Muscat, Oman - Oman's late ruler Sultan Qaboos Al Said has been lauded for the mediating role he played between conflicting parties in the Gulf region during his near-50 year rule, which also saw the emergence of an educated middle class in the country.

Qaboos, who died on Friday according to Omani state media, came to power in 1970 in a palace coup against his father.

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He used the country's oil revenues to build state institutions and develop infrastructure but struggled in the last years of his life to diversify Oman's economy and reduce its dependence on the same hydrocarbons that had fuelled Oman's ascent in the decades before.

The new sultan, Haitham bin Tariq, named by Qaboos in a letter opened following his death, will now have to undertake serious economic reforms to safeguard Qaboos's legacy and maintain internal stability, analysts have said.

At the same time, bin Tariq will be in charge of upholding the country's foreign policy - which can be summarised as "an enemy to no one and a friend to all" - amid a polarising conflict in the region.

"A neutral Muscat able to pass messages and facilitate dialogue is more important today than ever, given the acute tensions between the US and Iran that so nearly caused a new conflict in the final days of Sultan Qaboos's life," Kristian Coates Ulrichsen, a fellow at the Rice University's Baker Institute for Public Policy who studies the Gulf, told Al Jazeera.

During his last three years, Qaboos was visited by diametrically opposed leaders including Israeli Prime Minister Benjamin Netanyahu, Palestinian President Mahmoud Abbas, Iranian President Hassan Rouhani and US Secretary of State Mike Pompeo.

Condolences poured in from current or former top international officials following Qaboos's passing - a testament to his command of international relations that will weigh on the shoulders the new sultan.

Gulf diplomacy

In his inaugural address, bin Tariq pledged to stay the course on the country's foreign policy and continue to "assist in resolving disputes peacefully".

This stance has in the past caused friction between Oman and its Gulf neighbours, the United Arab Emirates and Saudi Arabia, especially on issues related to Iran and Qatar.

The late Sultan Qaboos bin Said Al Said, right, was lauded for his skills in diplomacy and willingness to meet leaders from all sides including Israeli Prime Minister Benjamin Netanyahu, left, who visited Oman in October 2018 [File: Hamid Al-Qasmi/EPA]

Riyadh and Abu Dhabi have sought to push back against growing Iranian influence in the region and have blockaded Qatar since 2017, alleging the small peninsular nation was funding terrorism.

Oman has kept lines of communication open with Iran since before the current government took over in the Islamic Revolution of 1979, and refused to take part in the Qatar blockade.

"It is well-understood that the UAE and KSA (Kingdom of Saudi Arabia)... have strong interests in influencing the decisions of Oman's foreign policy," Nabeel Noweirah a research associate at the Gulf International Forum, a Washington- based think-tank, told Al Jazeera.

But Ulrichsen said a recent openness to dialogue in Abu Dhabi and Riyadh may reduce the pressure on the new sultan to pick a side.

"[Oman's] ability to make connections and pass messages has caused friction in Riyadh and Abu Dhabi in the past, but the recent shift towards diplomatic engagement in both capitals means there may be less discord over Oman-Iran ties than might have been the case a year or two ago," Ulrichsen said.

Added to the smouldering divisions around Oman, bin Tariq will have to deal with a growing economic crisis at home.

Sluggish growth and low oil prices in recent years have led to a series of unbalanced budgets with increasingly large deficits.

This has spurred unsustainable borrowing, earning the country one of the worst credit trends in the region.

Economic focus

Neil Quilliam, Middle East fellow at Chatham House and CEO of Castlereagh Associates Consultancy, told Al Jazeera the choice of bin Tariq, an Oxford-educated holder of several government portfolios, showed an intention to put the economy first.

Bin Tariq has "more of the attributes needed to face Oman's challenges" than other people who were thought to be in the line of succession because he served at the head of a committee in charge of implementing a 20-year development plan, Oman 2040, Quilliam said.

This is in addition to his extensive foreign affairs experience gained during nearly 20 years at the foreign ministry.

Many had speculated that Qaboos's first cousin Asaad bin Tariq, who has served as Qaboos's special representative and deputy prime minister for external relations and international cooperation since 2017, would be picked.

The choice of Haitham bin Tariq over Asaad bin Tariq - who has more military expertise - shows that Qaboos gave "pre-eminence to economic credentials for choosing a successor", Quilliam said.

Failing to address the country's economic woes could "exacerbate current public discontent, threatening to foment dissent and demonstrations that could destabilise the state", he added.

But, for now, it is likely the vast majority of Omanis are behind the new leader, largely due to the legitimacy bestowed on him by the fact that he was selected by Qaboos, who many Omanis see as a father figure beyond reproach.

"It's likely that Omanis of all backgrounds will come closer together, at least initially," Ulrichsen said. "The fact that Haitham bin Tariq is Sultan Qaboos's own choice as successor gives him a degree of legitimacy that may give him space while he builds legitimacy based on performance."