The much-anticipated Oman Labour Law, herein referred to as the New Law, was officially promulgated on 25 July 2023 by means of Royal Decree 53/2023. Effectively operational as of 26 July 2023, the New Law constitutes a substantial overhaul of Oman’s labor framework, strategically aligned with the overarching goals delineated in the Vision 2040 national agenda. This legislative revision supersedes its predecessor, Royal Decree 35/2003, thereby signifying a transformative shift in the regulatory landscape governing labor affairs in the Sultanate of Oman. Meanwhile, on October 31, the Royal Oman Police declared an immediate suspension of visas. Additionally, the Middle Eastern nation has put a hold on the conversion of tourist and visit visas to work visas for individuals of all nationalities. An integral facet of the new law is the concept of “Omanisation”, a pivotal element that lies at the core of recent ambiguities surrounding the visa policy.
Omanisation: Workforce Restructuring Paradigm
Workforce Localization Strategies
Employers are mandated to communicate annually with the Ministry of Labour, divulging their plans for localizing the workforce. This information, encompassing details such as the number of Omani employees, salaries, gender representation, and available job openings, must be accessible to the public within the workplace.
The recently enacted legislation explicitly sanctions the dismissal of non-Omani personnel when the rationale behind the termination is to substitute them with Omani nationals.
Training and Leadership Development
Every company is obligated by the New Law to formulate a comprehensive scheme for identifying and training Omani nationals for leadership roles, with a stipulation for ensuring the effective implementation of this plan.
Oman’s Strategic Labor Initiatives: A Comprehensive Analysis of Progress, Legal Amendments, and Economic Implications
Oman is currently poised to exceed the benchmarks set by its 2023 employment and replacement plan, having achieved 53 percent of its targeted job creation in the initial half of the fiscal year. The most recent statistical data released by the Ministry of Labor reveals that the cumulative count of newly generated positions within both governmental and private sector entities amounted to 18,716 by the conclusion of June 2023. In April, Minister of Labor Mahad Said Ba’Owain articulated his ministry’s objective to furnish a minimum of 35,000 employment opportunities throughout the year 2023. The employment and replacement plan, a governmental endeavor, seeks to amplify employment prospects for Omani citizens while concurrently substituting foreign labor with domestic workforce. The ministry further elucidated that job rotation transactions totaled 16,486, providing insight into the dynamics of first-time hires and reappointments, which collectively stood at 35,202. Additionally, the ministry disclosed specific figures pertaining to on-the-job training opportunities linked to the replacement of departing personnel and the induction of new employees, totaling 611 in the government sector and 1,537 in the private sector.
In July, Sultan Haitham bin Tariq issued a royal decree, effecting amendments to the extant labor law of the country. These regulatory modifications align with the strategic objectives outlined in Oman Vision 2040, meticulously considering the prevailing dynamics of the labor market. Minister Ba’Owain, in his commentary on the decree, emphasized its congruence with market shifts and developments, underscoring its manifestation as a testament to the leadership’s commitment to advancing Oman’s organizational stature. He expounded, “The law prioritizes the interests of both the worker and the employer, serving the collective interest by solidifying legislation that establishes equilibrium within the labor market and establishes a resilient foundation for the rejuvenation of Oman.” Faisal Al-Rowas, Chairman of the Board of Directors of the Oman Chamber of Commerce and Industry, contemporaneously asserted that the amended law would ameliorate the investment climate within the country, thereby enhancing the competitiveness of its labor market.
New Omani Policies: A Result of Domestic Changes, Not a Blow to Bangladesh
In its essence, these regulations prioritize the localization of the workforce in Oman, potentially affecting foreign workers, particularly those from Bangladesh, a substantial contributor to the global labor force. The emphasis on Omanisation goals, termination permissions, and leadership development plans, while aligning with national objectives, does bring increased attention to Bangladesh as a significant participant in the global workforce, necessitating a careful consideration of potential implications within the framework of these newly instituted laws. It is evident that the visa policy encompasses the broader global workforce interested in employment opportunities within Oman. The regulatory measures outlined in the policies apply universally, reflecting a comprehensive approach to managing and localizing the workforce within the country.
Bangladesh has exported a cumulative figure of 106,848 workers during the period spanning January to September 2023, representing 10.80 percent of the total exports. This contrasts with the corresponding figure of 179,612 workers, constituting 15.81 percent of the total exports during the equivalent period in 2022. Historically, Bangladesh achieved its highest annual export of workers to Oman in 2016, totaling 188,247 individuals. Subsequent years recorded export figures of 179,612 workers in 2022, 170,322 workers in 2012, 135,265 workers in 2011, and 129,859 workers in 2015. Notably, according to data from the National Centre for Statistics and Information (NCSI), Bangladeshi nationals predominate among expatriate workers in Oman, with a total of 703,840 individuals, surpassing the expatriate populations of other nations. Arabian Stories, a prominent English newspaper in Oman, corroborates this information, reporting that Indians constitute the second-largest expatriate group with a total of 530,242 individuals. The numerical breakdown further reveals that as of March 2022, the Indian expatriate population stood at 490,114, while Pakistani nationals accounted for 206,083 individuals. Presently, the Pakistani expatriate community has increased to 275,719 individuals.
The discernible preeminence of Bangladesh as the foremost contributor to the foreign workforce in Oman is not indicative of performance deficiencies on the part of Bangladeshi labor, as evidenced by its consistent status as the primary sender of workers in recent years. Furthermore, any critique regarding the diplomatic relations between Bangladesh and Oman remains unwarranted, as the prevailing circumstances can be attributed to internal legislative changes within Oman. Instead, commendation is merited for Bangladesh’s proactive approach in seeking alternative avenues. Maushumi Rahman, the Deputy Head of the Bangladesh Embassy in Muscat, recently articulated the nation’s commitment to ongoing exploration of the overseas labor market in Oman.
Hence, it is imperative to recognize that these changes do not singularly target any specific nation, in the long run, such as Bangladesh. The visa policy adjustments and labor initiatives are part of Oman’s broader strategy to engage with the global workforce, fostering a competitive and sustainable labor market. The commendable proactive stance of Bangladesh in exploring alternative avenues in response to these changes reflects a nuanced understanding of the dynamic nature of international labor relations. As Oman charts a course toward labor localization and economic resilience, ongoing diplomatic engagements and adaptive strategies are pivotal for nations like Bangladesh. The ascendancy of Bangladeshi workers in Oman is a testament to the historical contribution of this workforce, and diplomatic relations should be navigated with cognizance of the evolving legal landscape within Oman.
– Syed Raiyan Amir is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).
Published in Middle East Political and Economic Institute (MEPEI) [Link]