Oman, the long term player.

The long coastline of this neat country may have something to do with its long term planning. Oman has built itself up over the last couple of decades, into a well run and steady economy, with little or no effect of the global economic turmoil.

Like its other Middle Eastern brothers, Oman is also heavily dependent on oil for revenues. And expatriates still play an uncomfortably large role in running the various industries and businesses being promoted, through the country. Educating and Training the locals to take over the day to day running of the firms and institutions is a long term goal in which considerable resources and efforts have been invested.

The country’s GDP has been growing steadily, with 2007 being a golden period, when it registered a growth of nearly 13%. The current economic crisis, of course, has not left Oman totally immune. However, it has escaped the worst of the crisis, mainly because of shunning an overtly risky way of doing business, and giving unfettered freedom to the private sector.

That apart, Oman had, in place, a special general reserve fund, that could be relied upon to counter the effects of a fall in the prices of oil, the mainstay of its economy, and revenues. This fund has served Oman well in the period of crisis, and speaks of the vision of its rulers to foresee the problem and to actually be prepared for it.

Whether it is the banking or the insurance sectors, the defence or the civic areas, or the capital markets or the investment areas, Oman has always been long term in thinking and action, and has worked out patiently to improve its standing in the comity of nations.

The economic scene in Kuwait.

Kuwait, a small nation awash with oil. Synonymous with wealth and mega projects. A society part traditional, part modern, and a little part, ultra modern.

The economic meltdown does not seem to have affected Kuwait much, with the economy growing steadily. And concerted efforts at diversification have also helped the country absorb the shocks of an oil glut affecting the major source of its revenues.

None of the other sectors of this tiny oil giant have been affected, like the Banking, Insurance, etc. This testifies to the fundamental strengths of the system. However, the Kuwait capital market did suffer on account of the fall out of the global economic recession, which was to be expected.

On the other hand, traditional Islamic Banking and financial institutions gained considerably in the downturn. In fact, the excesses of the conventional Banks and financial institutions have given a boost to the popularity of the Islamic Banking institutions, who on account of their ethical investment and credit policies have escaped the downturn and indeed set a good example for the conventional Banks.

What does the future hold for the Kuwaiti economy? The major issue affecting the country, of course, is the price of oil. With oil prices coming down for a variety of reasons, like falling demand, non adherence to quotas, development of alternative sources of energy, etc, Kuwait faces the challenge of diversifying its revenues while modernizing and optimizing its traditional oil sector.

The state has invested enormous amounts of money in establishing other and varied sources of economic activity that are slowly showing results. It may be said that Kuwait is well placed to face the challenges on account of its small size and huge revenues. Astute handling of the situation and prudent financial and economic management should see Kuwait emerge through the next decade with flying colors.

Algeria rising.

After nearly two decades of civil strife, the North African country is waking up to its potential as an important economic power in the region. And slowly, if a bit unsteadily, is trying to regain its past economic status, and to surpass it. And it has succeeded to the extent that the World Bank now acknowledges it to be the second strongest economy in the Middle East.

The major source of revenues for Algeria continues to be oil and natural gas, and the country is the second largest exporter of gas in the world. The Government has made efforts at diversification in non-oil manufacturing, etc., but has met with limited success.

However, agriculture, the major economic activity prior to the discovery of oil and gas, continues to play an important role in the lives of the people, though efficiency and low production are said to have stunted the potential of this sector in playing a more vibrant role in giving momentum to economic activity.

The reforms initiated by the Government in recent years have started bearing fruit, with FDI picking up slowly. Further, improvements in the tax regime have contributed to an upbeat economic climate, though there are several that could do with a lot of improvement, and fine tuning. Especially, reforms in the agricultural sector are needed to regain its place as an exporter of food grains.

Other issues that have impacted adversely on the development process are said to be corruption and poor planning in projects. Corruption has denied legitimate and much needed benefits to important sections of the society, while poorly planned and managed projects have created an array of white elephants that are bleeding the economy.

That despite all these problems Algeria has apparently become the second strongest economy testifies to its strong fundamentals and its vast unrealized potential. If the ruling establishment plays its economic cards well, Algeria may yet emerge as a strong and stable economic power in the North African and the larger Middle Eastern area.

GOOD TALIBAN, BAD TALIBAN!

Good Taliban, Bad Taliban!   That is the new Mantra of the new American administration, trying to come to terms with the mess in Afghanistan, and more importantly, trying to negotiate, undeniably treacherous territory.   And the beaten path beckons, especially, when you are not sure.

Historical Perspective:  And just who are the Good and the Bad Taliban?   You guessed it right!   The Good Taliban are those, that support America and the West, and the Bad Taliban are those that oppose the West, especially, America!

In the 1980’s through the 90’s though, there was no such distinction within the Taliban.   There was only one Taliban, and that was the Good Taliban.   Because, they were fighting the Soviets who had occupied Afghanistan, with American assistance.   Of course, the Americans supported the Taliban for their own strategic interests, and not because they sympathised with them for the wrongful occupation of their country, by the Soviet Union.   Another point to be noted here is, that, the Taliban and the Al Qaeda were jointly fighting the Soviets and receiving military and other aid from the Americans.

The Americans did not mind hobnobbing with the Taliban and indeed the Al Qaeda, oh yes, in their determination to give a bloody nose to the red communists!   Ridding the world of Communism was well worth the price of  sleeping with the Taliban and the Al Qaeda.   And what was the rationale and purpose of eliminating the communists from the world political landscape?   Of course, not democracy, freedom and the like.   The Soviet Union stood in the way of America becoming the only Super Power of the world.   Then came the 911 (some say rigged up) and all that followed.

Emerging Scenario:  Now the Americans are up to their old game again.   Old habits…….!   There is talk of identifying, read dividing, the Taliban, read Afghans, into two distinct groups.   The Good and the Bad.   The good being pro-west, and the bad being anti-west.   A divided Taliban would fit in perfectly well with the Western strategy for the region.   The recent compromise of the Pakistan Government with the Taliban in the Swat Valley would appear to be part of this strategy.

Will the Taliban fall for this bait?   Does the Taliban have an inkling about what the United States and its allies, may have in store for them?   Will the United States succeed in dividing the Taliban?   Looking to the continued violence in the Swat Valley, one would be inclined to believe that America and its ally, Pakistan, are still some way away from befooling the Taliban.   The West seems to favor the same strategy against the Taliban, that they had successfully employed against the Palestine Liberation Organisation.   Remember how the PLO was broken up?   Now there are two groups of Palestinians, one good, that are aligned to the pro-west Mahmoud Abbas, and the other, anti-west aligned to the Hamas of Khaled Meshaal.   Once you divide a community into good and bad parts, it becomes that much easier to go after the ‘bad’ ones, the ‘terrorists’, with the added bonus of not being accountable for your actions.   After all, ‘terrorists’ that kill innocent women and children do not deserve our sympathy, do they?   But the fact remains, that, dividing the Palestinians has not brought peace to the the Middle East, and the expected dividends to Israel.

And so the great game goes on.   Only this time, with the West, especially the sole Super Power, beset, as it is, with crippling economic problems, may not be able to play the great game for much longer.

What could be the game plan of America and Pakistan?   To lull the Taliban into a false sense of security and then to make a ‘final assault’ to wipe them out?   In much the same way as the Israelis went after the Hamas in the Gaza, reportedly preparing for the ‘final assault’ during the six month long ceasefire?

View expressed are author’s personal.

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