Muscat – International Monetary Fund (IMF) has highlighted the need for Oman to create over 220,000 jobs for its citizens by 2032 to accommodate a surge in its working-age population.
According to IMF’s recently released Selected Issues Report on Oman, around 550,000 Omanis are expected to enter the age of working population within the next eight years, necessitating a boost in employment opportunities, particularly the private sector. ‘Considering the prevailing participation rate of 67% and the replacement of retirees – approximately 10,000 annually – around 220,000 new jobs will need to be created by 2032, against 103,000 jobs created for Omanis during 2012-2019.’
The report notes that Oman cannot continue to rely on the public sector as the primary employer due to fiscal sustainability concerns and efforts to reduce dependency on hydrocarbon revenues. ‘While the private sector has expanded, it remains heavily reliant on low-cost expatriate labour, primarily from South Asia. Expatriates currently account for 86% of private-sector jobs and dominate roles in construction, domestic labour and trade, which has driven down labour costs and bolstered competitiveness in nonhydrocarbon sectors.’
IMF points to several labour market inefficiencies, including sectoral segmentation, where Omanis dominate roles in state-owned enterprises (over 70%), such as electricity and mining, but make up less than 15% of the workforce in tourism, construction and real estate.
Additionally, most private sector jobs created for Omanis in the past decade were concentrated in low-paid roles within construction, manufacturing and administrative support, the report states.
It also highlights the persistent gender disparity in the labour market, with female participation at just 32% in 2023. This is despite Omani women outperforming men in educational attainment and test scores.
IMF suggests measures such as investing in early childhood education, expanding leadership programmes for women and improving access to financing for female entrepreneurs to encourage greater participation.
The report added that labour market trends favouring private sector employment and increased female participation continued post-COVID-19, with notable differences. Expatriate employment grew over twice as fast as national employment. Among Omanis, private sector employment rose by 18%, more than double the 8% growth in the public sector. Employment for Omani women saw the fastest growth, surging by 23% between 2020 and 2023, twice the rate for men at 10%.
To address these challenges, IMF underscores the importance of ongoing economic diversification under Oman Vision 2040, which could generate high-skilled employment opportunities for nationals. However, the report stresses that the success of these initiatives depends on upskilling and reskilling the Omani workforce. It also recommends maintaining a balance between integrating Omanis into the private sector and ensuring the labour market remains flexible enough to attract foreign investment and skilled expatriates.
© 2021 Apex Press and Publishing. All Rights Reserved. Powered by Mesdac