OPINION: In the drive for Omanization, expats' contributions should not be ignored

OPINION: In the drive for Omanization, expats' contributions should not be ignored
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Published January 11th, 2016 - 08:45 GMT via SyndiGate.info

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The Ministry of Manpower plans to tighten employment visas of expatriates this year to encourage Omanis to fill the vacancies left by foreign workers. (Shutterstock)
The Ministry of Manpower plans to tighten employment visas of expatriates this year to encourage Omanis to fill the vacancies left by foreign workers. (Shutterstock)

Oman’s recession will probably last the whole of 2016, but the Sultanate must retain its backbone in the form of its expatriate workforce for the economy to stand any chance of revival.

This is not the time to reinforce the Omanisation process, but it is a challenging time to endure economic hardship and keep all resources intact. With oil prices at their lowest level since July 2014, the government’s actual revenues are expected to drop by as much as 60 per cent this year, compared with last year.

But it is wrong to predict doom and nail the problem in the petrochemical sector. Oman has other resources to tap into. The country must learn from countries, such as Iran, that have managed to remain afloat in troubled waters and through a decade of crippling sanctions. Iran adapted quickly and learned to hold on to its resources.

This is the time when Oman must look deeper and tap into its natural wealth, other than its oil resources, such as mining, farming and fisheries. Tourism is vastly under developed and so is property development.

Manufacturing, after the hype of the 1980s, has never really taken off. The retail business is another area that enjoys a lot of lip service, but not in practical terms. Financial cut backs are important during the recession, but the efforts should be concentrated on wastefulness and not on essential services. Expatriates must not only be encouraged to stay, but more of them are needed for diversification in areas other than oil for the expansion of the economy.

Expatriate job losses to hit Omanisation drive

Data showed that about 1.8 million expatriates live in Oman and if just 30 per cent leave the country in the coming months, as is envisaged now, the move will take away the purchasing power of the local markets of over half a million people.

Since most of these expatriates live in Muscat, the retail business in the city will take a severe knock. The absence of thousands of rials of spending in a short time will take recession to a new low, making it difficult to make a quick recovery. It will also have the opposite effect on the Omanisation process. Retail businesses will not be able to employ any new Omani recruits because their profits margins will be severely hit.

The exodus of expatriates will also hit the small to medium enterprise (SME) projects as well.

A reasonably high number of customers of SMEs are expatriates. At the same time, SMEs also depend on expatriates as employees. The Ministry of Manpower is also going to tighten employment visas of expatriates this year to encourage Omanis to fill the vacancies left by foreign workers.

The decision is expected to force a further contraction that will hurt businesses, as well as the country’s own corporate sector. While it is understandable that companies want to keep as few expatriates as possible to cut back expenses, Oman will lose its international appeal. The local corporate houses will also lose the essential expertise that expatriates bring into the country. The latter is much needed in a time of recession to overcome the stagnation of the economy.

One thing that both the private and public sectors must remember is that expatriates have always been an important source of economic development. However, on the side of the coin, expatriates, once they see the net tightening, will voluntarily leave anyway because they see no job security.

The uncertainty will further derail the economy and deepen the recession crisis. It will also undoubtedly send a message to investors that Oman is no longer a destination of business prosperity. That will hurt foreign direct investments and put back years of the government’s efforts aimed at attracting much needed capital.

Statistics also reflect that only a small number of expatriates work in the oil sector. If that is the case, then why should expatriates, who are working in other sectors, bear the brunt of the cut back?

Most of these sectors, such as retail, property, finance and tourism, do not directly depend on the government’s contracts. Whatever happens during the next 12 months, it will be a challenging year for both workers and employers.

By Saleh Shaibany

 
© Muscat Press and Publishing House SAOC 2015

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