Budget of billions will be spent to put 25,000 Omanis back to work

Oman has pledged to create 25,000 jobs from December this year in an effort to reduce unemployment as the country face its worst jobs crisis in 40 years.

“Oman’s council of ministers has decided to provide jobs for 25,000 Omanis in both the public and private sectors starting from December this year,” Oman News Agency said.

But it did not say how much the government would spend on job creation, nor did it give a time frame. But an official from the ministry of finance said the government has allocated a budget of 11 billion rials (Dh105 billion) in the next five years to help generate thousands of jobs each year.

“The 25,000 jobs will be created in phases, starting this December lasting until the middle of 2018. This is the initial stage. But there is a bigger picture behind it. We plan to create 40,000 to 50,000 jobs every year for the next five years with the total allocated budget of 11 billion rials,” the official said.

He said about 60 per cent of the new jobs would be in the public sector, mainly in stateowned companies. The private sector would also be given incentives to employ Omanis by nationalising positions filled by expatriates. The official gave no details of what those incentives might be but he said some of the funds would be allocated for small to medium-sized enterprise projects to encourage Omanis to become self-employed.

“SMEs not only remove young people from the job queue but create employment as well,” he said.

Nearly 60,000 Omanis are looking for jobs, according to the ministry of manpower. Most of them are graduates.

Oman is expanding two of its airports, in Muscat and Salalah.

It is also building two more in Ras Al Hadd and Duqm. The fifth airport, in Sohar, has been fully operational from the beginning of this year but it is not yet fully utilised.

The government is also modernising the mining industry in Sohar for foreign investment, as well promoting steel and aluminium plants.

It has lavished promotion on Duqm in central Oman, resulting in a $7 billion agreement with Kuwait Petroleum International to construct an oil refinery there.

Chinese investors have also signed a deal with the government to build a new $10.7bn Duqm city.

“All these projects will need to employ thousands of people in the next five years. It is part of the effort to diversify the economy away from oil income. The projects would also be a good source of corporate tax to settle the deficits,” Fareed Al Kalbani, an economic analyst, said.

In the first seven months of this year, Oman’s deficit was recorded at 2.6bn rials (Dh24.8bn). The government said early this year it would wipe out the deficit using its reserves at the end of this fiscal year. Oman also raised corporation tax from 12 to 15 per cent in January this year.

In the private sector, expatriates vastly outnumber Omanis. Manpower ministry figures up to the end of July showed only 236,729 Omanis are working in the private sector compared to 1.87 million expatriates.

“This is where the government can create those thousands of jobs, by replacing expatriates in some positions,” Mr Kalbani said.

“The government can offer incentives like free training, low-interest loans and free commercial lands to the private sector in return for employing Omanis.”

In the private sector, where the vast majority of jobs are held by expats, measures will be taken to ‘nationalise’ many of those positions