Viewing cable 05MUSCAT541
Title: OMANIZATION: JOB CREATION, NOT REPLACEMENT

IdentifierCreatedReleasedClassificationOrigin
05MUSCAT5412005-04-03 04:53:00 2011-08-30 01:44:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Muscat
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 MUSCAT 000541 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR NEA/ARPI(TROBERTS), DRL/IL(JDEMARIA), 
USTR/JBUNTIN, USTR/AROSENBERG, DOL/JSHEA, DOL/ALEVINE 
 
E.O. 12958: N/A 
TAGS: ETRD ELAB PREL MU
SUBJECT: OMANIZATION: JOB CREATION, NOT REPLACEMENT 
 
REF: A. MUSCAT 534 
 
     ¶B. MUSCAT 142 
     ¶C. 04 MUSCAT 1527 
 
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SUMMARY 
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¶1. (SBU) During labor consultations with Deputy Under 
Secretary for Labor Arnold Levine, the Ministry of Manpower 
 
SIPDIS 
(MOM) reaffirmed its position that Omanization will not come 
at the expense of performance and productivity.  In 
clarifying the practical aspects of Omanization, MOM 
officials reminded DUS Levine that Omanization is actually a 
quite dynamic process in which Omani and expatriate companies 
work together to determine appropriate targets of localized 
employment.  (NOTE: Omanization targets to do not apply to 
senior management.  END NOTE.)  Moreover, through this 
effective immigration policy, Oman is able to maintain the 
integrity of its expatriate workforce as well as increase 
educational and employment opportunities for qualified 
Omanis. 
 
¶2. (SBU) While Omanization continues to be the backbone of 
human resource development, calendar year 2004 actually 
resulted in a 5.9 percent increase of expatriates employed in 
the private sector compared to a modest 1.5 percent growth 
for Omanis.  Work ethics, minimum wage levels, and education 
and training remain serious domestic challenges in the 
practical application of Omanization.  Despite the 
government's emphasis on Omanization, the Sultanate continues 
to rely heavily on expatriate labor, 90 percent of which is 
from India, Bangladesh, Pakistan, the Philippines, and Sri 
Lanka.  End summary. 
 
 
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OMANIZATION AND IMMIGRATION 
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¶3. (SBU) In the course of four days of labor consultations 
that began on March 14 at the Ministry of Manpower (MOM), 
Deputy Under Secretary for Labor Arnold Levine (ref A), 
learned about Oman's commitment to Omanization.  But, 
according to Manpower Minister Juma bin Ali bin Juma, 
"Replacement of expatriate employees will not be at the 
expense of performance and productivity." 
 
¶4. (SBU) The MOM has continued to stress the dynamic nature 
of Omanization, urging DUS Levine and other officials to 
consider this a flexible process in which both the private 
sector and government cooperate to create sector targets. 
Currently, targets of Omanization are set according to 
recommendations by Omani and expatriate companies who sit on 
sector committees.  These committees determine appropriate 
Omanization percentages based on negotiations, availability 
of trained Omanis in various fields, and a given sector's 
need for expatriate labor. 
 
¶5. (SBU) The MOM emphasized flexibility in meeting target 
Omanization rates.  If a company cannot meet the target for 
its sector, for instance, it may appeal to the MOM to 
negotiate its employment needs, Omani and expatriate. The MOM 
cited the example of Shangri La Hotels.  Unable to meet its 
initial 60 percent Omanization target, the company appealed 
to MOM for assistance and subsequently negotiated a reduced 
target of 40 percent with a long-term plan to meet the 60 
percent goal.  The MOM seeks to localize labor, yet, as with 
the case of the Shangri La Hotels, maintain enough 
flexibility in meeting the demands and needs for employment 
of expatriates in the private sector (ref B). 
 
¶6. (SBU) According to some officials at the MOM, Omanization 
is not job replacement, but an effective immigration policy 
to maintain the integrity of the expatriate workforce while 
better meeting the needs of its rapidly expanding population 
of job-seeking youth. In recent audits conducted by the MOM, 
officials discovered that over 48 percent of registered 
expatriates in the private sector who occupy jobs requiring a 
university degree in fact do not have a high school diploma. 
The MOM argues that while Oman is open to inviting 
specialized expatriate professionals with the appropriate 
qualifications, it seeks to fill unskilled jobs with Omanis. 
Moreover, although Omanization continues to be the backbone 
of human resource development, calendar year 2004 actually 
resulted in a 5.9 percent increase of expatriates employed in 
the private sector. 
 
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LABOR STATISTICS 
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¶7. (SBU) According to the latest statistics released by the 
MOM, approximately 37 percent of Omanis employed in the 
workforce were working in the private sector (an annual 
growth of 1.5 percent), and 63 percent were employed in the 
public sector.  These figures represent a 50 percent increase 
for both sectors in just under ten years.  Oman's employment 
database, the Public Authority for Social Insurance, tallied 
over 87,000 Omanis registered for employment by the end of 
¶2004.  In a statement to the Omani parliament March 27, 
Manpower Minister Juma elucidated on this figure, saying that 
"30 percent of job-seekers are not serious, rather they just 
register their names with the MOM but do not follow-up or 
interview for jobs."  He claimed that of the 48,710 
newly-registered job seekers in 2004, the MOM located an 
astounding 36,928 jobs. 
 
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OMANIZATION TARGETS BY SECTOR 
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¶8. (SBU) The Omani government has fixed the following targets 
for Omanization by 2007: 90 percent for banking and finance 
(currently 91.8 percent); 70 percent for oil and gas 
(currently 67 percent); 30 percent for contracting (currently 
22.5 percent); 50 percent for all jobs in the automotive 
sector; 25 percent for jobs in information technology; 95 
percent for marine services; 95 percent in travel and tourism 
in the next five years; and 30 percent for academic staff 
over the next ten years (ref C). 
 
¶9. (SBU) In addition to targeted Omanization in several 
sectors, foreign nationals may not be employed as technical 
assistants, guards, heavy vehicle drivers, agricultural 
workers, forklift or mixer operators, or public relations 
officers unless the employer can show that there are no 
Omanis available for the positions.  Moreover, recent 
regulations stipulate that only Omanis can be involved in the 
sale of incense, incense burners, halwa (a traditional 
dessert), and khanjars (traditional decorative daggers). 
Vegetable and fruit sales, as well as the sale and repairing 
of mobile phones, are also being Omanized in various 
wilayats. 
 
¶10. (SBU) In what appears to be a favorable development for 
expatriate businesses and labor, the MOM has recently 
introduced a new simplified visa process.  The new program, 
the Distinguished Transactions Card, will allow reputable 
companies to have their expatriate visa applications cleared 
more easily and faster. 
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COMMENT 
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¶11. (SBU) Omanization is at the forefront of Oman's domestic 
economic agenda as it continues to grapple with education, 
job creation, and immigration concerns.  Omanization, while 
aiming to achieve job creation for Omanis, has more 
importantly served as a catalyst for educational 
modernization and development.  With over 60 percent of the 
population under the age of 20, of which only a small 
fraction have the opportunity to attend vocational or 
university education, creating not just jobs but educational 
opportunities remains the most pressing domestic challenge. 
Echoing the need for training and education, one expatriate 
businessman said, "If the Sultanate didn't have an 
Omanization program, this country wouldn't move forward." 
BALTIMORE