Thursday, March 10, 2011

Ministers sacked wholesale. HM feeds the Entitlement culture and new (peaceful) protests confirm a sea change in Omani politics

More demands, yet more acquiescence
Protests in Oman have now calmed down to the level of 'sit-ins', with no further violence and a deliberate & explicit expression of support for His Majesty. The focus of demands has crystalised upon more jobs & higher salaries, more Government welfare, action against (high level) corruption, free(er) speech, and significant expansion of the powers of the elected Majlis Al Shura.

The calls for 'give me free stuff' are not going to do anything to reduce the already huge dependency culture. The price of a paternalistic government is that the population then expects big daddy government to solve all problems and be an endless source of cash. Many Omani youngsters seem to approach their long suffering patriarchs the same way, like a personal ATM machine, as if money doesn't have to be earned or loans paid back.

Still, the protesters have started to get their way in an almost breathtaking way - many Ministers were replaced a few days ago on 'the night of the long Khanjars', with even the entire Ministry of National Economy [MONE] dissolved. The fate of its official leader, Minister HE Macki, is yet to be seen.

Meanwhile the protesters continue to press their case for even more Ministers to go, or join the ranks of 'advisors' (usually they stay on a Minister level salary - they are hardly joining the ranks of the unemployed lining up for their newly announced dole of 150 rials a month). It's still to be seen if any high level corruption trials will be held.

The head of the central bank denied rumours of large money transfers out of the country.

Be careful what you wish for...
However, we are starting to see the downside of what happens when such behaviour is encouraged and previous laws making such protests illegal are ignored, with scenes more reminiscent of old school Western 'Trades Union' at Bahwan, Oman Air, Omantel, Towel and even Petroleum Development Oman.

Photo (Gulf News): Protesters at Petroleum Development Oman [PDO] climb on the 'give me even more money' bandwagon

I doubt many Omanis will have too much sympathy for PDO staff. The workers at PDO are probably amongst the most well paid in the nation, with generous pensions too, and the company's Omanisation level is probably well over 80%. The oil company is, after all, majority owned by the Government. It is also the one company in Oman that could most justify having a requirement for skilled foreign workers, as at the end of the day PDO is the source of the life blood that runs through the entire Oman economy - oil and gas production & export. Last year PDO produced about 650,000 bbl/d, plus around 400,000 boe of gas, around 80% of the entire country's production. (more on the implications of this later).

Omantel workers were also sticking their hands out for more money and free loans, despite a history of bureaucratic incompetence, exploitative prices and poor service. Omantel probably exemplifies the argument for why Governments should preferably not run businesses.

So what exactly is illegal these days?
Where will this end? Now that the populace have apparently lost any fear of retribution for striking, protesting, or unlicensed public assembly, where are the new boundaries? There are a load of laws being broken right now, (even if we ignore the clearly illegal burning of private and state property or physically threatening the ROP).

Clarification of what the new laws are would be a boon. Can oil workers or other critical services legally strike? Can the Government now be publicly criticised? Is a call to make the Majlis a legislative body, defacto requiring a new constitution and a radically different philosophy of governance, also now legal? I'm told a blogger who posted photos showing the death certificates of the young Omanis killed in Sohar had his site quickly blocked by Omantel. How will the recent reporting of dramatic events change the laws on media and the press?

Right now the chaotic impact of allowing (and rewarding) previous transgressions seems obvious. Want more money? Think your boss or CEO should be replaced? Heard a rumour that such-and-such a senior Government official is on the take? Hey! Then grab some firends, have a protest and go on strike! Get your unemployed friends to help!

As all these new (and often highly inexperienced) Ministers will not be the fastest when it comes to making decisions, I don't expect much clarification in a legal sense soon.

The spread of protests to oil workers has already spooked the international markets, with Oman's international credit rating put on notice and the Muscat stock exchange plunging 5% in a day. Tourists are cancelling holidays. Foreign investment plans will be put on hold. This could increase Oman's interest payments and make the economy even more dependent on oil. Across the board wage and benefits increases will feed inflation and make Omanis even less competitive in the labour market, hardly what's needed.

Next: How much money is Oman earning from oil and gas? Is there enough money to go around?


  1. dependency culture , students being paid more than people earn, reactive politics ; the only business to be in now is ‘rent a roundabout’, ready for the next protest about ……

  2. That was weak UD. Where's the scathing criticism? You've gone soft!
    I for one will be sacking any worker who strikes, as we already pay well above the award rate. Then I will rehire them at minimum wage. Alternatively they can register with the Ministry of Manpower and join the ROP or Military for OR 200 per month.

  3. Ref: yr next post: And where exactly does the oil and gas revenue money go? Seems like the budget says $58 per barrel goes to gov't expenses. But if Oil selling for $90 + per barrel, then where does the rest go? (i.e. $32 per barrel = $90 - $58?) I have heard that various individuals / families get a cut of the oil revenue directly -- e.g. 3% goes pretty directly to Mr A and his family and 2% directly to Mr B and his family and so on. Can you please enlighten us? If that is the case, and various % are paid directly to a few families, would it not be a good idea for Oman, instead, to do something like Alaska in USA -- every Alaska resident (long-term) gets a share in the oil profit paid to the State of Alaska -- i.e. once per year, money is paid out to each person living in Alaska (long-term). The idea would be: share that excess revenue evenly throughout the Oman population rather than just benefit a few fat cats who have been getting this revenue for years and already must be rich, rich, rich.

  4. Well what can one say personally what should have happened is aong time ago expats should not have been allowed to stay. Take the scenario of 500,000 expats that is estimated in country. Eliminate 300,000 of those being hardness, housemaids, house boys, cleaners etc and all of a sudden you have created some what 300,000 new jobs. Oh but would they want to do it ! And the answer is probably No? So what does the future look like for Oman, well with a country 60% or so under the age of 30 with the rising unemployed up to now one hopes it will sort itself out to avoid destroying what a great leader has developed. More on this later.

  5. It takes away what Qaboos has achieved.

    There needs to be a reality check.

    We have students wanting 'qualifications' for little effort and to be paid for going to college.

    We have workers wanting pay increases to buy houses and get married.

    We have the unemployed being paid little under what employed people earn.

    Of course, we only want work that is easy.

    It's giving in to tantrums and it bodes badly for the country.

  6. I beleive Oman has entranched politics of payment, perquisites,rights, responsibilities, accountability is attached to Nationality. I am not sure can it be called "Racism"?!. Fact is now it is difficult to sustain this country and at least moving forward is difficult. 10Billion dollars are coming as GCC donations!?. This country has plucked all low hanging fruits and therefore future is bleak beyond jingoism!!

  7. IMHO: Charge everyone, no exception, RO.150 per month for a labour clearance, since that is the benefit promised to unemployed Omanis. It is then up to individual businesses to determine whether to employ an Omani or an expatriate for any one position. Yes, even as your domestic help. Self financing unemployment benefits.

    Make it simple to fire an Omani, no reason necessary, like in the USA. After all, he can then go and claim his 150 per month. That's a good enough social safety net.

    Remove practically all restrictions on labour clearances. You want 500 clearances? Just pay 500*150 Rials per month to balance out the 500 Omanis who will be on the dole @ 150 per month.

    Announce that such measures will be brought in gradually over a 3-year period, in thirds, so everyone, employees and employers, have time to prepare and adjust their frames of reference for tendering, etc. Perhaps you can survive without employing a driver to take the kids to school... If the unemployment benefits are raised beyond 150/month, so too should the labour clearance charges, Rial per Rial.

    The offset in the already-promised unemployment benefits should release a big chunk of Rials that can be used to subsidise other sectors so that we do not lose overall competitiveness, e.g. education, health, housing, infrastructure, etc so that the overall economy becomes more efficient, rather than distorted by excessive subsidies in dubious, well-intentioned social engineering. E.g. do you guys realise that you are currently paying about $53/barrel for your REFINED petrol at your local pump, while unrefined CRUDE sells for $90/barrel? That's a subsidy of around $50/bbl! Insanely distorting. No wonder everyone aspires to gas guzzling 4x4s! And it will be socially impossible/traumatic to get rid of that subsidy in one go. As oil prices continue upwards, one day the government will decide that Oman can no longer afford the subsidy and we will end up with riots in the streets. Protecting the public from high fuel costs started off being well-intentioned (actually more complicated than that. The government wanted to collect a major premium "tax" when crude plummeted to $8/bbl so they stayed with a fixed price for petrol. We then ended up with a fixed price more or less permanently even though the tax evolved into a subsidy), but the end result always is predictable and disastrous. Protecting Omani employees from vicarious firings also started off well-intentioned. The result was also totally predictable. An inefficient labour force, and a huge army of PROs chasing labour clearances. These hard-working PROs, doing a very thankless, eternally frustrating job, are unfortunately and regretfully NOT adding to national wealth production. If only all their energies could be unleashed at something actually wealth-creating. Basic Economics 101. Beware of good intentions. Everything has to evolve with changing realities. That's basically why democracies tend to do better economically. Democracies receive constant feedback from the populace, ideally. Democracies also have rather slow decision-making capabilities. Good; time for everything to be evaluated properly, rather than knee-jerk reactions that often end up unsuited for the longer term. We are now going through the birth canal for a more democratic Oman. We all pray we will come out the other side better off overall and with hopefully much less convulsive pains than other countries went through, be it centuries ago or more recently.

  8. More tantrums from the expecting younger generation:

  9. There are rumours that there is dissent at Zubair's Shangri la complex.

    Also, there is talk that the ever wonderful student body will 'strike' tomorrow because they want rid of the Minister for Higher Education.

    HM needs to address the nation and stop this. It's getting petty and spiteful.

  10. The dependency culture in Oman is going to take some effort to resolve. Throwing more handouts at Omanis to placate them isn't going to work long term. You give someone something and they just want more.

    Reshuffling, replacing cabinet ministers is also not the answer. New heads do not make for new ministries or new was of working. Not in a "grab what you can at the expense of others" type of culture which is typical in Oman.

    There has to be root and branch change - a move to elected officials who are accountable to the people. There has to also be some movement on the side of the people to get off their fat asses and find work - any work - no matter how demeaning they think it is.

    Omanis must grow up.

  11. Yes lets all kill the golden goose.... So things are too expensive? Lets all go and strike and triple our salaries... Lets give all the tourist in our hotels the worst possible service.... Who cares if they stop coming on holiday to oman.... Who cares if our companies become uncompetitive in the global world.... if our students become the laziest ... lets scare all the foreign investment out of the country... Lets burn buildings..

    Where is the rule of Law? Oman, the new wild west.

  12. Those protesting nationals may get their wishes sooner than they think - the expats are already on the move. The key ones, the ones they really need. The ones that helped them make Oman what it is today. Those very people who are helping them learn to be able to do the jobs themselves.

    The country is becoming too unstable (just look at today's Muscat Daily). Our families and friends are cancelling their flights. The job insecurities have returned (we have families to support too) and many are sadly looking at alternative locations. It isn't perfect living here, at times it's very frustrating but at least it used to be safe. Now we are not so sure. That group of youths over there, the one that used to be so friendly now seem volatile and threatening.

    Like the rest of the Middle East (yes, Oman, that beautiful gentle country full of kind, hospitable people, has now joined that band, their independence and pride rejected for the sake of instant gratification)and it appears that unless HM can get a real hold on these issues right now there is little hope and the whole area will indeed become one vast no-fly zone.

    Do they really believe that if we all up sticks and walk they will continue to have the quality of life they have today. The place will grind to a halt and the progress of the past 40 years be destroyed by their own hand.

  13. So finally the silent coup is achieved. What more you can ask from a ruler? Oman will now become a democracy. Now the protestors should leave and allow things to normalcy and wait for decisions to be taken by consensus.

  14. I think the main ministry that needs to be re-vamped is the Education one. Firstly, the people at the top have been educated in the existing one, and many have been promoted to positions of power because they are women - not because they can handle it. If the people at the top would only learn by looking out of their windows, they would see that for the average Omani to be globally competitive, they need to study English and have a much higher level of academic education than now. Frankly, Oman is for Omanis. And that is the way it should be. But, if the Omani can't handle sophisticated medicine or engineering or finances, then to keep the country on an even keel, expats come in. If Omanis want to get rid of expats, then the first thing they should do is really educate themselves and stop trying to glorify sub-standard "achievements".

    What HM is doing is simply trying to calm a nasty situation which could at anytime become a pure unadulterated nightmare. But, instead of handing out doles and making the Omanis believe that everything is free, maybe he could try and tell the people that the jobs are yours if you are willing to be trained/educated, and that training/education will be at the Government's cost.

    BTW, I am confused as to what extra perks for the expats the Omanis are talking about? Expats can't get treatment at the state-of-art Government hospitals here even if they need it, while Omanis get it free. Omanis get bonuses at the drop of a hat. In many places, Omanis get a 2-day weekend while at the same offices expats have a 1 or 1-1/2 day weekend. There are many other perks that are for only Omanis. The salary of many of the expats is low with "huge" perks in the form of housing and education (which is free for Omanis). If the salary is high, the expats are working themselves 12-hour days 6 days a week for it. Would any Omani like to do that? They don't even pick up a paper lying on the floor!

  15. There seems to be remarkable ignorance and an unwillingness to listen on all sides of the debate. On the one hand you have quite well paid public and private employees going on strike and asking for higher salaries and benefits.

    I would understand minimum wage workers who work tough, thankless jobs doing that, but not everyone demonstrating fits that description. No - last week some doctors had a really asking for more. Doctors are quite well off in Oman. They're not construction workers, or cleaners.

    And the ones who need the most protection, the migrant workers from India and Pakistan and the Philippines, would they demonstrate? They wouldn't dare, would they?

    At the same time, you have SQU students getting 1000 rial 'gifts'. No sir, nothing to do with the protests, nothing at all. How remarkably ignorant people can be.

    There are genuine concerns, and they need to be addressed. But a broad-brushed approach from either side is not the solution.

  16. For your information ... I am from PDO and the picture you picked from GulfNews is about Omantel not PDO ... Ours was for only few hours and it is not all about Money ... There is great need for Respect and Transparency as well.

    Omani in PDO

  17. I find it interesting. I am an expat and if I run a red light by mistake, I can go to jail for 2 days.

    But the Omanis can burn down their own government buildings with impunity.



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