A Journey Into The Heart Of The New Silk Road
“Five years ago there was nothing here,” Hamad Said Al Rawahi told me as he drove fast along the freshly paved highway through the desert. He had just picked me up from the side of the road in his shiny black Mercedes. I was hitchhiking — the only form of “public” transport out here.
His use of the word “nothing” to describe the landscape that we were speeding through on the brand new, albeit empty, highway almost defied hyperbole. We were out in the Arabian Desert in Oman, 550 kilometers from Muscat, far, far away from anything approaching metropolitan — or even inhabited, for that matter. The flesh of the earth had been peeled up from this land long ago, leaving behind a parched, brittle skeleton of sand and stone. They call this place Duqm.
“On my first day here I was thinking that I will have my lunch and resign at the same time. Give them my papers,” Hamad said. “I’m not going to stay here, even one day.”
Hamad grew up in a comfortable home in Muscat and thought that coming out here to work in the administration of Oman Drydock would be a key way to advance his career. He was young, ready for adventure, and left his family behind in exchange for the prospect of a brighter future. He ended up in no-man’s-land: a city in the desert that wasn’t even built yet.
Duqm didn’t even have any roads when Hamad showed up, and I can imagine the dread he must have felt when he realized that he’d just committed years of his life to this forsaken place … or perhaps the resentment as the reality of the new city was far from the promotional videos that showed it as some kind of modernist’s dreamland.
But Hamad decided to stay. Why? Simple: he didn’t know what he would say to his family. He didn’t want to let them down. But a few years later he says doesn’t regret his decision, and he now speaks of the place that he’d nearly run from fondly, with a sparkle in his eyes as he talks about what it has become.
“It has totally changed,” he said. “Now we have five star hotels and villas … and other companies. Now there are shops, supermarkets, places you can go and visit.”
Perhaps so, but all I saw was a road, the endless expanse of bare sand, and a row of half-dead trees that some optimist thought would grow here. Where I only saw tracts of desert Hamad saw the raw potential of a very big dream: to build a city from scratch that will one day be two and a half times the size of Singapore, supercharge Oman’s non-oil sector, and challenge Dubai as the economic epicenter of the Middle East.
The Duqm Dream
In 2011, Oman re-imagined a stretch of uninterrupted coastline, a fishing village, and a Bedouin camp or two as a special economic zone that would foretell the future of the country.
“It is a huge industrial city being built out of thin air,” Manishankar Prasad, a researcher who worked on Duqm’s environmental and cultural impact assessments, spoke simply.
The masterplan for Duqm follows the guidelines of transit-oriented development virtually step-by-step. A massive new seaport is being used to seed a massive special economic zone, which in turn is being used as an economic driver for an entirely new multifaceted metropolis. The full gamut of urban offerings will be built in Duqm, one phase at a time: industrial zones, a large refinery, a new airport, education centers, sprawling thickets of modern housing, and a large-scale, 5-star tourism district on the beach.
Ideally, the various projects of Duqm will act in symbiosis: the industries in the special economic zone will create traffic at the port, and these entities will bring in a clutch of settlers who require housing, shopping, entertainment, schools, and hospitals, which in turn will bring in people offering these services, as a population is created from scratch and the inertia is broken. Within the next couple of years, 111,000 people are expected to call this nascent city home.
In this current era of mass new city building, where no less than 200 new cities are being built around the world, Duqm is not necessarily an anomaly. Remote desert expanses all over East Asia, the Middle East, and parts of Africa are being urbanized by all out fiat. Nurkent in Kazakhstan, Aylat in Azerbaijan, New Kabul City in Afghanistan, New Baghdad in Iraq, Rawabi in Palestine, King Abdullah Economic City in Saudi Arabia, New Cairo in Egypt, nine new cities in Morocco, and no less than 12 in Kuwait are currently in the works. While differing in scale and complexity, most of these new city building projects strive for similar goals: to reshape their respective economies and rebrand the country as elite, technologically advanced, economically sustainable — sleek, modern, and international.
While the Duqm plan seems more drawn from dream than reality, the world today is littered with successful examples of this model: Dubai, Shenzhen, Zhengdong, Cyberjaya, Songdo, Greater Springfield, even Buffalo, New York. However, skepticism is still warranted, as in this age of rampant new city building, for every successful new city there’s ten white elephants or otherwise stagnant projects.
Duqm is still in its early days. The basic highway grid has just been paved, the port and dry dock only recently began operating, the oil refinery is getting set to fire up, and its two five-star hotels have just opened their doors.
The Hotel
I didn’t really know where I was going when I got into the car with Hamad. I was just walking down the side of the highway taking some photos when I saw his car coming on the horizon. I had nothing better do to, so I stuck out my thumb. Hamad took me down to the beach at the end of the highway and let me out at the front doors of the Crowne Plaza Hotel — a five-star island of luxury floating in a sea of sand. This is the only real landmark in Duqm, the thing that makes the development seem like an actual place.
On Fridays and Saturdays the hotel is a beacon for Duqm’s higher-level foreign workers. They pour in and hang out by the pool and go for swims on the beach. Other than them, there’s a drizzle of tourists making a one night stopovers between Muscat and Salalah. They come here for the endless beach, which they can pretty much have to themselves.
I walked down to the beach through a gauntlet of flowers arranged along the path. They were bright, radiant, and seemed misplaced — like something that shouldn’t have been there, like a tiki hut in Siberia. As soon as I stepped foot on the sands a giant dog ran up to me. An older white guy was running after it, manically yelling to me in a thick Italian accent that it was okay. People in the Middle East have a tendency to be afraid of dogs, and some manifest this fear with stones.
The guy was from Italy and was the foreman at a construction company who was building bridges around the project area. He was wearing a speedo and had driven his truck right up on the beach. There was nobody around to complain. He had been in Duqm for a little over a year.
“What do you do for fun here?” I asked.
“Nothing,” he replied simply. ” There is nothing here. There is no beer here. There is no alcohol here. There isn’t anything.”
He was laughing, and something about the way he said this almost seemed like he was paying the place an odd sort of compliment.
“After two months that you are living here you kind of perceive some nice place. For example, the beach, the sea. Big fish. Fishermen there. And my dogs,” he continued.
“Are you happy you came here?”
“Yeah. Maybe I’m satisfied from my job. I have been to work in many different countries in the world.”
“This place is pretty different than Italy, huh?”
“It’s another world. It’s another world. But it’s okay. We have a good feeling with all the Omani guy. We are guests. Oman is a good country, the people are very gentle, it’s a quiet place. But, yeah, there are rules that we have to respect.”
This is the heart of what will become Duqm’s tourism district. A string of luxury hotels and resorts are set to be constructed along the virgin coastline, stretching out towards Salalah. They will be connected with canals and pools and gardens. It will be a completely artificial environment copied from the French Riviera and pasted in the desert.
I walked on the beach for a while and then went back into the hotel. It’s walls were of white marble, everything was opulent, illuminated. A worker apologized to me because the nightly belly dance show was canceled because it was a religious holiday. I wondered where these belly dancers came from and how they got lured way out here. The novelty seemed intriguing — women are such rare a sight in Duqm that most places don’t even have female restrooms.
The new industrial future
Duqm is the latest plan to develop and populate Oman’s empty quarter — a mission that has been in the works since the 1980s. Oman is a very imbalanced country in terms of population and economic activity. 70% of the population resides within a thin 250 kilometer strip in the north of the country around Muscat, which leaves over 750 kilometers of coastline virtually untouched — barren land which is now being seen as a canvas for a masterpiece of economic potential.
“Duqm will essentially change the locus of industrial activity from the northern parts of the country,” Prasad explained. “Having this huge geographical expanse with this sparsely populated population density and no industrial activity is really not the way.”
The idea is that the lab-like, masterplanned nature of Duqm will allow for a more liberalized economic environment that could spark more private industry, new types of jobs, attract FDI and foreign talent, while presenting new opportunities to draw young and creative Omanis away from Muscat.
But there is another side of the story: Duqm is Oman’s all or nothing bet on diversifying its economy away from oil and gas dependency. According to the research by the U.S. Energy Information Administration (EIA), Oman has 5.6 billion barrels of known crude oil reserves left. While this is good enough for #21 in the world, it’s nothing compared to Venezuela’s 300 billion barrels or even Canada’s 171 billion barrels. In 2016, the International Monetary Fund predicted that Oman could be one of a host of oil-dependent Middle Eastern countries to soon run out of money.
Oman’s biggest problem is how disproportionately dependent the country is on such relatively scant hydrocarbon reserves: oil and gas accounts for nearly half of the country’s GDP, 70% of exports, and, depending on market value, between 68% and 85% of government revenue.
The impending post-oil era is the proverbial black cloud that is looming over the glittering skyscrapers and bountiful boulevards of cities from Abu Dhabi to Nur Sultan, and Oman is in no way alone in their diversification pursuits. Oil is no longer in-vogue, and countries that are dependent on it, from the Middle East to Russia, are currently scurrying to construct non-hydrocarbon economies from scratch.
“Several dozen new cities are being constructed in the Middle East, mainly to transition away from the petroleum industry to a variety of other industries, including tourism, manufacturing, education, and high tech,” explained Dr. Moser. “Many oil-producing states in the Middle East are eager to globalize their economies and attract international investors, particularly in anticipation of a post-oil world. New cities are a way to jump start this economic transition, and are also seen as a way to start fresh and avoid the entrenched corruption, bureaucracy, and political entanglements of existing cities.”
Hamad is now in his early 30s and is of the young generation of Omanis who have grown up in a prosperous country, never really lacking for anything material, but with the ominous reality that someday the oil could run out and all of this wealth could evaporate as fast as a libation poured out upon the hot desert sand. The choice for Oman is clear: diversify or go back to herding camels.
Strategic location
Erich Rankl, a veteran of Middle Eastern logistics for over a decade and managing partner of Vienna Consulting Middle East, is drinking the Kool-aid. He moved his operations over to Oman from Bahrain earlier this year and is planning on focusing his activities in Duqm. I asked him why.
“When I’m looking at Oman’s development and plans it’s very clear that this sleeping lion woke up and is desperate to lead the region’s logistics market.” With a wry smile he added that he imagines that Duqm could someday supplant Dubai as the economic heartland of the Gulf.
It only takes a brief look at a map to understand Rankl’s optimism. Duqm sits on the Arabian Sea, right outside the mouth of the Persian Gulf, halfway between China and Europe. According to the EIA, the Strait of Hormuz (the narrow waterway leading into the Persian Gulf) is the world’s most glaring oil supply chokepoint. 18.5% of the world’s oil currently flows through this narrow passage through a tumultuous neighborhood with Iran on one side and Saudi Arabia on the other. Duqm will allow the shippers of the world to pull up to the gates of the Middle East without needing to go all the way inside — providing faster, cheaper, and more secure access to one of the most vital regions of the world.
It is precisely the strategic position of Duqm that has attracted the attention of China. Xi Jinping’s Maritime Silk Road — a series of enhanced sea routes between China and Europe and Africa — has been buying up and developing ports in all corners of the world, and Oman has not been left out.
Last year, Oman Wanfang — a consortium of private Chinese companies — staked an 11-square-kilometer, $10.7 billion claim in Duqm’s special economic zone. They pragmatically dubbed their new territory the Sino-Oman Industrial City and aimed to build a slew of mega-ventures here. While the money is not officially coming from the Chinese government for these projects, Oman Wanfang does have the full political support of Beijing, which includes a stamp of approval from the National Development and Reform Commission. This high-level of political support has also greased the path for other forms of Chinese economic assistance in Oman, such as the $3.55 billion loan that Beijing presented to Muscat last year.
From their new Middle Eastern basecamp at Duqm, China aims to further enhance and secure their hydrocarbon supply chain from the Middle East and East Africa while extending the economic and political tendrils of the Belt and Road into fresh terrain. Roughly 77% of Oman’s crude oil exports go directly to China, and the two countries are now deeply interwoven.
While the Sino-Oman Industrial City is China’s slice of the Duqm pie, the new city isn’t a Chinese project overall, as companies from other nations — India, Kuwait, Japan, and South Korea — have also jumped in. In 2018, it was announced that India would be given access to the port and dry dock at Duqm for commercial and military purposes in their attempt to counterbalance the influence of Beijing.
Those who were there before
There is no history in Duqm, but there are people. Approximately 3,000 Bedouin called the place home before the bulldozers arrived. They were mostly fishermen and semi-nomadic herders. Their homes were simple structures, their camels their prized possessions. They are ostensibly living in another time, but an air raid of modernity has been dropped down upon them in the form of a city.
As I was riding with an Omani driver through Duqm I saw a giant, glimmering new town of white, modern buildings rising up from the sands on the horizon.
“What is that place?” I asked.
“That’s a new city,” he responded simply.
“Who lives there?”
“Nobody.”
He told me that it was a town that was built for the local Bedouin who were relocated due to the construction of the port. The houses looked like the ones in Muscat — two stories high with garages and ornate gateways. There was a mosque in the center of town. It looked nice to me, but the local Bedouin had a different take and refused to move in.
“The government built new houses for them but they don’t want to go,” the Omani driver explained without checking his disgust. “They don’t want to move. All they want is their camels.”
“Why don’t they want to go there?”
“They say they want Bedouin houses.”
“What’s a Bedouin house?”
“One here, one there, one over there. You know, scattered. They want places for their camels.”
When back in Muscat I asked Prasad about this.
“They don’t want to stay in accommodation provided by the state because they find it very unnatural,” he said. “But modernity has to catch up with them, and the development paradigm gives them an opportunity to move into the modern economy … whether they like it or not.”
