Coronavirus effect: Oman orders state-owned companies to replace foreign workers with Omanis

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Oman's leader Sultan Qaboos bin Said attends the opening of the Gulf Cooperation Council (GCC) summit in Doha December 3, 2007. Reuters

Amid the growing coronavirus pandemic and its detrimental effect on the world economy and the global job market, the Sultanate of Oman has taken a dramatic decision asking all its state-owned companies to fire foreign workers and replace them with qualified Omanis, in an effort to create more jobs for its citizens.

More Omanis in state-run companies

The Omani Finance Ministry issued a circular announcing the decision on Wednesday, April 29, stating that the replacement of expatriate workers, especially those in senior positions, with Omani nationals needs to be done in a "speedy and organized manner."

The circular was part of financial guidelines issued by the Omani government to state-run companies which laid down the path of indigenization of the country's economy.

Creating more jobs for Omanis

The move comes as part of the Gulf state's efforts to create more jobs for its own citizens and develop a national workforce.

According to a Oman News Agency report, the finance ministry has given the public sector companies time until July next year (2021) to schedule appointments of local Omanis in place of foreign staff, including those in senior and managerial positions.

The ministry acknowledged that a large number of expatriates still occupied managerial positions in state-run companies in the Gulf state.

However, some sources claim that the move was unlikely to immediately affect the Omani private sector which is also a major employer of expatriate workers from South Asia.

"Omanisation" of government sector

The order is part of the government's so-called "Omanisation" campaign which was launched during the reign of the Sultanate's late ruler Sultan Qaboos who died on January 10.

The policy was aimed at improving the number and quality of jobs for Omani nationals, and the latest move shows that the campaign has just been intensified with the economic slowdown and oil price slump.

One-third of Oman's population is expat workers

According to some estimates, foreigners make up more than 40 percent of Oman's 4.6 million residents and most of the expats work in state-owned and private sector companies. A majority of them hail from South Asian countries such as India, Pakistan and Bangladesh.

Although the order at present applies only to state-owned companies, it is speculated that it could be imposed on the private sector too in the long run.

Oman's dwindling economy

The new decision could be seen a consequence of the economic slowdown and the sharp decline in oil prices and revenues caused by the ongoing coronavirus pandemic which is draining the finances of Oman, a relatively small energy producer with debt rated "junk" by all major rating agencies.

Earlier this month, Oman had barred all private companies within the country from trying to lower their economic burden of the coronavirus crisis by firing Omani workers.

The debt-ridden Gulf state has also urged private companies to ask non-Omani workers to "leave permanently."

GCC countries' job reforms

Not just Oman but other Gulf Cooperation Council (GCC) states have also been trying hard to create jobs for their own citizens. All the six GCC states, including Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the UAE are seeking to diversify their economies and integrate millions of new local graduates into the workforce in the shadow of the coronavirus pandemic.

Oman's health ministry has registered 2,348 conformed cases of COVID-19 infection and 11 deaths as of Thursday, April 30.

Related topics : Coronavirus