VZCZCXRO5539
RR RUEHDE
DE RUEHMS #0350/01 0691948
ZNR UUUUU ZZH
R 101948Z MAR 06
FM AMEMBASSY MUSCAT
TO RUEHC/SECSTATE WASHDC 6044
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEHAM/AMEMBASSY AMMAN 0394

UNCLAS SECTION 01 OF 02 MUSCAT 000350 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/TPP/ATT, NEA/ARPI 
AMMAN FOR EST HUB 
DUBAI FOR ATO 
 
E.O. 12958: N/A 
TAGS: ECON EAGR SENV PBTS PGOV SOCI MU
SUBJECT: GOVERNMENT REINS IN SQUATTERS 
 
 
------- 
Summary 
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¶1. (SBU) The Omani government has taken action in recent 
weeks to remove illegal squatter farms that local tribes had 
built up over the past year in a remote semi-desert area in 
the southern Dhofar region.  The steps were spurred by 
concerns over illicit water usage and the government's 
efforts to better control the fodder crop industry, as well 
as unsubstantiated rumors of possible Saudi involvement.  The 
episode illustrates the pressures to spread Oman's growing 
economic wealth to its furthest corners.  End summary. 
 
------------- 
A Grim Reaper 
------------- 
 
¶2. (SBU) Minister of Agriculture Shaykh Salim al-Khalili 
confirmed in press remarks in early January reports that had 
been circulating for several weeks that the Omani government 
was shutting down squatter farms in the southern Dhofar 
region that had sprouted over the past year.  The squatter 
movement had begun in the semi-desert region around Thumrait 
with hundreds of local residents, primarily from the Bait 
Kathir tribal confederation, establishing fenced tracts 
ranging in size from 200-1000 square meters each.  The 
farmers were lured by the lucrative market for fodder crops 
driven by the Dhofar-centered cattle industry.  Viewing the 
area as their ancestral lands, the local tribes were further 
attracted by the government's efforts to bring electricity to 
the region, and by previous calls by Sultan Qaboos to better 
utilize the barren land around Thumrait. 
 
-------------------------- 
Controlling Water Usage... 
-------------------------- 
 
¶3. (SBU) Hoping the government would ultimately legitimize 
their land grabs, Dhofaris took loans and made sizable 
personal investments on farm machinery and infrastructure to 
establish their farms, and invested considerable labor in 
raising crops.  The farmers also dug unlicensed wells and 
drew heavily on the region's limited water resources. 
 
------------------ 
...Fodder Crops... 
------------------ 
 
¶4. (SBU) While cracking down on illegal land seizures and 
water usage would be motivation enough for swift action, the 
government was further motivated by its take over of a 
separate (and rival) fodder project in the more distant Nejd 
desert region along the Saudi frontier.  The Ministry of 
Agriculture is urging farmers in the northern Batinah region 
(the coastal agricultural heartland of Oman northwest of 
Muscat) and elsewhere to cease planting fodder crops, given 
their huge drain on diminishing water resources in those 
areas, preferring that the Nejd Fodder Crops firm alone focus 
on that sector.  A Ministry official told EconOff February 20 
that the Ministry has enacted a two- to five-year timetable 
for farmers to draw down their fodder crop production.  It 
also has banned the export of fodder crops, while allowing 
industry to import fodder duty-free. 
 
--------------------------------- 
...And Possible Saudi Involvement 
--------------------------------- 
 
¶5. (SBU) Another factor behind the government's actions, 
according to sources in Dhofar, is that local Mahri tribesmen 
informed the Minister of Agriculture and Deputy Governor of 
Dhofar that the squatters were selling their land plots to 
Saudi speculators.  A Dhofari member of the Majlis al-Shura 
(elected Consultative Council) reportedly gave his personal 
assurance to Deputy Prime Minister Sayyid Fahd al-Said that 
this report was false after it had been brought to the 
attention of the Council of Ministers. 
 
------------------- 
The Regional Divide 
------------------- 
 
¶6. (SBU) Public reactions to the government's removal of 
squatter farms were predictably mixed along geographical 
lines.  About 70 percent of the 60-plus messages posted on a 
popular Internet message board praised the government's 
 
MUSCAT 00000350  002 OF 002 
 
 
actions and even advocated punishing the farmers.  (A 
titillating issue, over 6800 visits were made to this topic 
on the message board.)  Many accused the Dhofaris of seizing 
the land and then turning it over to be worked by foreign 
laborers from whom they charged rent (in much the same way 
some northern Omanis run their small businesses). 
 
¶7. (SBU The 30 percent defending the squatters (most of them 
claiming to be from that area) said it was locals and not 
foreigners who were making the formerly barren land 
economically productive.  Reflective of the traditional 
rivalry between Dhofar and northern Oman (played out 
violently in the 1960's and 70's Dhofar Rebellion), some of 
the locals pointedly asked why only northern Omanis were 
named to the board of the government's closed Nejd Fodder 
Crops company at a time when locals were being driven off 
"their" farms.  Meanwhile, approximately 45 Dhofari tribal 
shaykhs convened on January 14 to consider their options 
should the government persist in frustrating their efforts to 
take part in the government's new fodder crop company.  After 
an official in DPM Sayyid Fahd's office had reportedly told 
the shaykhs the matter was being referred to the Sultan, the 
shaykhs have now resolved to wait to take the matter up in 
person with the Sultan during his current tour in Dhofar. 
 
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Comment 
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¶5. (SBU) While Dhofar is hardly a simmering hotbed, and 
plenty of locals knew full well that squatter farming was at 
best a highly speculative venture, some lingering regionalism 
is still felt down south and in other communities believing 
themselves left out of Oman's current economic expansion. 
Despite the huge success of the growing transshipment port in 
Salalah, for instance, Dhofaris resent what they believe is a 
lack of progress (blamed on Muscat) in establishing the 
Salalah Free Trade Zone and its promised job-intensive 
industrial park.  (Although not yet announced, we have heard 
from an authoritative source that a major plastics 
manufacturing plant backed by Saudi and U.S. investors is 
slated for the SFTZ.)  Nevertheless, massive government 
investments for the northern industrial port of Sohar, and in 
major new tourism projects around Muscat, are enviously 
regarded everywhere else in Oman.  With a large government 
surplus and 6 percent growth rate in 2005, the Omani 
government is likely to face increasing expectations to more 
fairly share the wealth, particularly in Dhofar. 
BALTIMORE