VZCZCXRO5596
RR RUEHDE RUEHDIR
DE RUEHMS #0018/01 0061306
ZNR UUUUU ZZH
R 061306Z JAN 08
FM AMEMBASSY MUSCAT
TO RUEHC/SECSTATE WASHDC 9125
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 MUSCAT 000018 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP, EEB/CBA 
COMMERCE FOR ITA THOFFMAN 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD PREL MU
SUBJECT: OMAN CONTINUES TO COURT ASIA 
 
REF: A. 07 MUSCAT 1139 
 
     ¶B. 07 MUSCAT 624 
 
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Summary 
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¶1. (U) Over the course of 2007, the Omani government has made 
significant efforts to strengthen its ties with its Asian 
trading partners.  As an indication of its continuing 
courtship with the region, Oman recently sent a trade 
delegation, led by its Deputy Prime Minister, to Singapore 
and India in efforts to build economic relationships and 
attract foreign investment.  Just before embarking on his 
two-nation trip, the Deputy Prime Minister also received 
business-minded delegations from China and Vietnam.  These 
overtures are indicative of Oman's growing interest in an 
area that receives the lion's share of the Sultanate's energy 
exports and is increasingly seen not only as an attractive 
destination for Omani investment, but also as a source of 
foreign direct investment.  End Summary. 
 
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Reaffirming Ties to India 
------------------------- 
 
¶2. (U) On December 12, Deputy Prime Minister for the Council 
of Ministers Sayyid Fahd bin Mahmood al-Said arrived in Delhi 
on a three-day mission to promote closer bilateral ties with 
India.  The Deputy Prime Minister was accompanied by a number 
of prominent ministers, including those from Foreign Affairs; 
Commerce and Industry; Oil and Gas; Agriculture; and 
Information, as well as the Chairman of Oman Chamber of 
Commerce and Industry and the Executive Director for the 
Omani Center for Investment Promotion and Export Development. 
 An accompanying trade delegation included business officials 
from the Omani private sector, representing firms in the 
banking, manufacturing, service, and oil and gas industries. 
 
¶3. (SBU) Of primary interest to the Omani side was enhancing 
economic ties with India, which accounted for $1.4 billion in 
bilateral trade in 2006. (Note: India was Oman's second 
largest non-oil export market and third largest import 
market.  End note.)  In recapping his visit with the 
Ambassador, Commerce and Industry Minister Maqbool bin Ali 
Sultan commented that India represented a "good fit" for 
Oman, given the historical bilateral trading relationship, 
the number of Indian businesses in Oman, and the prevalence 
of Omanis of Indian descent in the business community.  To 
signify their commitment to working closer together, the two 
governments signed four memoranda of understanding pertaining 
to small and medium enterprise development, educational 
opportunities in the information technology sector, and joint 
investment possibilities that would build upon the 
development of a $900 million fertilizer plant between Oman 
Oil Company and Krishak Bharati Cooperative of India. 
Representatives from Oman and India agreed to look into the 
establishment of a joint investment company with start-up 
capital of $100 million, while an agreement was reached 
between Indian-based Larsen and Toubro, Oman Oil Company, and 
Omani-based Zubair Corporation on the establishment of a $50 
million industrial project in the port city of Sohar. 
 
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Learning from Singapore 
----------------------- 
 
¶4. (U) Prior to his arrival in India, the Deputy Prime 
Minister and the delegation traveled to Singapore, where they 
met with the city-state's president and prime minister, as 
well as members of Singapore's Economic Development Council. 
During the stop, Maqbool signed an investment protection 
agreement with his Singaporean counterpart.  The visit came 
on the heels of more recent sub-ministerial visits to forge 
closer cooperation on a broad spectrum of economic issues, 
including tourism, port infrastructure and telecommunications 
development.  Maqbool noted to the Ambassador that Oman's 
primary interest in Singapore was to learn about its model of 
economic development and gain its expertise and even 
investment in port development and management.  Oman is also 
in discussion with Singapore on a free trade agreement to 
augment its $363 million in bilateral trade for 2006. 
 
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Still Interested in Vietnam 
--------------------------- 
 
¶5. (U) Before departing for Singapore, the Deputy Prime 
 
MUSCAT 00000018  002 OF 002 
 
 
Minister hosted Vietnamese Deputy Prime Minister Nguyen Sinh 
Hung and a delegation of Vietnamese business representatives. 
 While trade between the two nations is relatively small, the 
Vietnamese delegation hoped to build upon a memorandum of 
understanding signed by the Vietnam Oil and Gas Company and 
the Oman Oil Company in May (ref B) regarding Omani 
investment in constructing an oil refinery.  Toward this end, 
meetings with Minister of National Economy Ahmed bin Abdul 
Nabi Macki and Maqbool generated another commitment to 
explore how Oman's Investment Fund could assist in Vietnam's 
development, as well as commitments to look into signing an 
investment protection and double taxation treaty.  The two 
sides also discussed cooperative ventures in the tourism, 
seafood, and maritime services industries, as well as the 
possibility of Vietnamese labor coming to Oman. 
 
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Comment 
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¶6. (SBU) Amidst great media fanfare, the high-level meetings 
signaled Oman's continued interest in forging closer ties 
with its Asian trading partners, many of which serve as 
primary markets for Oman's energy exports.  In fact, over the 
first 9 months of 2007, oil exports to China, Thailand, 
Japan, and Korea accounted for 84% of Oman's total oil 
exports.  In recent meetings with USG officials, Omani 
government leaders have expressed interest in ensuring that 
the Asian economies remain vibrant in the wake of high energy 
prices.  Oman's participation in GCC free trade talks with 
Asian partners will further bolster stronger trade ties, as 
its imports from Japan, India, Korea, and China have already 
risen by 68%, 100%, 78%, and 131%, respectively, from 
2003-2006.  Oman also sees opportunity for investment in the 
growing Asian economies of China and Vietnam.  While mindful 
of its long-standing close relationships with the U.S. and 
the UK, Oman will continue to court Asia, and will use facets 
of its relationship with the West, such as its U.S-Oman Free 
Trade Agreement, as a calling card for attracting more Asian 
investment to the Sultanate.  End Comment. 
 
 
GRAPPO