Creating Employment Avenues

The Sultanate is making all efforts to promote higher education and private enterprise so that employment prospects continue to brighten

The rapid economic growth driven by increased investment on the back of high oil prices is seeing the private sector playing an increasing role in providing employment prospects for Omani job seekers.

On the occasion of his annual speech celebrating the Renaissance in November, Sultan Qaboos paid special attention to private sector employment by mentioning his delight at seeing a growing tendency among Omanis to take jobs in various fields. He also devoted a part of the speech to higher education, emphasising the importance of the role of the private sector in this regard, which he said had enabled higher education to spread through the region.

The state remains the country’s largest employer–a total of 132,000 in 2005. However, as illustrated by figures from the Ministry of National Economy, the number has grown only slightly over the past three years. The drive to privatise and digitalise government services will almost certainly coincide with an end to any future large-scale state employment projects.

Employment of Omanis in the private sector has increased by 10.2 per cent according to the latest figures from the Public Authority for Social Insurance (PASI). By the end of August, it totalled 108,604. However, it still is well under a fifth of the total private sector labour force. The Ministry of National Economy reported a total of 476,956 registered expatriate workers at the end of August this year.

Their number has also grown even faster than the employment of Omanis at 12.3 per cent in the first eight months of the year–an increase of 52,000 employees or an average of 6,000 additional expatriate workers per month.

About 75 per cent of the expatriate labour force has an educational level of preparatory education or less and is engaged in low wage, low skilled labour. However, one of the fastest growing expatriate segments is university graduates with a 20.4 per cent increase in the first eight months of the year. Higher education thus plays a central role in encouraging employment of the local workforce and, as highlighted by Sultan Qaboos, the Sultanate is pursuing the track of privatisation to provide for this.

Promoting enterprise is another way to ensure employment for Omani nationals. The traditional employment track since the ascension of Sultan Qaboos has been to seek government work, mostly because of its stability and favourable conditions. Through government and private sector support, some strides were taken this year in developing entrepreneurship opportunities.

Innovative Models
The oldest established programme is Intilaaqaah, a Shell-sponsored entrepreneurship education programme modelled on the live-wire programme, which started in Oman in 1996. From only 20 trainees in 1996, the programme today caters to more than 400 trainees in different courses.

The government has also been involved in promoting entrepreneurship through the Sanad programme, a publicly funded programme that provides start-up capital for entrepreneurs.
In August, the financing ceiling was raised to RO20,000 (US$52,000) to allow the setting up of joint projects involving two to four people. This was a significant increase from the previous limit of RO5,000. Sheikh Samir al Nabhani, Executive Director of Sanad, told the local press at the time that the programme had 914 job seekers.

Also, in August, a two-phase expansion plan was announced to deploy Sanad Service Centres across the Sultanate to serve as one-stop shops for prospective entrepreneurs. Under phase one, 50 centres will be deployed across the capital area within a year while phase two will see another 50 centres deployed across the Sultanate.

Employment of nationals is also promoted through the Omanisation programme. Led by the Ministry of Manpower, the programme periodically raise the quotas of local labour. However, as quotas rise, the importance of proper education assumes greater significance. Through giving special attention to higher education, the government can ensure that there is no mismatch.

A major hurdle in promoting nationals in the private sector is that non-Omani labour is often more attractive to employers as salaries are much lower, work contracts are temporary and the experience they can offer is becoming increasingly difficult to acquire. The minimum wage for Omanis is RO120 (US$312) per month, while it can be as low as RO40 (US$104) for non-Omanis.

Oxford Business Group (OBG) is one of the UK’s foremost consulting, research, and publishing companies — with a focus on the world’s emerging markets. It’s flagship — Emerging Market Series of country investment research — provides in-depth political and economic coverage (in English) on more than 24 countries around the world. For the third consecutive year in Muscat, OBG is currently based with the Omani Centre for Investment Promotion and Export Development (OCIPED), their national strategic partner.

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