The Remote Omani Fishing Village of Duqm is 'Rising From the Desert' as China Strategically Invests

Published October 23rd, 2018 - 09:15 GMT
A picture taken with a fish-eye lens shows Chinese investors listening to an explanation as they check the model of the dry dock which is to be built following an economic agreement, on May 24, 2016 in the Omani port city of Duqm. Mohammed Mahjoub /AFP Photo
A picture taken with a fish-eye lens shows Chinese investors listening to an explanation as they check the model of the dry dock which is to be built following an economic agreement, on May 24, 2016 in the Omani port city of Duqm. Mohammed Mahjoub /AFP Photo

Grady McGregor

Just a few years ago, Duqm was a small fishing village in the middle of the southern Omani coastline populated by a few hundred Bedouins. Now, with billions of dollars in investment from Chinese entities and other investors, the Omani government is in the middle of transforming this sleepy, coastal village into a brand-new port city and industrial zone.

The Bedouins were forced to relocate, and apparently had little interest in moving to the new accommodations that the Omani government had built for them. In their place, city planners now expect to welcome 100,000 new residents to the city of Duqm by 2020, and are building capacity for the city to hold a population of up to 250,000.

Wade Shepard, author of Ghost Cities in China, recently travelled to Duqm as part of a larger project he is working on about China’s global ambitions. 

“It’s kind of like something out of a dream, right, like this new city rising up in the middle of the desert.” Shepard told Al Bawaba. “Duqm is a project of almost insane proportions.”

The city already boasts multiple five-star hotels, a recently opened airport, brand new highways and is in the process of building the infrastructure and amenities of a modern, sustainable city. The city also hopes to employ the new residents by constructing a massive port, transportation network, and an industrial zone with the hope that Duqm will become an important global commercial center.   

 

The Duqm city and port project has been in large part supported by Chinese investors. The Oman Wanfang investment group, a consortium of six Chinese firms, has been the largest foreign supporter of Duqm’s reform, announcing plans to invest up to 10.7 billion dollars into the city.

The Chinese government views the project as a critical element to China’s Belt and Road Initiative (BRI) in the Middle East. But as these investments into Duqm come to fruition, questions will remain about China’s motivations in the endeavour: is this the benevolent, peace-building project that China describes, or are there other political and militaristic ambitions at play?

China's Belt and Road Initiative 

While China and Oman have relations that date back thousands of years, the two sides established official diplomatic relations in 1978. In recent years, China and Oman have grown increasingly close as China has become the major export market for Omani oil, a central driver of Oman’s economy. As recently as last August, Oman exported over 80 percent of their crude oil to China.

To commemorate the 40th anniversary of the relationship in May, the two sides signed a Memorandum of Understanding (MoU) to officially include Oman in China’s Belt and Road Initiative (BRI). The BRI, unveiled in 2013 by President Xi Jinping, is a trillion-dollar plus policy aimed at connecting China over both land and water with central Asia, the Middle East, Europe and Africa via massive investments into the infrastructure and economies of over 70 countries.

 

Under the MoU, the two countries plan to place further investments and projects under the BRI framework in order to “synergize their development strategies and focus on cooperation in such areas as exploitation of energy resources, chemical industry, manufacturing and marine industries,” according to Xinhua News.

Jonathan Fulton, Assistant Professor of Political Science at Abu Dhabi’s Zayed University and writer of the recent book China's Relations with the Gulf Monarchies told Al Bawaba, “(Duqm) is a great project for Oman at a time when it’s economy has been pretty shaky.” 

On the Chinese side, Fulton notes, “Oman and Duqm, are a key part of a new economic strategy that China is putting together for MENA.” In addition to providing more convenient trade routes and helping improve trade relations between the countries, Fulton said, “Oman is geostrategically located in such a way that it provides an alternative access point to the Arabian Peninsula that bypasses the Gulf and the security risks inherent there.”

Chinese investors pose for a picture in the land where an industrial city, including an oil refinery, is due to be built following an economic agreement, in the port town of Duqm. (AFP)

In terms of how the project is actually playing out in Duqm, Shepard said that the Chinese portion of the city, called the Sino-Oman Industrial City, is noticeably separate from the rest of the project. The Omani government has also been partnering with countries like Korea and India in building other port projects, tourist zones and residential areas in Duqm.

“They have this giant area sectioned off as the Chinese section of Duqm,” Shepard said. “But nobody really knows what’s going on (there) … when I asked (Duqm administrators) they said that’s just something China is doing, they have their Belt and Road strategy.”

From this plan provided by Oman Wanfang and the Port of Duqm, we do know that the Sino-Oman Industrial City is constructing a heavy-industry park with an oil refinery, power plant, cement factory and other mineral processing facilities; as well as a light-industry park, which will include a residential zone, with e-commerce, solar, and other factories and assembling plants. China will also have commercial port access in addition to building a five-star hotel, fit with what the report calls ‘Chinese elements.’

In addition to the questions around what else is going on inside the Sino-Industrial City, information about the Chinese investment consortium Oman Wanfang has been similarly shrouded in some mystery.

 

We know that the Oman Wanfang investors come from Ningxia, China, a province in the north, central part of China that is largely populated by Hui muslims. Yinchaun, the capital of Ningxia, hosts an annual China-Arab States trade fair, which could help explain some of the ties between the group and the Omani government.

“The provincial government, and the Ministry of Commerce and the National Development and Reform Commission (which is central to the BRI) have both promoted Oman Wanfang’s Duqm project, but it’s not clear to me how deep the relationship is with the central Chinese government,” Fulton said.

According to Oman Wanfang’s Chinese-language website, the group was founded in 2015 and they describe the Duqm project as a direct “response” to the Chinese government’s call for BRI projects abroad. Thus, while Oman Wanfang is technically a private entity, it seems fair to characterize their actions as closely tied to the actions of the Chinese central government.

Military and Political Ambitions at Duqm?

China is wielding their new economic clout in Oman to advance at least some political objectives. The BRI deal between Oman and China includes provisions for Oman to fully support China’s ‘One China Policy,’ and China’s stance on “issues concerning Taiwan, Xinjiang, Tibet and the South China Sea,” according to Xinhua News. This is not an insignificant development for a Muslim country such as Oman, especially as international pressure rises on China’s treatment of the muslim Uighur minority in Xinjiang, as Al Bawaba has reported on extensively.

There are also growing concerns that China’s investment into Duqm was ultimately driven by an ambition to use the project as a potential future military base. The basic idea behind this view is that China makes massive investments into ports and other projects through the BRI, riddles countries with large amounts of debt (debt-trap), and uses this leverage to take over ports and use them for their own, often militaristic, purposes.

James Dorsey, a senior fellow at the S. Rajaratnam School of International Studies at Singapore's Nanyang Technological University, spoke to Al Bawaba about his skepticism for BRI’s prospects in the Middle East. “In many ways the BRI has neo-colonial aspects, you are already seeing countries in debt-traps,” Dorsey told Al Bawaba news.

The ‘String of Pearls’ theory, coined by the US government defence contractor Booz Allen Hamilton in 2005, argues that China has long had a plan to expand their naval presence in the Indian Ocean through gaining more and more access to civilian ports. Many of China’s BRI projects are still viewed largely in these terms by much of the US foreign policy community. 

Adherents to this theory often point to China’s Hambantota Port project in Sri Lanka, where the Chinese-financed port was eventually given over to China couldn’t pay back Chinese loans. China has since been using the port for military purposes.

Like Duqm, Hambantota was a small, fishing village before the government decided to develop a massive port project on the land. According to Shepard, however, the fact that Oman has a much more stable political environment and is working with a number of international investors will ensure that the Duqm project will not reach the same fate as Hambantota Port.

“Countries that show a heightened pivot towards China are usually countries that have fundamental political and economic issues,” Shepard said. “(Duqm) also has a massive amount of investment from India and other countries … the different powers balance each other out.”

Fulton agrees that the situation in Duqm is much more complicated, and that purely viewing Duqm and the BRI through the lens of ‘String of Pearls’ is a limiting and Washington-centric point of view. 

“The ‘String of Pearls’ is an interesting way of looking at China’s port projects, but this phrase came from an American think tank and reflects Washington’s view of China’s Indian Ocean strategy more than Beijing’s perception,” Fulton said. “Duqm is a strategically important project for China and Chinese firms, and it has long-term consequences that reflect the importance both Oman and China place on the bilateral relationship.”

Shepard also pointed to the fact that India, not China, was the first foreign navy to gain access to the port as evidence that the Chinese military doesn’t necessarily have full control of the situation in Duqm. In the much of the Indian press, as well as in international outlets, the move was framed as a direct counter to China’s growing influence regionally. An article from the Times of India stated in February, “India’s presence in Duqm is crucial as a security checkmate, giving India the ability to cut off China at the mouth of the Gulf of Oman.”

Regardless of how militaristic China’s ultimate designs in Duqm are, it is worth watching whether China’s growing influence in Duqm and regional ports prompts a further arms race internationally. In addition to the Indian Navy access to the port, the United States and Britain have already held military exercises in Duqm.

While acknowledging potential complications, Shepard believes that Duqm’s potential importance to the future of Oman and the Middle East cannot be underestimated. “(Oman) has the political will, the political reason and the money to make this project a success,” Shepard said. “Duqm is really the future of Oman.”


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Grady McGregor is a digital journalist working in Amman, Jordan. McGregor is a fluent Mandarin speaker currently researching the Belt and Road Initiative and China's diplomatic and economic presence in the Middle East.

The views expressed in this article do not necessarily reflect those of Al Bawaba News.


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