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Fri 8 Feb 2013 09:44 AM

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Oman set to limit number of foreign workers

Government will also sharply raise minimum wage for locals in bid to increase jobs

Oman set to limit number of foreign workers
(Photo for illustrative purposes only)

Oman's government will limit the number of foreign workers and sharply raise the minimum wage for locals in a drive to increase employment of Omani citizens, state news agency ONA reported.

A statement by the Council of Ministers, carried by ONA and seen by Reuters on Thursday, said the government would aim to limit foreign workers to 33 percent of Oman's total population.

The minimum monthly wage for Omanis in the private sector will jump to 325 rials ($845) this July from the current 200 rials, ONA quoted the council as saying.

Despite its oil wealth, the government is keen to move more Omanis into private employment to avert social unrest and prepare the economy for an eventual fall in oil reserves, which could start later this decade.

Since 2011, there have been sporadic street protests to demand more jobs. The International Monetary Fund estimates unemployment among Omani citizens may have exceeded 20 percent in 2010, though government officials say that estimate was far too high and that the number of registered unemployed was reduced by three-quarters to about 17,000 last year.

The new measures, which are subject to review by the government's Shura Council, could have a major impact on the economy, though in practice authorities may implement them cautiously to avoid disruption.

Around 1.3 million or 39 percent of the population of about 3.3 million are foreigners, most of them workers brought in to do skilled or strenuous jobs in the oil, construction and services industries, according to official data last year. Most are from south or southeast Asia.

Oman's ruler, Sultan Qaboos bin Said, has acknowledged that large numbers of foreign workers are needed for industrial development and construction of a national railway. It would be impossible to find local replacements for many of these workers in the foreseeable future.

So a sudden mass expulsion of foreign workers looks unlikely. The Council of Ministers did not specify a deadline for the 33 percent target to be hit.

But the rise in the minimum wage could affect many businesses in the near term. The Times of Oman quoted the Public Authority for Social Insurance as estimating over 122,000 registered employees would receive higher pay.

The Oman Society of Contractors, the umbrella body for construction firms in the country, asked the government to reimburse companies for additional costs incurred because of the wage hike, the newspaper reported.

The Council of Ministers identified mechanisms that could be used to boost employment for Omanis, including revising the foreign investment law to stop unnecessary recruitment of foreign workers, and changing procedures for registering companies, ONA said.

A team of government agencies will be formed to submit progress reports on moving Omanis into private sector jobs, it added.

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Qatari 7 years ago

Congrats to the Omani people and the government. I hope one day we would limit the foreign workers in the GCC to 30%. Benefiting our brothers in our neighboring countries rather than the whining pro-alcohol foreigners.

Red Snappa 7 years ago

Emirati employees wage hike in UAE private sector, in the offing perchance? Percentage of foreigners that make up the country's population virtually 90% according to recent estimates.

Were this to occur it would either squeeze margins or raise prices, and once again there are high volumes of foreigners performing jobs in private firms, that indigenous citizens would simply not be prepared to do, most certainly in the general contracting and construction sectors.

jon 7 years ago

i agree with what 'Qatari' posted, this will be very benefitual to our countries and to our arab neighbours countries

Sonny 7 years ago

Qatari, are you and your countrymen ready to sweep roads, clean toilets and sweat it out in construction projects. Why don't you try donning their hats for 1 day this July and then lets talk.

Wadi 7 years ago

Whilst, as a European working in the Gulf, I find your comments rather bizarre.

You are suggesting that every non Arab is pro alcohol and tarring thousands of people with the same brush.

Firstly, you should see the nationalities that frequent some of the bars I have visited. Perhaps then, you would think before making such a childish outburst.

Secondly, please don't be under the illusion that every 'expat' enjoys being in this part of the world. Take in to account internal transfers and the like.

Thirdly, and perhaps the most valid point, might I suggest you consider why this part of the world needs so many foreign workers.

Henry 7 years ago

...at least there will be space on the highways and hopefully the malls will be less crowded on Fridays

Solo 7 years ago

'Qatari' you barely make 30% in your own country, what planet do you live in?

Bong 7 years ago

All cleaning is done by expatriate workers !! All restaurants are operated by expatriates !! What is the future for this country ?

Ali 7 years ago

Strongly Disagre with Qatari.
If locals at GCC had the will to work instead of depending on others,they would have done so.
If foreigners can seize the opportunities in GCC with all the restrictions imposed on them, then it should be a peice of cake for the locals or gcc arabs.

We muslim people have lost our effecieny and love to go forward

Qatari 7 years ago

That jobs we could keep for the 30% foreigners. Thanks for contributing.