AMBITION, VISION, AND FRUSTRATION: OMANI COMMERCE

C O N F I D E N T I A L SECTION 01 OF 03 MUSCAT 002112

SIPDIS

DEPT FOR INR/B, EB/TPP, NEA/PI, NEA/ARPI
DEPT ALSO FOR ECA/PE/V/R/N (LMOODY)

E.O. 12958: DECL: 11/30/2009
TAGS: ETRD KTEX PINR EIND PREL KWMN SCUL PGOV MU
SUBJECT: AMBITION, VISION, AND FRUSTRATION: OMANI COMMERCE
OFFICIAL SPEAKS OUT

REF: A. MUSCAT 2030


B. MUSCAT 1993

C. MUSCAT 1991

Classified By: Ambassador Richard L. Baltimore, III.
Reasons: 1.4 (b) and (d).


1. INR/B - please see biographic notes, para 9.

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Summary
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2. (C) A rising mid-level Omani commerce official recently
described the rapid decline of the Omani textile industry,
her experiences within the government, the ill-timed
departure of the Commerce Under Secretary, and her positive
experience visiting the United States on an International
Visitor Program. Exuding confidence and energy, she laments
the lack of younger leadership at all levels of government in
Oman. End Summary.

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Cutting Her Teeth in Industry, Textiles
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3. (C) During the course of an hour-long courtesy call,
Econoff discussed various issues relating to bilateral trade
and ministerial intrigue with Sheikha Khalfan al-Masheikhi,
Director of the Industrial Development Department at the
Ministry of Commerce and Industry. Having worked her way
through the ranks of her ministry for the better part of a
decade, she gained valuable experience in dealing with local
businesses and the economics of regulation. She recalled one
instance where she was proud of having recommended that a
dairy factory be shut down due to lack of hygiene only to
realize how she could of imposed fines and given the factory
a timetable to implement changes before pulling the plug.

4. (C) She now maintains responsibility for the textile
sector in Oman, which she claims has been devastated by
increasing costs and global competition. Of 33 textile
factories in the 1990s, only 15-16 are still operating. She
blames the high cost imposed by Omanization as the cause for
the decline in competitiveness. In discussions with her
counterparts at the Ministry of Manpower, she was rebuffed in
a proposal to mandate only 15 percent Omanization for the
textile sector; instead, Manpower officials sought an
increase to 45 percent. She claims that U.S. free trade
agreements with Bahrain, Jordan, and Morocco are cutting
deeply into Omani competitiveness in the garment industry
with their reduction in tariffs, a claim that we have heard
from other contacts in the business community. One of her
overarching goals is for the Sultanate to adopt a written,
transparent competition policy in line with WTO standards,
which would allow Omani industry to compete without
abandoning its multilateral commitments.

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Protege of Former Under Secretary
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5. (C) Ms. al-Masheikhi clearly misses Ali al-Sunaidi, her
former colleague and mentor who departed his post as Under
Secretary of Commerce and Industry when he was named Minister

SIPDIS
of Sports Affairs in October (ref A). Al-Masheikhi claims
that al-Sunaidi's departure was ill-timed and represents a
"waste of talent," given the many economic challenges facing
Oman. In her view, he would have been much better suited to
take the helm at the Ministry of Manpower, or even the
Commerce Ministry itself.

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Red Tape Woes
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6. (C) Al-Masheikhi scorns the "old-school" bureaucrats
prevalent in the Omani government, who work out of routine
instead of evincing duty or a sense of improving Oman. She
gives the older generation tremendous credit for "building
Oman in just 34 years," but she firmly believes it is time
for the younger, Internet-savvy generation to take the reins.
Al-Masheihki claims that the current DG of Industry, Dr.
Hamad al-Dhahab, fits the "old school" mold, and that the
best "new minds" are occupying only marginal positions in the
ministry and the government. Even simple ideas take
tremendous energy and initiative to succeed, such as her own
"Business Umbrella," a workshop series designed to foster
leadership skills among budding entrepreneurs from across the
Sultanate. She completely revamped the program, which had
been started by a predecessor but had languished from
neglect. Today, all invitations for the Business Umbrella
are delivered electronically, and al-Masheikhi has succeeded
in organizing major teambuilding exercises across the
country. Still, she constantly faces scrutiny from superiors
who question her unorthodox style. In one instance, she
tried to help a low-income woman from the Dhofar region
package and market her incense on the margins of a
conference, earning her a slap on the wrist for doing
something outside of normal "procedures."
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Thoughts on Tourism, Women as Ministers
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7. (C) Al-Masheihki also spoke about her recent disagreements
with actions to spur tourism in Oman. The extensive
renovation of forts and other historical sites in the
Sultanate gall her most. "Why are they restoring things to
make them look new? Why not make small improvements or
preventive maintenance, and then let people come see history,
like they do in Egypt and other places?" she laments. She
believes that the Wahiba Sands (a popular desert destination
some 180 km southeast of Muscat) could be enhanced greatly by
bringing people to see traditional handicraft markets run by
women in Sharqiyah. As for promoting tourism from abroad,
al-Masheikhi insists that institutions such as OCIPED (Omani
Center for Investment Promotion and Export Development) have
not fulfilled their mission to effectively market Oman
overseas. Sounding off on the recent promotion of several
women to ministerial rank, al-Masheikhi criticized the idea
of putting female ministers in place who lack the background
or experience for their jobs. She is concerned that they are
being set up for failure, which will provide fodder for the
critics who claim women cannot handle ministerial jobs.
(Comment: This remark appears mostly directed at the
surprising October elevation of the young college literature
professor Dr. Sharifah al-Yahyai to the post of Minister of
Social Development - refs B and C. End comment.)

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IV Program: Broadening Her Horizons
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8. (SBU) Sheihka al-Masheikhi credits her International
Visitor experience with providing a close-up look at American
society. From August to September 2004, Ms. al-Masheikhi
participated in a program entitled "Young Economic & Business
Leaders: Enhancing Leadership Potential." She noted with
interest the difference between Texas, where people seemed to
take a genuine interest in her background and her modest
Islamic dress, and Washington, DC, where she claimed people
were absorbed with their work and seemed in a perpetual
hurry. She enjoyed seeing rural America, which she compared
to the Omani interior in terms of lifestyle and pace of life,
and she sincerely hopes to pursue a Masters or Ph.D. program
at the University of Texas should the opportunity present
itself.

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Biographic Notes
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9. (SBU) Sheikha Khalfan al-Masheikhi was born in 1969 in
Ibra, located in the eastern Sharqiyah region of Oman. She
currently serves as Director of the Industrial Planning
Department of the Ministry of Commerce and Industry
(1998-present). Previous positions in the Ministry include
stints as Planning Researcher (1997-98); Acting Section Head,
Chemical & Petroleum Products Specification Department
(1994-97); and Chemical Specification Specialist (1994). A
graduate of public schools, she went on to a distinguished
academic career at Sultan Qaboos University, where she
received her BA in Science (Chemistry major, Physics and
Mathematics minor) in 1993. She has participated in numerous
workshops, including two sponsored by the WTO (2000, 2003).
She has two daughters and possesses extremely strong English
skills. Her mother comes from the prominent al-Harthy tribe
in Sharqiyah.


10. (SBU) In her nominating cable for the International
Visitor program, her current work is outlined: "Ms.
Al-Masheikhi conducts training programs for Omani
entrepreneurs in Oman and abroad, leading Omani business
delegations on international visits to learn new industrial
management techniques to apply in Oman. Ms. Al-Masheikhi
also provides advisory services to entrepreneurs on
initiating new businesses, licensing, registration, and
business incentives. Ms. al-Masheikhi also plans and
implements the annual industrial promotion plan, and monitors
and manages the agreement between the Sultanate of Oman and
the U.S. on garment exports. In addition, she drafts and
edits television programs that promote Omani products under
the theme, 'Our First Choice, Omani Products.'"

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Comment
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11. (C) Al-Masheikhi has no problem speaking her mind, and
she obviously brings energy and ambition to her decidedly
non-descript mid-level job. Her comments about a
generational divide within the Commerce Ministry have been
echoed in other government institutions as well. With the
transfer of Ali al-Sunaidi out of the Commerce Ministry, we
will seek to cultivate relationships with proactive and
dynamic figures such as al-Masheikhi as we move forward
briskly in our economic engagement with Oman.
BALTIMORE