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Key Trends and Challenges That Lie Ahead for the Oman Labour Market and How Governments May Better Meet Those Challenges

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KEY TRENDS AND CHALLENGES THAT LIE AHEAD FOR THE OMAN LABOUR MARKET AND HOW GOVERNMENTS MAY BETTER MEET THOSE CHALLENGES.

Prelude

Oman is a progressive developing country with tradition and modernity blended in perfect harmony. Oman has a rich heritage and history and Omani's are traditionally seafarers and traders.

With the advent of discovery of the Black Gold (Petroleum), global trade and the blessed renaissance of His Majesty Sultan Qaboos bin Said, Oman stands tall with high developmental activities in health care, education, human resources development, infrastructure, tourism and industry. This is apart from the Oil and Gas industries development that forms the back bone of the country.

The ongoing growth has not only been in terms of economic development and increased standards of living, but also in population growth. Oman's population has been growing at a rate of 3.5% year on year as per the census data .

While trade and economic activities grow in numeric terms, population grows in exponential terms. There are both positive and negative aspects of the population growth of any country.

Oman has a small population at present and is able to manage it well. However, with the limited and declining oil reserves, increased cost of extraction and limited oil revenue resource in the future, Oman stands at a cross road to develop non oil resources to sustain its development and growth.

Achieving Self Sufficiency in Labour Market - Longer Term Goal

To develop and achieve non oil resources and to keep the wheels of the economy running, Oman has to improve its own national manpower to meet the challenges.

Having understood this, Oman government had initiated number of reforms from grass root levels, including:

* compulsory free education to all up to higher secondary school level (please verify this statement),

* instituting number of vocational training centres to impart on job skills training, followed by,

* Omanisation of various job categories in private sector and limiting or eliminating employment of expatriates for jobs reserved for the nationals.

* Fixing of minimum wage for nationals to encourage them to join the private sector, etc.

* Promotion of quality jobs for the nationals and at the same time inculcating the dignity of labour mindset, which is currently the major issue with any Omani job seekers.

To understand and implement key strategies, we need to look at the sectors that employ and the percentage of manpower whether national or expatriate to arrive on policy decisions. The following are the major indexed sectors for Labour Market under which variety of professions are included:

* Distribution, hotels, catering, etc.

* Education, health services, social works

* Financial and business services

* Transport, storage and communications

* Manufacturing industries

* Public administration and defence

* Other services

On knowing the percentage of category of people involved and the qualifications and training required for such jobs, government can implement specific strategies according to each sector. Oman government has already implemented such a strategy and it had shown great results. This can be seen in Omanisation percentages in the banking sector (90%) and service sector (60%) in comparison to the manufacturing sector (35%).

Human Development Index - Oman

Since, 1990 the Human Development Report published the human development index (HDI) which looks beyond GDP to a broader definition of well-being. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income). The index is not in any sense a comprehensive measure of human development. It does not, for example, include important indicators such as gender or income inequality nor more difficult to measure concepts like respect for human rights and political freedoms. What it does provide is a broadened prism for viewing human progress and the complex relationship between income and well-being.

Currently Oman stands at a comfortable at 0.846 level as per the above diagram at 56th rank amongst the 182 countries. However, the future does have concerns.

Concerns:

S&P a leading credit rating agency has identified two major issues that could constrain Oman's economic growth and credit rating in coming years unless the Sultanate moves to address them.

Other than the ever-present risk that oil prices could fall, growing pressure on Oman's labour market could hamper its economic progress.

As said earlier, Oman has a rapid rate of growth of the indigenous Omani population, and that has been absorbed to date by gradually reducing the expatriate population, such that the overall population growth rate of Oman has been tempered, however there is are limit to that process.

Currently, the expatriates are fulfilling vital roles and their numbers cannot be reduced beyond a certain flash point. And when that point arrives, what we will see would be a sharp increase in the overall population growth rate.

Another issue is an apparent skills shortage in the labour market. There is huge mismatch between the skills sought and the skills available with the local Omani population.

Some labour market regulations, such as minimum wage requirements, also discourage the private sector from absorbing adequate numbers of Omani job seekers. While on the one hand it is regularised to induce Omani's to join the private sector, but it discourages the private sector companies from hiring Omani's when labour is available at much cheaper rates.

Targeted Development measures

o Diversified Programmes:

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