Globalization by Haroon

Hope you are enjoying the end of summer. No major changes this month. I finally rotated the gold position in the core portfolio to GLDM. Still DCA’ing S&P500, BTC, and ETH. With ETH back above the 7-year moving average just back to normal DCA. And still sitting on a decent amount of T-bills via SGOV. Will likely keep that position large until I’m back in the U.S. next year or if we get volatility will put some of it to work.

A story of globalization by Haroon

It was still dark, those early morning hours where the night has passed but the sun had not yet reclaimed the sky. My fixer, Haroon (not his real name), was already in the land cruiser, engine running, head lights off. He always beat me in despite having a 45-minute drive. I opened the passenger side rear door, juggling gear and espresso, and slid the rifle in its case on the floorboard. Climbing into the passenger seat up front next to him I set the quad shot on the dash then folded the straps on my Rhodesian and set it down against the front of my seat next to my feet.

The Omanis were always amused that I brought my rifle since the most dangerous thing I expect to happen in Oman is my Spanish latte not being hot enough. But with real risks, self-insuring is the only insurance worth having.

Haroon and I exchanged good mornings and we immediately fell into the comfortable silence of men who worked closely together and knew mornings were coffee and contemplation. We were pulling long days, I was running on three hours of sleep, he had to be running on less than two. Haroon had seven kids and despite the unbearable heat, his family did a barbecue last night. Kids are kids everywhere, they like fire and doesn’t matter if its 120 degrees, let’s do a barbecue and wait up for Dad. At least his daughter had texted him she was saving him a plate from her brothers.

We accelerated out of town as the sun climbed, trying to overcome mountains, turning the white houses of Muscat a glowing pink down to the sea. Was one of those mornings you try to memorize and know you’ll miss when you’re done.

After a while Haroon broke the silence, pointing to a stretch of desert to the left, the sea to the right.

This used to all be trees, before my time. Every time I drive my mother out here, she looks at this place and says those were hard days. She used to cut firewood there, then carry it back to the tents over there he said, pointing to a strip of land by the sea. That strip of land now consisted of walled compounds, with landscape lights strategically placed, silently guarding gleaming modern architecture as their floor to ceiling windows overlooked the sea.

Your mother lived in a tent?

Yes Haroon continued, and it would move, they lived here during the winter, but it was too hot in the summer, so they would pack up and move to their land further south or into the mountains, they had several different places that were theirs. Each family had their own place. The rich ones had camels, the poor used donkeys. My mother was very poor before she married my father, she had to carry firewood, didn’t even have a donkey.

No one could live here in the summer, was hot! So hot. And so many mosquitos, everyone would get sick. Haroon shifted in his seat, warming up to his story. Riding around with him was the best part of my job. I loved Haroon story time; it was the real history of Oman as his family lived it. It wasn’t until I was a little boy that people could live here and we would sleep on the roof before air conditioning at night. That was when Sultan Qaboos came, and he modernized the whole country.

When my father was a boy, Haroon continued, he still wore the kanjar. [The kanjar is the large, curved knife carried on the belt that is native to this side of Arabia. The Houthi in the picture above, is holding one skyward.] When my father went out of the city gates, it would be dark, very dark, he had to carry a lantern by hand in order to see. Then Qaboos came, and he brought doctors, built schools, hospitals, electricity, air conditioning, roads, and lights at night. I remember when the doctors came, and they stuck me and gave me medicine so the mosquitos don’t make me sick. My older brother, if you ever meet him, he walks with a limp because he was sick as a boy before Sultan Qaboos.

What year was that, do you remember? I interjected with a sip of espresso.

Haroon thought for a minute, drumming his fingers on the steering wheel while doing 140 kph down the highway. Hmm, 1980 maybe? I was born in 1975 and I was still a small child.

And your mother lived in a tent and traveled with her family based on the seasons as a little girl before she married your father? Was that before Qaboos?

Yes, before Qaboos, in the 1960s maybe?

I felt like I was seeing all of this for the first time. It is one thing to be aware of the idea of globalization, it is another to be listening to Haroon tell stories about his mother living as a nomad in a tent with their flocks, carrying firewood and traveling with the seasons on camels and donkeys in the mid 20^th century and looking out the window at a 5-star hotel built on the same stretch of beach today. Or his older brother walking with a limp since western medicine had not yet arrived in the 1970s and Haroon, a man now in his 50s, still remembering the American doctors fondly who showed up in 1980 as part of the Sultan’s modernization effort and gave him a shot to protect him against disease the mosquitos carried.

In less than one lifetime globalization helped a place go from being unlivable in the summer to now being over $1,000 a night for a suite. But it didn’t just happen. The modern architecture here next to the ocean, the six-lane highway, the lights, hospitals, infrastructure, it all started in a bloodless coup when Sultan Qaboos overthrew his father, backed by the British, unhappy about losing their position in Yemen.

The money flowing into Oman then really ramped up when the U.S. lost their position in Iran in 1979 when Iranians overthrew the Shah who the U.S. had used to overthrow their democratically elected Prime Minster in a 1953 coup backed by the CIA and Britain to restore their oil interests. In came the money and doctors in 1980 that Haroon remembers giving him medicine to protect against the mosquitos and an entire country modernizing since the U.S. lost their position across the Strait of Hormuz in 1979.

If there was one lesson from globalization I thought, it is to position yourself where the money is flowing. As Eric Peters at One River Asset Management once said, the best alpha is the right beta. 

From the Iraq Oil Embargo to Operation Economic Chokehold