Is the private sector of Oman facing brain drain?

The recession is now taking hold of the local economy and the private sector is on the brink of losing its most skilled talents. Omanis, as well as foreign nationals, are considering their options to move to other GCC countries. For expatriates, the favourite destinations among the regional states is the United Arab Emirates and Qatar. Low oil prices have very little impact because of the strong market fundamentals there. Omanis also are seriously weighing up their employment options abroad.

Oil revenues still make up about 75 per cent of the Sultanate’s total income. Staff wages both in the public and private sectors are among the lowest in the region. In the current recession, the government has already frozen promotions, bonuses and other incentives.

The private sector is following suit. Such financial motivations keep the staff loyal to their employers and the lack of it will force them to look elsewhere.

The brain drain will severely hit the economic recovery and kill off the rudimental diversification efforts which are already in place. Talented young Omanis in the middle management positions are restless and need to see the expansion of their careers.

To lose them to neighbouring countries that promise better pays and remunerations will severely hamper the 30-year-old Omanisation drive. On the other hand, losing expatriates who are playing a key role in the private sector will reduce the market competitiveness. The void created by the departures of the skilled workers, both Omanis and expatriates, cannot be filled by graduates who lack working skills and years of experience.

On the question of graduates, youngsters armed with degrees, are now finding it tempting to cross the border to expanding economies that don’t depend on oil volatility. In this trend, the void left behind will be difficult to plug in when all venues of talents start to depart systematically.

The government is now looking for a quick remedies to reverse the trend to keep the talent and skills in the country. The example of this was evident earlier this year when it was announced the cabinet is considering removing some restrictions on foreign investment laws. Non-Omanis may be allowed to own businesses without the minimum requirement of having a capital of RO 150,000.

It is a good decision in the middle of a recession that tries to mend a collapsing wall with concentrated efforts. In the private sector, the challenges of business owners to keep their talents in a very unpredictable market will not be easy.

Private companies would need to diversify their businesses by expansions and innovations to stop the brain drain. In the past, many opportunities for the private sector to encourage large business integration with multinational companies have been lost. Lack of researches that would have led to programmes for the utilisation of business skills is one factor that has not taken off for private entrepreneurs.

International trade partnerships, create not just employment opportunities, but pay well to keep workers happy to stop them from leaving the country. Such partnerships also transfer knowledge and technology, which are much needed in a merging economy like Oman. The brain drain, once it has started, it will be difficult to reverse it. Oman will no longer be able to compete with countries that have ‘poached’ its skills when oil prices are high again.

Structural adjustments are badly needed for long-term brain gain. But serious efforts are needed to reverse the past misdemeanours. The learning curves have many bends and Oman must find a new path to latch on in the middle of the recession. The good news, the remedies are already in place in the government to keep its talent. The private sector must follow suit.