I find it very interesting how all this COVID-19 stuff is panning out. Sure, Oman is affected by the virus like most places in the world. As I write this we have 503 cases/million and 2 deaths/million. Compared to other countries, that puts us somewhere in the middle for cases, and at the low end for deaths. The government and citizens are clearly doing a great job, but at what cost?
COVID-19 is Expensive
They say there is no free lunch, and the same applies to Oman and COVID-19. For the last five years Oman is trying to undergo a campaign to ween the economy off of oil and diversify; looking at the key areas of tourism, transportation, logistics services, mining, and fishery.
Tanfeedh
Tourism is now destroyed. The airport is closed, with no set plan to reopen, and the land borders are shut. All tourists departed in a flash as soon as the closure date was announced. I know this by looking at all the rental car lots dotted around the city. I’ve never seen them so full. Furthermore, world travel looks retarded for years to come.
Transportation and logistics are… well you know the answer.
Mining and fishery are likely still active at the moment, but I don’t have a way to know exactly. However, I do wonder how all that fish is getting to market with few aircraft flying. The land border with the UAE is still open for goods transportation, but I wonder how the Dubai market is at the moment for fish.
Liquid Gold
This leaves us with that sweet, black, liquid gold. Today DME Oman oil is trading at almost USD 29 per barrel on the oil futures market. However, it was down in the 18 dollar range just a few days ago. Just devastating for the country, and no reprieve in sight. Oman is running in negative GDP due to COVID-19.
Business as Usual?
Most business are idle at the moment, just waiting for the opportunity to open up again. Restaurants are open for takeout and delivery, but business is down over fifty percent. Some retail shops are recently allowed to open, along with auto garages, and few other sectors. However, patrons choose to stay home and ride out the storm there.
Deeper under the surface there are rumblings of discrimination which are starting to bubble up. Omanis feel expats are taking their jobs. This is nothing new, but COVID-19 is reinforcing this when the Ministry of Finance calls for a timetable to replace foreign staff in all state run companies by July 2021. A very sensible, and measured request that furthers the government’s Omanization program. However, the regional media wrote headlines like, “Oman orders firing of expats from state sector companies,” and “Replace expats with Omanis in government companies.”
It also doesn’t help that expats are reporting COVID-19 at a greater percentage than their population percentage.
Look, I’m all for expats leaving jobs open for their Omani successors. My work in Oman is essentially job creation. I teach my students unique and specific skills, and at the same time, work with the industry to get those students jobs in the field. Sometimes we are at an eighty percent placement rate. Huge gains in one specialization, but Oman must not loose sight of the bigger picture.
Consider the economic outlook next year when, or if, 500,000 less expats are renting apartments, and buying goods and services in country. Sure, a lot of that will be filled with unemployed Omanis, but not totally. There will still be a gap to fill.
Omani private companies are not always willing to risk hiring from the Omani labor pool. My industry tells me this, shamelessly. You see, despite HM Sultan Haitham saying the contrary, there are two separate sets of labor laws for Omanis and expats. Companies have a higher minimum wage to pay to Omanis; and if that local employee isn’t preforming well, it is very difficult to replace them due to strong laws. Expats are cheaper, and disposable.
Silver Lining
It’s not all doom and gloom. I see this as an opportunity for Oman to make positive sweeping changes and have an amazing outcome. I can see the private sector starting to agreements that favor them due to COVID-19. With a few small changes to labor laws and basic laws, private companies will put locals at the top of the hiring list, and foreign companies will feel safer to invest in long term projects here. If business is allowed to do what business wants to do, the sky is the limit.
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1 Comment
I was so happy to have visited Oman Early march this year. One week later and I would have been stuck in Oman. Which would have been nice if I could hav travelled freely in the country. But from what I have read you’re also in a lock down.
Your remark about the damage this does to Oman apply to many countries if not all countries in the world. So sad…