Companies in Oman struggling with Omanisation targets, survey reveals

Oxford Business Group survey reveals 59% of CEOs advocate reform of labour laws
Companies in Oman struggling with Omanisation targets, survey reveals
As part of its survey on the economy, Oxford Business Group asked around 100 C-suite executives from across the sultanate’s industries a wide-ranging series of questions on a face-to-face basis aimed at gauging business sentiment.
By Gavin Gibbon
Thu 12 Sep 2019 09:17 AM

Business leaders in Oman would like to see labour laws reformed as they struggle to meet the country’s strict Omanisation targets.

That’s one of the findings in the 2019 edition of the Business Barometer: Oman CEO Survey carried out by Oxford Business Group (OBG).

In a sign that business leaders are struggling with the extension of a ban on recruiting foreigners for key roles, 59 percent of those surveyed cited reforms to labour laws as the legislative changes they felt would be most effective in promoting economic growth.

As part of the country’s Omanisation process, the Ministry of Manpower extended a ban on visas for expatriate carpenters, metallurgy workers, blacksmiths and brick kiln workers, for a further six months from July 3 this year.

The latest extension follows the announcement of a visa ban at the end of January 2018 for expatriates in 87 professions across ten sectors, including information systems, engineering, aviation and certain technical professions. It was extended by a further six months in July of that year and again in February this year.

Align public-private sector pay

Billy FitzHerbert, OBG’s regional editor for the Middle East, said: “The authorities are well aware of the need to better align public sector compensation with that of the private sector if this tendency is to be successfully curbed.”

As part of its survey on the economy, the global research and advisory firm asked around 100 C-suite executives from across the sultanate’s industries a wide-ranging series of questions on a face-to-face basis aimed at gauging business sentiment.

Almost half (47 percent) described their expectations of local business conditions as positive or very positive for the coming 12 months, down from 80 percent in OBG’s December 2018 survey. Considerably more business leaders responded favourably to Oman's current tax environment (business and personal), however, with 74 percent describing it as competitive or very competitive on a global scale.

On a separate issue, more than one third (35 percent) of those interviewed described Oman’s efforts to improve the ease of doing business as good, suggesting that the Royal Decrees issued in July approving new laws on foreign capital investment, privatisation, bankruptcy and public-private partnerships will be welcomed by the broader business community.

Regional political volatility remains the top external event that interviewees believe could impact the local economy in the short to medium term beyond the movements in commodity prices, chosen by 64 percent of interviewees, although there were also signs of the growing impact that China is having on the local economy. Demand in growth from the Asian giant was the response given by 12 percent of executives to this question, ahead of protectionism in trade (10 percent).

FitzHerbert added: “The imposition of fiscal reforms in the shape of the so-called sin tax that came into effect in June and the value-added tax, which is now likely to be implemented in 2020, bode well for government efforts to broaden revenue streams, and feed into the government’s wider goals of economic sustainability and a reduced reliance on hydrocarbons revenues.”

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