Small States, Regional Stability and the Muscat Process

By Olga Algayerova: 01-10-2026

The current U.S. military withdrawal from Iraq adds another layer of uncertainty to an already fragile regional security environment in West Asia. Such transitions inevitably create openings that different actors may seek to test or exploit. This is precisely why the Muscat Process is needed now more than ever: to preserve channels of communication and confidence before security gaps become new escalations.

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At a time when international diplomacy is under extraordinary pressure, the proposed Muscat Process – advanced by a Group of Friends of the Process – deserves strong and sustained support. Its value lies not only in the possibility of achieving a particular political agreement, but in preserving channels of dialogue between the Gulf Cooperation Council (GCC) states, Iran and Iraq throughout the entire crisis cycle—from prevention and early warning, through escalation and crisis, to de-escalation, stabilization and, ultimately, political settlement.

The crisis cycle should also be understood as more than a political or security phenomenon. Every major geopolitical crisis generates an economic crisis cycle. Rising tensions increase uncertainty; uncertainty affects investment, trade and financial markets; disruption to energy supplies, transport and supply chains increases costs; and economic pressure can in turn reinforce political instability. Security and economic risks therefore become mutually reinforcing.

In an international system increasingly shaped by competition among major powers, smaller states are sometimes perceived primarily as recipients of international decisions. The Muscat Process demonstrates the opposite: a smaller state can be an important provider of international security and diplomatic stability.

Oman is a particularly compelling example. Its influence does not derive from military power or economic size comparable to the largest global actors. It derives from trust, credibility, consistency and the ability to maintain relationships across political divides. Oman has demonstrated that diplomatic influence can be built through reliability rather than coercion.

This is a significant lesson for the wider international system. Smaller states can sometimes create diplomatic space that larger powers cannot. Major powers often carry strategic interests, alliances and political expectations that can make direct mediation difficult. A smaller, credible and relatively trusted state may have greater freedom to communicate with all sides without appearing to seek dominance.

The big eats the small, but the fast resists the slow

Smaller states can contribute at every stage of crisis:

At the prevention stage, they can provide early-warning channels and maintain contacts that larger powers may find politically difficult to sustain.

During escalation, they can provide discreet communication and help parties explore possible compromises without requiring immediate public concessions.

At the crisis stage, they can serve as trusted intermediaries capable of transmitting urgent messages and reducing the risk of miscalculation.

During de-escalation, they can facilitate confidence-building and help transform temporary pauses into more durable arrangements.

And during stabilization and recovery, they can support the restoration of economic connectivity, trade, investment and regional cooperation.

The economic dimension is particularly important. Geopolitical crises do not remain confined to diplomatic rooms. They affect energy prices, shipping, insurance, investment, supply chains and consumer confidence. The consequences can quickly become global.

For a country such as Oman, located at a strategically critical intersection of the Gulf, Indian Ocean and wider Middle East, regional stability has a direct economic dimension. But Oman’s role goes beyond protecting its own interests. By helping to reduce the probability of escalation, it contributes to the stability of wider trade and energy networks on which many countries depend.

This illustrates an important principle: economic interdependence can be both a vulnerability and an instrument of peace. When countries understand the economic costs of confrontation, shared interests can create incentives for restraint. Diplomatic regional processes can help translate those shared interests into practical cooperation.

The Muscat Process would therefore therefore represent something larger than a particular negotiation. It is an example of how small-state diplomacy can contribute to global governance.

Such contributions are often most valuble precisely because they are quiet, long-term oriented and above all, non-confrontational. 

The broader lesson is that international diplomacy should move from a purely crisis-response model towards a crisis-cycle model combining political, security and economic dimensions. We should ask not only how to respond when a crisis erupts, but how to identify risks earlier, prevent escalation, protect economic connectivity, maintain energy and trade flows, de-escalate confrontation, stabilize affected economies and create conditions for sustainable recovery.

The Muscat Process could embody this approach.

Its strategic value is therefore both political and economic—and its success demonstrates that diplomatic influence does not have to correspond to the size of a country. In some circumstances, the ability to listen, communicate with all sides and create trust can be more valuable than power.

The international community should therefore support the Muscat Process while respecting its distinctive Omani character and its emphasis on discretion. It should recognize Oman not simply as a host or facilitator, but as an example of the constructive role that smaller states can play in an increasingly fragmented international system.

The strategic objective should be clear: prevent crises where possible; manage them when necessary; de-escalate them when they become acute; protect economic connectivity; stabilize afterwards; and use trusted smaller-state diplomacy to keep the door to political settlement open.

In a world increasingly defined by geopolitical fragmentation, the Muscat Process offers an important lesson: small states may not have the power to determine the international order, but they can have the diplomatic capacity to help keep that order from breaking down.

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Olga Algayerova

is a former UN Under-Secretary-General and Executive Secretary of the UN Economic Commission for Europe (UNECE). She previously served as Permanent Representative to the International Organizations in Vienna and as State Secretary at the Slovak Ministry of Foreign Affairs. Olga is Director General of the Global Academy for Future Governance (GAFG).