M Sathish
In the first week of May, members of the Majlis Al Shura, the lower house of Oman’s Parliament, urged the minister of manpower to replace all the expatriates occupying the top five positions in the private sector, including the post of chief executive officers (CEOs), with the country’s own citizens. “We are unanimously supporting the Omanisation move at the top positions in the private sector,” Tawfiq Al Lawati, a Shura member, was quoted as saying.
News of the proposal sent the nearly 7-lakh strong Indian community into a tizzy. If enforced, the move directly affects not only about 7,000 Indians in Oman, it could also have wider ramifications for Indian managers and workers in the entire Gulf, where unemployment is fast becoming a raging issue. The proposal by the Shura surprised few, though. Oman has long been plagued by high level of unemployment.
More than 1,45,000 Omanis are looking for jobs. The country has been hobbled by a substantial reduction in oil revenue due to the sharp fall in the global crude oil prices. Stacked against this grim backdrop, the nudge by the Shura is seen as a caustic warning to the private sector, which has long been reluctant to recruit Omanis despite a 25-year-old localisation drive.
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As recently as last February, there was a proposal to reduce the expat workforce by 6% to 5,86,272 to ‘balance’ the labour market, in which expats vastly outnumber Omani nationals. Of the 15,33,679 private sector employees, Omanis constitute only 2,24,698. The number of expat employees rose to 13,08,981 as of 2013, according to the ministry of manpower. Prior to the Shura’s proposal, there was a move to replace 1,00,000 expats with Omanis, but that did not make much headway. Human resources managers were accused of resisting the drive.
A Burning Issue
The Oman government also recently launched a programme to identify and develop a community of competent Omani CEOs partnering IMD, a prominent international business school, and McKinsey & Co. Called the National CEO Program, the first batch drew 30 Omani senior managers from select private companies.
James AE said although the Oman government initiated the localisation programme several decades ago, most of the job reservations happened in the lower rung. “The private firms were deliberately inducting mostly semi-skilled Omani professionals like drivers, in an apparent move to achieve their ‘Omanisation percentage’,” he said. Business houses don’t have much confidence in employing locals at the top, according to him.
In other words, traditional Omani business houses and even governmentowned companies are packed with expat managers, mainly those from the West and India. The Shura’s suggestion is to turn this setting on its head, but reactions are mixed. Philiph K Philiph, CEO of Muscat National Holding Company SAOG, a public limited company, said only time will prove whether the move will be practical.
“In the insurance sector, we have a lot of trained and experienced Omani employees, but not enough Omani manpower. We need to check whether there are enough number of qualified and experienced Omani professionals who can replace all the top managerial positions.”
Y Sudhir Kumar Shetty, president, UAE Exchange, said his organisation has been supporting the Omanisation programme since inception. “Our organisation has 65% Omanis who are spread across various verticals.”
Trying Times
Even so, enforcing a quota for Omanis in the private sector could not have come at a worse time for Indians. Many senior Indian managers are already facing difficulties in Oman. After the government began to crack down on graft in February 2014, Omani employers were quick to pass on the buck to Indians.
P Mohammed Ali, an Indian entrepreneur and formerly managing director of Galfar Engineering, a company he helped develop, was sentenced to 15 years in jail for allegedly bribing officials to get contracts for the company. Ali was for many years the most successful Indian businessman in the Gulf and his imprisonment shocked many Indian CEOs and managers in Oman. Since then, eight other Indian CEOs or senior managers have been put behind bars.
Political observers say the government embraced these measures to pacify agitators who participated in massive rallies and anti-corruption protests in the wake of the Arab Spring. The government also announced plans to create 50,000 new jobs for Omanis and started an unemployment benefit scheme. An amnesty scheme has also been launched to send back 50,000-plus illegal expat workers to their countries.
But the most shocking proposal yet has been the one to replace expats in senior positions with Omanis. Indian managers are understandably worried. “It is a very strange proposal for smalland medium-sized companies like ours.
We cannot afford to hire an Omani in a senior position at the company that I have built from scratch. I need efficient and loyal staff to run the business. Our experience is that the Omani staff leave the positions quite often and do not report for duty,” said the owner of an Indian business group with interests in furniture retail, hospitals and telecom in Oman. “I am planning to shift my business to Dubai or other cities which offer a better business environment,” he said, requesting anonymity.
Sajith Kumar PK, CEO of the Dubai-based JRG International, said during the last recession, many private companies in the Gulf appointed Indian CEOs and senior managers to replace expensive expatriates from the West. “This approach helped them return to profitability,” he said. Viewed from that perspective, replacing efficient managers with local staff will not help companies, he said.
The only solace for Indian managers is that the plan by the Shura has received an underwhelming response from other sections of the Omani society, including trade unions, investors, and economists. They have all said the move should be enforced cautiously. Oman is not exactly a favourite destination in the Gulf for expats in terms of payment and perks. The Shura plan has just taken the sheen further from the country.
(The writer is a freelance journalist based in the Dubai)
In the first week of May, members of the Majlis Al Shura, the lower house of Oman’s Parliament, urged the minister of manpower to replace all the expatriates occupying the top five positions in the private sector, including the post of chief executive officers (CEOs), with the country’s own citizens. “We are unanimously supporting the Omanisation move at the top positions in the private sector,” Tawfiq Al Lawati, a Shura member, was quoted as saying.
News of the proposal sent the nearly 7-lakh strong Indian community into a tizzy. If enforced, the move directly affects not only about 7,000 Indians in Oman, it could also have wider ramifications for Indian managers and workers in the entire Gulf, where unemployment is fast becoming a raging issue. The proposal by the Shura surprised few, though. Oman has long been plagued by high level of unemployment.
More than 1,45,000 Omanis are looking for jobs. The country has been hobbled by a substantial reduction in oil revenue due to the sharp fall in the global crude oil prices. Stacked against this grim backdrop, the nudge by the Shura is seen as a caustic warning to the private sector, which has long been reluctant to recruit Omanis despite a 25-year-old localisation drive.
(Join our ETNRI WhatsApp channel for all the latest updates)
As recently as last February, there was a proposal to reduce the expat workforce by 6% to 5,86,272 to ‘balance’ the labour market, in which expats vastly outnumber Omani nationals. Of the 15,33,679 private sector employees, Omanis constitute only 2,24,698. The number of expat employees rose to 13,08,981 as of 2013, according to the ministry of manpower. Prior to the Shura’s proposal, there was a move to replace 1,00,000 expats with Omanis, but that did not make much headway. Human resources managers were accused of resisting the drive.
A Burning Issue
The Oman government also recently launched a programme to identify and develop a community of competent Omani CEOs partnering IMD, a prominent international business school, and McKinsey & Co. Called the National CEO Program, the first batch drew 30 Omani senior managers from select private companies.
James AE said although the Oman government initiated the localisation programme several decades ago, most of the job reservations happened in the lower rung. “The private firms were deliberately inducting mostly semi-skilled Omani professionals like drivers, in an apparent move to achieve their ‘Omanisation percentage’,” he said. Business houses don’t have much confidence in employing locals at the top, according to him.
In other words, traditional Omani business houses and even governmentowned companies are packed with expat managers, mainly those from the West and India. The Shura’s suggestion is to turn this setting on its head, but reactions are mixed. Philiph K Philiph, CEO of Muscat National Holding Company SAOG, a public limited company, said only time will prove whether the move will be practical.
“In the insurance sector, we have a lot of trained and experienced Omani employees, but not enough Omani manpower. We need to check whether there are enough number of qualified and experienced Omani professionals who can replace all the top managerial positions.”
Y Sudhir Kumar Shetty, president, UAE Exchange, said his organisation has been supporting the Omanisation programme since inception. “Our organisation has 65% Omanis who are spread across various verticals.”
Trying Times
Even so, enforcing a quota for Omanis in the private sector could not have come at a worse time for Indians. Many senior Indian managers are already facing difficulties in Oman. After the government began to crack down on graft in February 2014, Omani employers were quick to pass on the buck to Indians.
P Mohammed Ali, an Indian entrepreneur and formerly managing director of Galfar Engineering, a company he helped develop, was sentenced to 15 years in jail for allegedly bribing officials to get contracts for the company. Ali was for many years the most successful Indian businessman in the Gulf and his imprisonment shocked many Indian CEOs and managers in Oman. Since then, eight other Indian CEOs or senior managers have been put behind bars.
Political observers say the government embraced these measures to pacify agitators who participated in massive rallies and anti-corruption protests in the wake of the Arab Spring. The government also announced plans to create 50,000 new jobs for Omanis and started an unemployment benefit scheme. An amnesty scheme has also been launched to send back 50,000-plus illegal expat workers to their countries.
But the most shocking proposal yet has been the one to replace expats in senior positions with Omanis. Indian managers are understandably worried. “It is a very strange proposal for smalland medium-sized companies like ours.
We cannot afford to hire an Omani in a senior position at the company that I have built from scratch. I need efficient and loyal staff to run the business. Our experience is that the Omani staff leave the positions quite often and do not report for duty,” said the owner of an Indian business group with interests in furniture retail, hospitals and telecom in Oman. “I am planning to shift my business to Dubai or other cities which offer a better business environment,” he said, requesting anonymity.
Sajith Kumar PK, CEO of the Dubai-based JRG International, said during the last recession, many private companies in the Gulf appointed Indian CEOs and senior managers to replace expensive expatriates from the West. “This approach helped them return to profitability,” he said. Viewed from that perspective, replacing efficient managers with local staff will not help companies, he said.
The only solace for Indian managers is that the plan by the Shura has received an underwhelming response from other sections of the Omani society, including trade unions, investors, and economists. They have all said the move should be enforced cautiously. Oman is not exactly a favourite destination in the Gulf for expats in terms of payment and perks. The Shura plan has just taken the sheen further from the country.
(The writer is a freelance journalist based in the Dubai)
( Originally published on May 24, 2015 )
