Oman to curb reliance on expats, raise minimum pay for nationals
8 February 2013
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 yesterday, 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.
The new measures, which are subject to review by the government’s Shoura 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.
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 paper reported.