the Shah of Iran Ibadhi sect (neither Sunni or Shiite and widely considered “moderate conservative”) ended in 1959; Oman’s population is 75% Ibadhi. Sultan Qaboos bin Sa’id Al Said, born in November 1940, is the eighth in the line of the Al Said monarchy; he became Sultan in July 1970 after hewhen, with British support, he forced his father to abdicate. He is considered highly popular, but he was married only brieflyhis brief marriage in the 1970s produced no children and therefore no clear successor. Succession would be decided by a “Ruling Family Council” of his relatively small Al Said family (about 50 male members) or, if they fail to reach an agreement, by a succession letter written by Qaboos prior to his death. and has no clear successor. Oman is unique in that its population is 75% Ibadhi Muslim, a sect of Islam that is neither Sunni or Shiite and is described by the State Department as “moderate conservative.” The United States signed a treaty of friendship with Oman in 1833, one of the first of its kind with an Arab state. Oman sent an official envoy to the United States in 1840. A U.S. consulate was maintained in Muscat during 1880-1915, and a U.S. embassy was opened in 1972. The, and the first resident U.S. Ambassador took up his post arrived in July 1974. Oman opened its embassy in Washington in 1973. Congressional Research Service ˜ The Library of Congress CRS-2 Defense and Security Ties1 Oman’s Ties Sultan Qaboos, who is Sandhurst-educated and is respected as a defense strategist by the other Gulf leaders, sees strategist, has long seen the United States as the key security guarantor of the region, although he is an advocate of improving and enlarging joint Gulf state defense capabilities. Qaboos has focused on regional defense cooperation even though Oman, because it is far down the Persian Gulf, did not sense an acute threat from Iraq’s Saddam Hussein. Although Oman has not been as wary of Iran’s Islamic revolutionary government as most of the other Gulf states, perhaps because there is no sizable Shiite community in Iran with which Iran could meddle in Oman, Oman became the first Gulf state to formalize of the region, although he also advocates expanding defense cooperation among the Gulf states. Oman was the first Gulf state to formalize defense relations with the United States just after the 1979 Islamic revolution in Iran. after the Persian Gulf region was shaken by Iran’s 1979 Islamic revolution; Oman signed an agreement to allow U.S. forces access to Omani military facilities (April on April 21, 1980). Three days after the agreement was signedlater, the United States used Oman’s Masirah Island air base in the course ofto launch the failed attempt to rescue the U.S. embassy hostages in Iran. (Oman alsolater served as an intermediary between the United States and Iran for the return of Iranians captured in skirmishesclashes with U.S. naval forces in the Gulf.) during the 1980-1988 Iran-Iraq war. Under the access agreement, which was renewed in 1985, 1990, and 2000 (for ten years), the United States reportedly can use Oman’s airfields, including– with advance notice and for specified purposes – Oman’s military airfields in Muscat (the capital), Thumrait, and Masirah Island, and some U.S. Air Force equipment, including bombs and other lethal munitions, are pre-positioned at these bases.2 Although not a condition for Oman to renew the access agreement in 2000, the stored at these bases.1 During the renewal negotiations in 2000, the United States acceded to Oman’s request that the United States fund the upgrading of the jointly a $120 million upgrade of some jointly-used facilities,32 including a fourth air base at Musnanah, about (Khasab) at Musnanah (50 miles northwest of the capital, Muscat. That cost was about $120 million, and the base is operational). Cooperation With U.S. War Efforts/War on Terrorism. Oman’s facilities contributed significantly to the recent majorto recent U.S. combat operations in Afghanistan (Operation Enduring Freedom, OEF) and, to a lesser extent, Iraq (Operation Iraqi Freedom, OIF), although Omani leaders were publicly critical of the U.S. decision to go to war against Iraq, saying iteven though Omani leaders said that invading Iraq could “incite revenge” against the United States in the Arab world. According to fact sheets provided by the Defense Department, during OEF, there were about 4,300 U.S. personnel in Oman, mostly Air Force, suggesting that Oman air facilities — which also hosted U.S. B-1 bombers —and U.S. B-1 bombers, indicating that the Omani facilities were used extensively for strikes during OEF. The U.S. presence fell slightly to 3,750 during OIF; other facilities closer to Iraq, such as air bases in Kuwait, were more extensively used in OIF than in OEFfor OIF. There are now only about 26 U.S. about 35 U.S. military personnel in Oman, below the pre-September 11, 2001 figure of about 200 U.S. personnel. This indicates that personnel, and Omani facilities are reportedly not now not being used for air support operations in either the Afghanistan or Iraq theater at this time. There was little evident popular opposition in Oman to the U.S. military presence there at the height of either OEF 1 Some of the information in this section comes from CRS conversations with U.S. Embassy officials in Oman during December 2003. 2 Hajjar, Sami. U.S. Military Presence in the Gulf: Challenges and Prospects. U.S. Army War College, Strategic Studies Institute. P.27. 3 Finnegan, Philip. Oman Seeks U.S. Base Upgrades. Defense News, April 12, 1999. CRS-3 or OIF, despite the perception among many Omanis that these operations were against Islam and were harming innocent Muslims in the course of the combat. Oman has been cooperative in the legal, intelligence-sharing, and financial aspects of the global war on terrorism. After the September 11, 2001 attacks, Oman issued new laws to prevent terrorist organizations from raising or laundering money in Oman. According to the State Department report on global terrorism for 2004 (p. 67), Oman has established surveillance systems to identify unusual financial transactions, and it has demonstrated its commitment to freezing the assets of suspected terrorists from Al Qaeda and related organizations. According to U.S. diplomats in Oman, the government wants to join U.S.-led initiatives to combat terrorist threats emanating from container shipping. Oman’s Capabilities and U.S. Security Assistance.4 Oman’s 43,000 man armed force is the third largest of the Gulf Cooperation Council states (GCC, including Saudi Arabia, Kuwait, UAE, Oman, Bahrain, and Qatar). It force is widely considered one of the best trained, but not particularly well equipped with the most modern heavy systems. Qaboos early on relied on seconded British officers to command entire services in the Omani military, but these officers are now mostly limited to an advisory role. Still, British advisers remain particularly influential in Oman’s navy, and much of Oman’s arsenal is British-supplied. Most of the new equipment Oman is ordering or considering is U.S.-made. Oman is eligible for grant U.S. excess defense articles (EDA) under Section 516 of the Foreign Assistance Act. It received 30 U.S.-made M-60A3 tanks in September 1996 on a “no rent” lease basis, and it later was given title to the tanks outright. There have been virtually no EDA transactions since 2000. U.S. officials say Oman might want Bradley fighting vehicles and Humvees as EDA, but in 2004 it turned down a U.S. offer of EDA U.S.-made M1A1 tanks. Any additional armor would supplement the 38 Britishmade Challenger 2 tanks and 80 British-made Piranha armored personnel carriers it bought in the mid-1990s. In an effort to modernize its Air Force, in October 2001, after several years of consideration, Oman announced the purchase of 12 U.S.-made F-16 A/B aircraft and associated weapons (Harpoon and AIM missiles) and training, at a cost of about $800 million. The purchase might have been intended, in part, to keep pace with Oman’s Gulf neighbors that have recently bought F-16s, including the UAE and Bahrain. Oman is using its own funds and the aircraft will be newly produced; Oman wants delivery by the end of 2005. The new aircraft will supplement the 12 less-capable Britishmade Hawk aircraft Oman flies. Oman is also buying three U.S.-made coastal patrol boats suited for anti-narcotics and anti-smuggling missions. Over the past four years, Oman has been receiving increased amounts of U.S. security assistance, partly in appreciation of Oman’s help in OEF and OIF and partly to familiarize Omani officers with U.S. equipment and military values. Amounts are shown in the table below. The United States phased out development assistance to Oman in 1996. At the height of that development assistance program in the 1980s, the United 4 operations in either the Afghanistan or Iraq theater. Oman’s views on Iran suggest that Oman might resist allowing the United States to use facilities in Oman for a strike on Iran, were there a decision to do so. Since September 11, 2001, Oman has cooperated with U.S. legal, intelligence, and financial efforts against terrorism. According to the State Department report on global terrorism for 2007, released April 2008, Oman has been “proactive in its implementation of counterterrorism strategies and its cooperation with neighboring countries to prevent terrorists from moving freely throughout the Arabian Peninsula.” Among Oman’s steps was a January 2007 law establishing a National Committee for Combating Terrorism and a December 2006 agreement with Saudi Arabia to control cross-border transit. Oman has continued its interagency coordination to prevent money laundering. On November 22, 2005, the State Department announced Oman had joined the U.S. “Container Security Initiative,” agreeing to pre-screening of U.S.-bound cargo from its port of Salalah. Cargo will be checked for illicit trafficking of nuclear and other materials, as well as for 1 Hajjar, Sami. U.S. Military Presence in the Gulf: Challenges and Prospects. U.S. Army War College, Strategic Studies Institute. P. 27. 2 Finnegan, Philip. "Oman Seeks U.S. Base Upgrades." Defense News, April 12, 1999. CRS-3 terrorists and their weapons. The table below includes U.S. aid to Oman ( NonProliferation, Anti-Terrorism and Related Programs funds, NADR) to help it establish effective export controls and to sustain its counter-terrorism training capabilities. Oman’s Capabilities and U.S. Security Assistance.3 Oman’s 43,000 person armed force is the third largest of the Gulf Cooperation Council states (GCC, including Saudi Arabia, Kuwait, UAE, Oman, Bahrain, and Qatar). Its force is widely considered one of the best trained; its arsenal is being modernized with purchases from the United States but is not large. Qaboos early on relied on seconded British officers to command Omani military services, and much of its arsenal is British-made, but British officers are now mostly advisory, particularly in Oman’s navy. In an effort to modernize its Air Force, in October 2001, after years of consideration, Oman purchased (with its own funds) 12 U.S.-made F-16 C/D aircraft from new production. Along with associated weapons (Harpoon and AIM missiles), a podded reconnaissance system, and training, the sale was valued at about $825 million; deliveries were completed in 2006. Oman probably made the purchase to keep pace with its Gulf neighbors, including UAE and Bahrain, that had bought F-16s. With U.S. Foreign Military Financing (FMF), – recent amounts of which are shown below – Oman has bought U.S.-made coastal patrol boats for anti-narcotics and anti-smuggling missions, as well as aircraft munitions, night-vision goggles, upgrades to coastal surveillance systems, communications equipment, and de-mining equipment. In July 2006, according to the Defense Security Cooperation Agency (DSCA), Oman bought the JAVELIN anti-tank system, at a cost of about $48 million. Some major U.S. sales to Oman are expected as part of an estimated $20 billion sales package to the Gulf states under the U.S. “Gulf Security Dialogue” intended to contain Iran, although most of the sales notified thus far are to the much wealthier Saudi Arabia and UAE. One potential Omani purchase discussed by observers is the U.S.-made C-17 “Globemaster” transport aircraft. Oman is eligible for grant U.S. excess defense articles (EDA) under Section 516 of the Foreign Assistance Act. It received 30 U.S.-made M-60A3 tanks in September 1996 on a “no rent” lease basis (later receiving title outright). There have been minor EDA grants since 2000, particularly gear to help Oman monitor its borders and waters and to improve inter-operability with U.S. forces. In 2004, it turned down a U.S. offer of EDA U.S.-made M1A1 tanks. Some Omani officers say they need new armor to supplement the 38 British-made Challenger 2 tanks and 80 British-made Piranha armored personnel carriers Oman bought in the mid-1990s. U.S. security assistance to Oman not only helps finance equipment purchases, but it also, through the International Military Education and Training program (IMET) program, promotes U.S. standards of human rights and civilian control of military and security forces. The United States phased out development assistance to Oman in 1996. At the height of that development assistance program in the 1980s, the United States was 3 Section 564 of Title V, Part C of the Foreign Relations Authorization Act for FY1994 and FY1995 (P.L. 103-236) banned U.S. arms transfers to countries that maintain the Arab boycott of Israel. As applied to the GCC states, this provision has been waived each year on the grounds that doing so wasis in the national interest. CRS-4 States was giving Oman about $15 million per year in Economic Support Funds (ESF) in combined loans and grants. The funds were used mostly to improve in loans and grants, mostly for conservation and management of Omani fisheries and water resources. Table 1. Recent U.S. Aid to Oman (In millions of dollars) IMET 0.5 0.75 0.825 FY2005 (estimated) 1.1 FMF NADR 25 80 24.85 0.4 19.84 0.4 FY2002 FY2003 FY2004 FY2006 (request) 1.1 20 0.5 FY2003 IMET FMF NADR (ATA,EXBS, and TIP) 0.75 80 FY2004 0.825 24.85 0.4 FY2005 1.141 19.84 0.554 FY2006 1.135 13.86 0.4 FY2007 1.135 14.0 1.284 FY2008 (est.) 1.42 4.712 2.089 FY2009 (request) 1.45 12.0 0.95 Note: IMET is International Military Education and Training; FMF is Foreign Military Financing; NADR is Nonproliferation, Anti-Terrorism, De-Mining and Related Programs (ATA is Anti-Terrorism Assistance; EXBS is Export Control and Related Border Security; TIP is Terrorism Interdiction Program). Democratization and Human Rights5Rights4 Oman, which has a population of 2.36 million (including about 550,000 foreigners), remains a monarchy in which decision-making still is largely concentrated in the office of of Sultan Qaboos. Believing that Omanis would ultimately demand political reform, in the 1980s, Qaboos embarked on a long-term program of gradual political liberalization, even though he was not under evident popular pressure to do so at that time. In November 1991, Qaboos established the 1980s, Qaboos embarked on gradual political liberalization. In November 1991, he appointed a 59-seat Consultative Council (expanded to 83 seats in 1993), to replace a ten-year old purely appointive advisory council. In September 2000, the first direct elections were held to the Consultative Council, which serves a three year term, but the electorate was limited to 25% of all citizens over 21 years old. The year 2000 process contrasted with the 1994 and 1997 elections in which a small electorate chose two or three nominees per district and the Sultan then selected final membership. In November 2002, Qaboos extended voting rights to all citizens, male and female, over 21 years of age, beginning with the 2003 Consultative Council elections. Those elections, held on October 4, 2003, resulted in a Council similar to that elected in 2000, including the election of the same two women as in the previous election (out of 15 women candidates). Like the other Gulf states, formal political parties are not allowed. Unlike Bahrain or Kuwait, there are no evident groupings or factions within the Consultative Council. The Council also lacks binding legislative powers. In November 1996, Qaboos made the “legislature” bicameral. In his “Basic Law,” providing for individual rights, he established an appointed State Council to serve, in part, as a check and balance on the elected Consultative Council. Together, the State Council and the Consultative Council constitute an “Oman Council.” The State Council has 57 seats, up from the original 53 seats. State Council appointees tend to be somewhat older than the members of the Consultative Council; many State Council members are former 5 Some of the information in this section is taken from the State Department report on human rights for 2004 - country report on Oman. Released February 28, 2005. CRS-5 government officials. Qaboos has gradually increased the number of women on the State Council; there are now eight. Some aspects of Islamic tradition in Oman discriminate against women, as is the case in most other Islamic countries; for example, male heirs are favored in adjudication of inheritance claims. Sultan Qaboos has given major speeches on the equality of women and their importance in national development, and they now constitute about 30% of the work force. In March 2003, he named a woman to the rank of minister, bestowing that rank on an appointee in charge of the national authority for industrial craftsmanship. He has since added three female ministers — of higher education, of tourism, and of social development — in March, June, and November 2004, respectively. In April 2004, Qaboos made five women among the 29 appointees to the public prosecutors office, making Oman unique in the Gulf for appointing women to the judiciary. The 1996 Basic Law affirms Islam as the state religion, and the State Department’s International Religious Freedom Report for 2004 (released September 15, 2004) notes some restrictions on religious rights, in practice. Non-Muslims are free to worship at temples and churches built on land donated by the Sultan, but non-Muslims may not publish religious materials in Oman. Members of all religions and sects are free to maintain links with coreligionists abroad and travel outside Oman for religious purposes. On related issues, press criticism of the government is tolerated, but criticism of the Sultan is not. In April 2005, the government arrested 31 persons accused of conspiring to overthrow the government; they were reportedly pardoned by Qaboos in June 2005. Private ownership of radio and television stations is prohibited, but the availability of satellite dishes has made foreign broadcasts accessible to the public. Workers are not permitted to form or join unions, but they can form representational committees. The State Department report on U.S. efforts to support human rights and democracy (20042005, released March 28, 2005) does not list any U.S. democratization initiatives in Oman during the time frame covered in the report. However, U.S. officials say some U.S. funds, from the Middle East Partnership Initiative and other sources, is being used to fund women’s empowerment programs in Oman. The State Department’s “Trafficking in Persons Report” for 2005, released June 2005, lists Oman as a “Tier 2” country because it is a “destination country” for women and men from South Asia who are trafficked into “involuntary servitude,” and government is not fully complying with minimum standards to eliminate the trafficking. Oman was not placed on any of the three tiers in the trafficking report for 2004. Regional Relations Sultan Qaboos has often pursued foreign policies outside an Arab or Gulf consensus. Oman was the one of the few Arab countries not to break relations with Egypt after the signing of the Egyptian-Israeli peace treaty in 1979. All the GCC states participated in the multilateral peace talks established by the U.S.-sponsored Madrid peace process, but only Oman, Bahrain, and Qatar hosted working group sessions of the multilaterals. Oman hosted an April 1994 session of the working group on water and, as a result of those talks, a Middle East Desalination Research Center was established in Oman. In September 1994, Oman and the other GCC states renounced the secondary and tertiary Arab boycott of Israel and, two months later (December 26, 1994), it became the first Gulf state to officially host a visit by an Israeli Prime Minister (Yitzhak Rabin). Oman hosted a visit by then Prime Minister Shimon Peres in April 1996. In October 1995, Oman agreed with CRS-6 Israel to exchange trade representatives, essentially a renunciation of the primary boycott of Israel, and trade offices were subsequently opened in the respective capitals. However, Oman stopped short of establishing diplomatic relations with Israel, and Oman closed the trade offices after the September 2000 Palestinian uprising began. Oman has not agreed to the reopening of those offices, and there has been no known recent official contact between the two countries. Oman has experienced more evident tension with Yemen than with any other neighboring state; these tensions have led to brief armed border clashes on a few occasions over the past two decades. On October 1, 1992, Oman and Yemen ratified a border demarcation agreement that ended a 25-year border disagreement between them; the demarcation was completed in June 1995. Under the pact, Oman relinquished its claim to a vast area bordering its western Dhofar province. Economic and Trade Issues Oil remains a foundation of the Omani economy, generating nearly 75% of government revenues. However, Oman has a relatively small 5 billion barrels of proven oil reserves, enough for about 15 years, and some press reports say that production at some Omani fields has been declining since 1997.6 Oman exports about 900,000 barrels per day of oil, which is less than 3% of internationally traded crude oil. It is not a member of the Organization of Petroleum Exporting Countries (OPEC), probably because it is too small a producer. However, it is a leader in group of independent petroleum exporting countries that coordinate production and pricing with OPEC. Oman is a small oil supplier to the United States (about 40,000 barrels of crude oil per day). Recognizing that its crude oil fields are aging, Oman is trying to privatize its economy and diversify its sources of revenue. It is investing several billion dollars in a project to produce and export liquid natural gas (LNG), for which Oman has identified large markets in Asia and elsewhere. Oman has about 30 trillion cubic feet of proven gas reserves. The Oman Oil Company (OOC) is coordinating an oil concession in Kazakhstan and an Omani partnership in a Caspian Sea pipeline consortium, and it is part of the “Dolphin project,” under which Qatar is exporting natural gas to UAE (by replacing Omani gas supplies - 135 million cubic feet per day - to the UAE). Oman’s government is encouraging Omani citizens to work in the private sector, and it has funded a high technology industrial park (Knowledge Oasis Muscat) to develop Oman’s information technology sector. The United States has been Oman’s fourth largest trading partner. Oman was admitted to the WTO in September 2000. In November 2004, the Bush Administration announced it would negotiate a free trade agreement (FTA) with Oman (and with UAE). U.S. official statements during the first round of negotiations in March 2005 said that an agreement is expected to be reached by the end of 2005. A second round of talks was held in April 2005its current size of 84 seats in 1993), replacing a ten-year old advisory council. In a move toward a popular selection process, in 1994 and 1997 “notables” in each of Oman’s districts chose up to three nominees, with Qaboos making a final selection. The first direct elections to the Consultative Council were held in September 2000 (three year term), but the electorate was limited (25% of all citizens over 21 years old). In November 2002, Qaboos extended voting rights to all citizens, male and female, over 21 years of age and the October 4, 2003 Council elections – in which 195,000 Omanis voted (74% turnout)– resulted in a Council similar to that elected in 2000, including the election of the same two women as in the previous election (out of 15 women candidates). Like the other Gulf states, formal political parties are not allowed. Unlike Bahrain or Kuwait, there are no evident groupings or factions within the Consultative Council, and Qaboos has constrained the Council’s authority to mostly public works and social benefits issues. It does not draft legislation, lacks binding legislative powers, and some Omanis say the Council’s influence over policy has diminished over time – to the point where many experts now say Oman lags the other Gulf states on political reform. Qaboos appoints the Council president (he appointed a new president in September 2007, replacing a sixteen year incumbent), although the Council chooses two vice presidents. For the October 27, 2007 election, Qaboos allowed, for the first time, public campaigning by candidates. Turnout among 4 Information in this section is from several State Department reports: The Human Rights report for 2007 (March 11, 2008); the International Religious Freedom Report for 2007 (September 14, 2007); and the Trafficking in Persons Report for 2007 (June 12, 2007). See also: Carpenter, J.Scott and Simon Henderson. Democracy in Slow Motion: Oman Goes to the Polls. Washington Institute for Near East Policy, PolicyWatch 1298. October 26, 2007. CRS-5 388,000 registered voters was 63%, including what appeared to be enthusiastic participation by women, but none of the 21 female candidates (out of 631 total candidates) won. In a 1996 “Basic Law,” Qaboos made the “legislature” bicameral by appointing a “State Council” to serve, in part, as a check and balance on the elected Consultative Council. Together, the two bodies constitute the “Oman Council.” The State Council now has 70 seats, up from the original 53 seats. The State Council appointed following the October 27 election has fourteen women, up from nine previously. Qaboos has given major speeches on the equality of women and their importance in national development, and they now constitute about 30% of the work force. In March 2003, he named a woman to the rank of minister, giving that rank to a woman in charge of the national authority for industrial craftsmanship. He has since added three female ministers — of higher education, of tourism, and of social development — in March, June, and November 2004, respectively. In April 2004, Qaboos made five women among the 29 appointees to the public prosecutors office. However, allegations of spousal abuse and domestic violence are fairly common, with women finding protection primarily through their families. Omani women also continue to face social discrimination often as a result of the interpretation of Islamic law and tradition, which, for example, favors male heirs in adjudication of inheritance claims. The 1996 Basic Law affirmed Islam as the state religion, and the State Department’s religious freedom report for 2007 notes no change from the previous year on restrictions on religious rights. Non-Muslims are free to worship at temples and churches built on land donated by the Sultan, but there are some limitations on non-Muslims’ proselytizing or publishing religious materials and on religious gatherings in other than governmentapproved houses of worship. Members of all religions and sects are free to maintain links with coreligionists abroad and travel outside Oman for religious purposes. On related issues, press criticism of the government is tolerated, but criticism of the Sultan is not. In December 2004, the government arrested 31 Ibadhi Muslims on suspicion of conspiring to establish a religious state, but Qaboos pardoned them in June 2005. Private ownership of radio and television stations is prohibited, but the availability of satellite dishes has made foreign broadcasts accessible to the public. The State Department notes progress in improving workers’ rights, in conjunction with the U.S.-Oman FTA. U.S. funds from the Middle East Partnership Initiative have been used to fund civil society and political process strengthening, judicial reform, democracy building and election management, media independence, and women’s empowerment programs. The State Department’s “Trafficking in Persons Report” for 2007 listed Oman in “Tier 3” (down from Tier 2-Watch List the previous year) because Oman does not fully comply with the minimum standards to eliminate the trafficking. Regional Relations Qaboos has often pursued foreign policies outside an Arab or Gulf consensus. Oman is not as wary of Iran as are the other GCC states; Oman has no sizable Shiite community with which Iran could meddle in Oman, and it still appreciates the military help the Shah of Iran provided in helping end a leftist revolt in Oman’s Dhofar Province during 1964 1975. Oman, as do the other GCC states, publicly opposes any U.S. attack on Iran. On Iraq, and generally in line with other GCC states, Omani officials say that the Omani government and population are dismayed at the Shiite Islamist domination of post- CRS-6 Saddam Iraq and its pro-Iranian tilt, and at the inability of the United States to prevent substantial civilian deaths. Yet, Oman has not remitted $3 million it pledged in 2004 for Iraq reconstruction nor has it opened a full embassy in Iraq; both are typical of most of the other GCC states as well. On the Arab-Israeli dispute, Oman was the one of the few Arab countries not to break relations with Egypt after the signing of the Egyptian-Israeli peace treaty in 1979. All the GCC states participated in the multilateral peace talks established by the U.S.sponsored Madrid peace process, but only Oman, Bahrain, and Qatar hosted working group sessions of the multilaterals. Oman hosted an April 1994 session of the working group on water and, as a result of those talks, a Middle East Desalination Research Center was established in Oman. In September 1994, Oman and the other GCC states renounced the secondary and tertiary Arab boycott of Israel. In December 1994, it became the first Gulf state to officially host a visit by an Israeli Prime Minister (Yitzhak Rabin), and it hosted then Prime Minister Shimon Peres in April 1996. In October 1995, Oman exchanged trade offices with Israel, essentially renouncing the primary boycott of Israel. However, Oman did not establish diplomatic relations with Israel, and the trade offices have been closed since the September 2000 Palestinian uprising. Though Oman did not actively pursue reinvigorating the Israeli-Palestinian peace process in 2006 and 2007, Omani officials reached out to regional Arab states and Israeli officials to resolve the Palestinian issue. In an April 2008 meeting, Omani Foreign Affairs Minister Yusuf bin Alawi bin Abdullah informed Israeli Foreign Minister Tzipi Livni that the Israeli trade office in Oman would remain closed until agreement was reached on a Palestinian state. Economic and Trade Issues5 Despite Omani efforts to diversify its economy, oil exports generated 62% of government revenues in 2007. Oman has a relatively small 5.5 billion barrels of proven oil reserves, enough for about 15 years, and some energy development firms say that production at some Omani fields is declining.6 Oman exports about 222 million barrels per year of oil (less than 3% of internationally traded oil), of which about 11.5 million are imported by the United States. Oman is not a member of the Organization of Petroleum Exporting Countries (OPEC), but it is a leader among non-OPEC exporters in coordinating with OPEC. Recognizing that its crude oil fields are aging, Oman is trying to privatize its economy, diversify its sources of revenue, and develop its liquid natural gas (LNG) sector, for which Oman has identified large markets in Asia and elsewhere. Oman has about 30 trillion cubic feet of proven gas reserves. Oman is part of the “Dolphin project,” under which Qatar is exporting natural gas to UAE (by replacing Omani gas supplies, at 135 million cubic feet per day, to the UAE). The United States has been Oman’s fourth largest trading partner. Oman was admitted to the WTO in September 2000. The U.S.-Oman FTA was signed on January 19, 2006, and ratified by Congress (P.L. 109-283, signed September 26, 2006). Oman recently set back Gulf state plans to form a monetary union by 2010 by saying it would not join it. 5 For more information on Oman’s economy and U.S.-Oman trade, see CRS Report RL33328, U.S.-Oman Free Trade Agreement, by Mary Jane Bolle. 6 Gerth, Jeff and Stephen Labaton. “Oman’s Oil Yield Long in Decline, Shell Data Show.” New York Times, April 8, 2004.