22/12/2014 05:42 AST
Oman, the largest non-Opec oil producer in the Arabian Gulf, may have to reform its generous public sector employment benefits and tackle the country's restrictive labour practices in order to increase the private sector's participation in employing young Omanis and deliver an effective labour force for the 21st century energy industry, Dr. Mohammed Al Rumhy, the Sultanate's Minister of Oil & Gas, said in a Gulf Intelligence Special Research Report on Oman.
Despite the government's efforts to strengthen the private sector, which accounts for nearly 60 per cent of the Sultanate's overall labour market, its impact on national employment has remained weak.
According to the Ministry of National Economy, only about a third of employed Omanis are presently in the private sector, with the majority of nationals working in the public sector.
"At the moment, the public sector benefits are very attractive, and they are not just material – less hours, close to home and comfortable environment. It's also the job security benefit. If you go in for a government job, you've almost got a job for life. So a number of our youth, unfortunately, go for that," Dr Al Rumhy said.
"But in the private sector things are toughening up a little bit and I think that's where the problem is. The private sector is not failing to recruit, but the desire to work in the private sector is declining," he further added.
Private sector participation among Omanis is also hampered by restrictive labour market regulations such as minimum wage requirements, which are discouraging many private sector companies from hiring larger numbers of nationals.
The 2014-15 Global Competitiveness Report released by the World Economic Forum (WEF) earlier this year states restrictive labour regulations as the most problematic factor for doing business in the Sultanate.
Oman had raised the private sector minimum wage for citizens by more than 60 per cent in 2013 to bring it closer to public sector levels.
Faced with a young and growing population, Oman is seeking to address critical challenges such as job creation through labour market reform, creating greater in-country value (ICV), supporting the development of small and medium enterprises (SME), and fostering education, innovation and human development as part of a broader strategy to transform a hydrocarbon-based economy into a sustainable, knowledge-based one.
Times of Oman
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