The COVID-19 pandemic and expat exodus impact businesses that await better times
The double whammy of the COVID-19 pandemic and mass exodus of expatriates in the last one year has put considerable strain on the economy in Oman. Although reeling under stress, businesses are adapting to change and are hopeful of a rebound based on sound government policies to tackle the impact of the pandemic on the country.
More than a quarter of a million expatriates left Oman during the first 11 months of 2020, according to figures released by the National Centre for Statistics and Information (NCSI). Between January and November 2020, 272,126 expatriates exited the country.
The exodus has impacted certain sectors more than others, including the insurance, hospitality, retail and real estate. The effect on the last category was amply evident in e-Census 2020 – a total of 237,452 residential units (18.1 per cent) were vacant, including 77,233 flats in Muscat and 73,948 in the ten other governorates.
According to Santosh Unni Nair, architect and owner of Tashan Restaurant in Al Khuwayr, the business sector had been on a downward trend but the COVID-19 pandemic worsened the situation. “The exodus of expats has affected all the major industries starting from real estate to restaurant business. I’ve been in Oman for the last 18 years and have seen business boom in 2004, and the economic slump since 2016.”
Nair’s business is currently just 20 per cent of pre-COVID-19 volumes. He attributes the drop in business to the exodus of expats who contribute a major part to real estate and restaurant revenues. “Oman has taken the right step by allowing 100 per cent foreign investment companies which might again see more investments from other countries and bring in a change, and provide more opportunities to citizens as well as expats.” Nair, however, cautioned that all this depends on how soon the coronavirus threat is contained and the situation returns to normal.
Among the different ways businesses are adopting to tide over the current situation is reducing prices and rents. And while apartments in many buildings remain unoccupied, property owners are optimistic and hopeful owing to the new generation of Omanis who are expected to be on the lookout for homes soon.
Said Nasser al Rashidi, chairman of Al Nasr Investment and Development Company, said, “Many flats are empty due to so many expatriates leaving the country. Though my buildings are fine, I know many that are almost empty. We have been monitoring the situation and reduced rents.”
Rashidi also noted that there are 40,000 to 50,000 new graduates every year who are at the threshold of family life. “I am sure that we can cater to them as well in the near future.”
Mohammed Adil, country manager of UAE-based Afnan Perfumes, observed that the pandemic has affected both the expat population as well as citizens. “Expats also play a part in nation-building. But many left unwillingly which slowed down the flow of capital in the market. We are all interconnected in business. When one makes losses, we all make losses. Our business is in the luxury segment. The pandemic has dented our business. We want the situation to normalise soon.”
After losing jobs and livelihoods, many expats tried for months to sustain on limited means and savings, but finally left the country when push came to shove. Joy Antonete Jose Clark, a graphic designer, said, “The pandemic has affected most businesses in Oman. The revenue that businesses generate from expatriates contributes to their profits. Internal spending helps the economy. Less expats means less internal spending.”
Joy informed that her salary was cut owing to poor business.
“Because of the economic situation brought about by the pandemic, we’ve decided to go back home for good. I thank Oman for the years I’ve been here. At some point, we all have to return home, after all.”
Deepak Nair, CEO of Interactive Digital Media Technologies, attributed the exodus of expatriates largely to the COVID-19 and resultant job losses. “It is primarily because of the protracted longevity of this crisis, and the continued and baffling failure of scientists from around the world to find a durable and viable solution to terminate this scourge once and for all.”
Deepak described the losses his company made as ‘incalculable’, but considers himself lucky. “Due to our professional reputation, goodwill and the trust reposed in us by our customers in the market, we have managed to stay afloat, even in the face of such adversity.”