Thursday, July 9, 2009

Oman’s time bomb…

Why is it that the Omani Government is so committed to relentless big infrastructure and industrial development? The cheap gas used to fire the new mid-stream industrial complexes in Sohar and Salalah; the insatiable ambition of Omran to plaster every beach with 5 star hotel tourism developments? Why even crazy sounding schemes like importing bauxite to make aluminum are executed.

The answer: Population. There is a flood of young people coming to Oman’s employment market. The combination of 1st world health care and 3rd world rates of reproduction are upon us.

This is the population age pyramid for Oman next year. [ref:]. Ignore the middle age bump in the male population – those are the temporary foreign workers. But look what’s coming. Young people. By the 10s of thousands. Every year.

The economy cannot take these people. Not right now. The Government can hire a few thousand. Private firms similar numbers. A few thousand too can go to University (but that just delays the problem a few years). With ~80,000 high school graduates a year, that still leaves at least 50,000 a year unemployed. With no significant social welfare programme, this is starting to create a huge underclass of bored, badly educated, and poor, young adults. Without a job, or at least 3,000 rials, they can’t marry either, so add sexual frustration to the mix too.

The devil does find work for idle hands. Crime is growing. Parts of Al Ghubra are now best known for joy riding car thieves and vandalism. Petty theft and burglary in Al Kuwair. Prostitution in Ruwi. Rising religious extremism.

Unfortunately, the young are also unwilling to really work (I generalize of course*). There is a paternalistic entitlement culture. Everyone looks to the Government to provide the mana from heaven. The young want the cars, the clothes, the fast food, the phones, but don’t seem able to connect these desires with the need to work to pay for them. Many just want a soft job as a PRO. Or sitting at a computer surfing the net part-time in one of the Ministries. Meanwhile they sponge off their increasingly hard pressed parents to fund their lifestyle and provide accommodation and food.

So, what to do?

In some areas I think we’re doing really well: Banking, the Military and the Oil and Gas industries (upstream and downstream), are all highly Omanised.

However, large swathes of the Omani domestic economy remain almost fully 'expatized'. This MUST change. Some big areas that offer opportunity IMHO are:

1/ Construction.
The construction industry has to up-skill and to employ Omani silled and semi-skilled labour. The trades – electricians, plumbers, carpenters, tilers – remain stubbornly filled by poorly skilled Indians, and our crap electrics, kitchens and toilets the result. Ditches are dug by hand by large groups of blue, green or orange suited Pakistanis, rather than with a machine operated by an Omani. The civil engineers are Turks, Indians, Egyptians, Greeks, and Brits. Even the crane operators – a nice skilled job – are imported.

2/ Health Care
Nurses and medical technicians are predominantly Filipino and Indian. With the more skilled Doctors Oman is probably doing as well as it can, although the need for better quality training and truly independent certification remain issues. Hospital orderlies and cleaners should be 100% Omani, but again the ranks are filled with expats and older Omani who still know that a jobs a job (and have families needing support).

3/ Tourism
Progress is evident, but no-where near enough. The problem here is that while tourism is a labour intensive business, it’s low margin, and the quality and low cost of Filipino staff underpin the profitability in what is a highly competitive international industry. Omani staff are also generally unwilling to work the same hours either.

4/ Transportation
Cars are seen as an essential part of life in Oman. Fuel is cheap (around US$0.30 a litre), import taxes and car registration charges low, and so the number of cars per capita pretty high. Yet take a car for a service or for repair and it seems the entire car and truck business is fully expat. There are no Omani mechanics, or even service centre managers and administrators. Truck drivers were subject to an abortive move to require 100% Omanisation, but hit problems when deliveries slowed by orders of magnitude, and no Omanis could be found to operate the sewage trucks. Those driving jobs that have been Omanised (school buses, light commercial) are plagued with unprofessional driving standards and high accident and fatality rates.

5/ Education
Still unfortunately a growth industry, the Primary and secondary sector suffers from poor standards, basic curricula, plagiarism and cheating. Sultan Qaboos University, the no. 1 institution, has low rates of Intellectual property creation or industrially useful R&D. Omani staff are often over-promoted and inexperienced. Expat staff are dominated by time serving second raters. The newer private universities have huge problems with low quality students who they can’t really be failed. This means that a lot of money and talent is being totally wasted right now, with too few Omani getting a strong education based on high standards, knowledge and research. Instead we’re getting too many lazy idiots who can copy and paste, and seek to obtain by any means a worthless piece of paper they think will entitle them to a monthly payment for life.

6/ Media & Communications
The mobile phone business has been very successful in finding good Omanis. Nawras has done a fantastic job here, (and even Omantel too in this regard): staff are mainly Omani. But the newspapers and radios again seem locked into a pervasive layer of middle management NRIs. What’s the % Omani writing the Times of Oman? Or The Week? Oman TV is a complete and utter joke. More deregulation of the industry could create lots of jobs for Omanis: in production, writing, acting, reporting, filming, and the huge areas of post-production and advertising.

7/ Conscription
Many 1st world counties still have compulsory military service in between high school and Uni/work. We should have something similar here for men and women. Give them solid (and tough) basic training that includes some life skills. Make them get their hands dirty and sweat. Make sure they assist the community. Get them doing civil works (repairing falaj, drilling water wells, clearing land, building and repairing walls), helping in schools and hospitals, in civil defense, coastal and border patrol. Pay them next to nothing. And don’t let the wastafarians escape their duty either. When I say compulsory I mean it for everyone, not just the poor.

While the Government knows this wave of youth is upon us, more effectual regulation and policy is needed urgently. Many of the rules that are in theory designed to improve Omanisation instead act to discourage local SMEs with pointless red tape and arbitrary inflexible regulations. For example, by requiring all delivery vans to be driven by Omani, yet also insisting that they do not have to do anything else (like help carry the dishwasher into the house, etc) the Ministry simply doubled the costs of delivery for businesses and pissed off a lot of hard working Indians (who get to do the hard work while the driver sits in his AC’d cab with engine running, and they do the lifting).

Employment law makes it very hard (if not almost impossible) to fire an Omani, which means no-one wants to hire one if they could get an equivalent expat. The large monopolies and oligopolies (construction & car dealers being prime examples) seem to dominate industrial regulation. Omanis, already hobbled by a substandard education, find themselves trapped between a pool of unlimited low cost imported unskilled/semi-skilled labour and an entrenched layer of expat middle/upper Management and Omani businessmen. Growth is being held back, and we need that as well as more Omanisation.

The problem is not going to go away by itself. With future income from the big extractive industries flat or falling (esp. on a per capita basis) our window of opportunity is limited.

Massive unemployment is the No. 1 threat to this country and our current way of life. We must act more coherently and decisively in our defense.

This is 2050...

*Disclaimer: In this article I will be making sweeping generalizations, and the exceptions make the rule. I’m not talking necessarily about individuals. I swear that the smartest, most talented, hardest working people I work with are Omanis, and they are as good or better than the best international competition. I also see many outstanding new Omani graduates and entrepreneurs – bright, keen to work, and intellectually curious. Many expats are also working very hard in difficult conditions, some for almost no salary, and a lot would probably say that if there was an Omani who could actually do their job they would willingly go do something else.


  1. Non-Arabic speakers might think of this as a new problem, but unemployment has been a big issue in the Omani community for years now, it is the ever lasting topic of discussion in Arabic forum and every single readers coloumn in Arabic newspapers. I think that we have already seen the worst of it, especially in the days when it was culturally unacceptable for Omanis to work as shopkeepers and truck drivers, but everyone agrees now that there is nothing with work and we all need to make a living. Nobody nowadays expects or even wants to get a government job. (Due to low salaries)

    The public schools curriculum has had many significant changes in recent years, English is now taught from the beginning, student can select subjects which are relevant to their university education, and specific lessons in the course teach students the various options available to students after finishing highschool (e.g. going into technical training and joining the work force directly without necessarily having a university degree if you can't afford it or if you are not good at school).

    Certain fields like the health service are already very Omanized, the medical school in SQU is not known for bad standards, many young people work enroll into nursing colleges, and the government spends fortunes sending people for study technical medical degrees.

    There are also significant transformations in society relating to this topic, like the fact that the average age at which people get married has gone higher, nobody dares to get married to more than one wife even though it is legal, and people can no longer afford to have eight children. Many Omanis are now willing to work in other gulf states like the UAE and Qatar, some students that had scholarships to study abroad try to gain a couple of years experience outside before coming back home.

    It is unfortunate that non-Arabic speakers do not really know much about the efforts that the government is already doing in this field and the changes in society. Obviously the majority of the Omani public do not speak English, and the Times of Oman and other English media-outlets, do not have Omani staff and are written by and for expats who live in their own isolated communities.

  2. Great article. To me, a Western guy, the biggest issue seems to be the mental attitude of many younger Omanis. From my perspective they see the jobs you describe above as being beneath them and continue to expect people to do the work for them.

    How to change this? There are going to have to be multiple initiatives, but a lot of the trouble starts at home - the children learn to act in a certain way from their parents (IMO).

  3. Great post, I agree with your point of view

  4. The need has been apparent to the Government since the 1993 census.
    As UD said Oman like all other countries has smart and hard working nationals.
    Read the editorial from the Times of Oman – you’d think it was bursting at the seams with Omanis – listen to the pontification of the Chamber of Commerce head and you’d think his companies would be heaving with Omanis – but they are not.
    Major companies are supported by the government with subsidies and exclusive agencies – but they are probably the worst at getting Omanis into jobs.
    Could it be the culture within those companies that deliberately excludes Omanis (imagine all they ways it can be done – and you bet it’s been done) .
    Small companies without wasta are not supported by the government with subsidies and exclusive agencies but they are compelled to run the extra cost of Omani staff.
    I was delighted to dine in Ubhar – apparently 100% Omani staff and a very acceptable meal.
    Look at the restaurants major hotels by comparison.
    It needs a ‘sea change’ in attitudes from both employer , employee and legislation (see what Bahrain is apparently going to do in a months time) – create a culture where ‘a jobs a job’

  5. UD, this is probably the best thing you've written and you've written some excellent stuff.
    I think Oman has grown up too quickly for its own good.
    Omanisation is a killer, literally. Its common knowledge Wasta is rife in driving tests, not only ROP but PDO as well. Omanis can only be taxi drivers, driving instructors etc so they are making themselves more vulnerable and that stats continually back this up.So, proportionally more Omanis will die or be disabled.

    I've already experienced the 3G Omani. What is the 3G Omani? Well, the older generation Omanis, perhaps in their 70's worked their balls off, made sacrifices and those who made it through have made a country to be proud of. Their middle aged children benefitted from this and made something of themselves which has helped this country progress. But their Grand children, the spoilt brats who drive around in sports cars clogging up the Shattis, disgracing the national dress by adding a baseball cap and trainers to the Dishadasher are an embarrasment. I came accross one who had broken English and a limited education but his father was well educated, spoke very good English and well respected. What is his job? A sponsor of a massage parlour where he brings in Morocan lovelies to service the community. Why work for a living when I've been left all this money?

    I genuinely fear for this great country. I only hope HM lasts long enough to do something.

  6. Good article on an important subject. Abd

  7. BlueChi,
    Many thanks for the nice & well thought comment. I agree things aren't too bad in Health (heck, we again beat the USA in a recent global review for overall quality for all people), but I suspect you are referring mainly of the State hospital system: the private polyclinics, Drs, etc seem to be not very Omanised. Any data?

    There is also growth potential in the business of regional medical services & 'operation tourism', if we get better.

    "not known for bad standards" is, I guess, pretty good compared to say, Yemen or Pakistan or India. But I'd like to think we can do a hell of a lot better than that. It's also a natural domestic growth market as the incomes of Omani's increase, and it's fundamentally a service industry that is by its nature hard to outsource (like hairdressing).

    Grand efforts and good intentions within Government, Arabic press discussion etc, not withstanding, I don't think we're doing enough 'results wise', and the numbers seem to say we are currently not making the cut. Pretending that it'll all be OK scares me. Fortunately we still have a bit of time to act.

    And Oman has the fundamentals of some significant regional competitive advantage.

    Slim, Per [welcome back], Abd, YNO,

    Thanks too. LOL the 3G stereotype. You may arguably be a bit crazy and driving obsessed, but that's OK by me.

  8. Not driving obsessed...road safety obsessed;-)

    There is a difference but don't worry, PDO and the ROP havent got it in 40 years!

  9. You missed out on the biggest possible emplyor in future.....Mining Sector and related activities....the potential is H.U.G.E


  10. UD - great and pertinent article. Maybe could add "relevant manufacturing" to the list of needed skills.
    I sometime get the feeling that Oman(i's) has/have begun to 'rest on their collective laurels' following a generation of great progress under the leadership of HM.
    The results of the last 5-8 years being turbo-charged by oil-price, global prosperity and good-times.
    Do Omani's have what it takes to get to the next level?? I am also a big fan of transparency, accountability, fairness and progress. To have this i think you also need the ability to honestly and critically assess/question ones performance. This does not happen in the English press in Oman - and there are many English speakers who are helping-out in Oman.
    The available media is worthless - I dont even bother these days'. They never take a risk, peel back a layer and appear to be nothing more than an advertorial of the 'Big 5' and a sycophantic lavisher of praise upon anything officially Omani.
    I know self congratulations have a wonderfully positive effect but i don't know any person, team, company or country that got better or the best that way.
    Maybe there is some soul-searching going on in Arabic or behind the scenes but why not bring it out into the sunlight??
    A good example in the region is the National in Abu Dhabi - a paper that has raised the level in the UAE.
    Well done on this - i read it a few times!

    Perhaps the T.o.O or the Week could run it in the letter to section????

    I am sure they all stop by here ;-)

  11. I am 35 yr old Omani, I would agree with most of what you have put. I hope our long lasting Ministers (like Macki you mentioned in the first article) could have the guts to read this. Frankly speaking, you can't speak about social issues without bringing politics in between. I think we have issues with leadership... we need a Prime Minister to lead all those ministers who are playing in their own farms.


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