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Oman raises minimum wage to avert future protests

Source: Thomson Reuters Foundation - Sat, 9 Feb 2013 01:16 PM
Author: Reuters
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MUSCAT, Feb 9 (Reuters) - Oman's parliament, the Shura Council, approved a much higher minimum wage and curbs on the employment of foreigners on Saturday, aiming to prevent joblessness again becoming a source of anger for Omani citizens.

The cabinet proposed the moves last week in an attempt to spur private sector employment levels among Omanis after complaints about the lack of jobs contributed to Arab Spring protests two years ago.

The government is keen to move more citizens into private sector jobs in preparation for an eventual fall in oil revenue, seen as possible later this decade. Public sector jobs in Oman pay much higher wages than most jobs with private companies.

The private sector minimum wage for Omani citizens will be raised by more than 60 percent to 325 rials (${esc.dollar}844) a month effective from July 1, state television said.

The council also approved restricting the number of foreign workers in Oman to 33 percent of the country's total population "to create an employment balance", but without introducing a timeframe.

The plan approved by the Shura Council also lacked details on any mechanism to cut the number of foreign workers, most of whom are from South Asia Or southeast Asia.

Expatriates are now thought to represent about 39 percent of Oman's population and are mainly workers who were brought in to do skilled or strenuous jobs in the oil, construction and services industries, according to official data from last year.

"The new rules will open up more jobs for Omanis in the private sector as well as control demographic complexity between foreigners and nationals," the Shura Council statement carried on television said.

The increased minimum wage is likely to affect 122,000 of the 172,000 Omanis working in the private sector, the government estimated heralding a likely rise in costs for many companies.

Finance minister Darwish Ismail Al Balushi said the government created 50,000 jobs through state spending in 2012 and promised another 56,000 jobs for Omanis this year.

After protesters in 2011 damaged some foreign-owned businesses, some Omanis are also worried that unemployment could cause a rift between the sultanate's citizens and expatriates.

"If we don't continue to create more jobs for Omanis, then we are going to see tensions between Omanis and foreign workers. We already started to see signs of that," Mohammed al-Harthy, human resources officer at the property developer Al Mouj Al Khaleej Co. told Reuters. (Reporting By Saleh al-Shaibany; Editing by Angus McDowall and Toby Chopra)

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