UNCLAS SECTION 01 OF 02 MUSCAT 000541

SIPDIS

SENSITIVE

DEPT FOR NEA/ARPI(TROBERTS), DRL/IL(JDEMARIA),
USTR/JBUNTIN, USTR/AROSENBERG, DOL/JSHEA, DOL/ALEVINE

E.O. 12958: N/A
TAGS: ETRD ELAB PREL MU
SUBJECT: OMANIZATION: JOB CREATION, NOT REPLACEMENT

REF: A. MUSCAT 534


B. MUSCAT 142

C. 04 MUSCAT 1527

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SUMMARY
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1. (SBU) During labor consultations with Deputy Under
Secretary for Labor Arnold Levine, the Ministry of Manpower

SIPDIS
(MOM) reaffirmed its position that Omanization will not come
at the expense of performance and productivity. In
clarifying the practical aspects of Omanization, MOM
officials reminded DUS Levine that Omanization is actually a
quite dynamic process in which Omani and expatriate companies
work together to determine appropriate targets of localized
employment. (NOTE: Omanization targets to do not apply to
senior management. END NOTE.) Moreover, through this
effective immigration policy, Oman is able to maintain the
integrity of its expatriate workforce as well as increase
educational and employment opportunities for qualified
Omanis.


2. (SBU) While Omanization continues to be the backbone of
human resource development, calendar year 2004 actually
resulted in a 5.9 percent increase of expatriates employed in
the private sector compared to a modest 1.5 percent growth
for Omanis. Work ethics, minimum wage levels, and education
and training remain serious domestic challenges in the
practical application of Omanization. Despite the
government's emphasis on Omanization, the Sultanate continues
to rely heavily on expatriate labor, 90 percent of which is
from India, Bangladesh, Pakistan, the Philippines, and Sri
Lanka. End summary.


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OMANIZATION AND IMMIGRATION
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3. (SBU) In the course of four days of labor consultations
that began on March 14 at the Ministry of Manpower (MOM),
Deputy Under Secretary for Labor Arnold Levine (ref A),
learned about Oman's commitment to Omanization. But,
according to Manpower Minister Juma bin Ali bin Juma,
"Replacement of expatriate employees will not be at the
expense of performance and productivity."


4. (SBU) The MOM has continued to stress the dynamic nature
of Omanization, urging DUS Levine and other officials to
consider this a flexible process in which both the private
sector and government cooperate to

create sector targets.
Currently, targets of Omanization are set according to
recommendations by Omani and expatriate companies who sit on
sector committees. These committees determine appropriate
Omanization percentages based on negotiations, availability
of trained Omanis in various fields, and a given sector's
need for expatriate labor.


5. (SBU) The MOM emphasized flexibility in meeting target
Omanization rates. If a company cannot meet the target for
its sector, for instance, it may appeal to the MOM to
negotiate its employment needs, Omani and expatriate. The MOM
cited the example of Shangri La Hotels. Unable to meet its
initial 60 percent Omanization target, the company appealed
to MOM for assistance and subsequently negotiated a reduced
target of 40 percent with a long-term plan to meet the 60
percent goal. The MOM seeks to localize labor, yet, as with
the case of the Shangri La Hotels, maintain enough
flexibility in meeting the demands and needs for employment
of expatriates in the private sector (ref B).


6. (SBU) According to some officials at the MOM, Omanization
is not job replacement, but an effective immigration policy
to maintain the integrity of the expatriate workforce while
better meeting the needs of its rapidly expanding population
of job-seeking youth. In recent audits conducted by the MOM,
officials discovered that over 48 percent of registered
expatriates in the private sector who occupy jobs requiring a
university degree in fact do not have a high school diploma.
The MOM argues that while Oman is open to inviting
specialized expatriate professionals with the appropriate
qualifications, it seeks to fill unskilled jobs with Omanis.
Moreover, although Omanization continues to be the backbone
of human resource development, calendar year 2004 actually
resulted in a 5.9 percent increase of expatriates employed in
the private sector.

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LABOR STATISTICS
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7. (SBU) According to the latest statistics released by the
MOM, approximately 37 percent of Omanis employed in the
workforce were working in the private sector (an annual
growth of 1.5 percent), and 63 percent were employed in the
public sector. These figures represent a 50 percent increase
for both sectors in just under ten years. Oman's employment
database, the Public Authority for Social Insurance, tallied
over 87,000 Omanis registered for employment by the end of

2004. In a statement to the Omani parliament March 27,
Manpower Minister Juma elucidated on this figure, saying that
"30 percent of job-seekers are not serious, rather they just
register their names with the MOM but do not follow-up or
interview for jobs." He claimed that of the 48,710
newly-registered job seekers in 2004, the MOM located an
astounding 36,928 jobs.

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OMANIZATION TARGETS BY SECTOR
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8. (SBU) The Omani government has fixed the following targets
for Omanization by 2007: 90 percent for banking and finance
(currently 91.8 percent); 70 percent for oil and gas
(currently 67 percent); 30 percent for contracting (currently
22.5 percent); 50 percent for all jobs in the automotive
sector; 25 percent for jobs in information technology; 95
percent for marine services; 95 percent in travel and tourism
in the next five years; and 30 percent for academic staff
over the next ten years (ref C).


9. (SBU) In addition to targeted Omanization in several
sectors, foreign nationals may not be employed as technical
assistants, guards, heavy vehicle drivers, agricultural
workers, forklift or mixer operators, or public relations
officers unless the employer can show that there are no
Omanis available for the positions. Moreover, recent
regulations stipulate that only Omanis can be involved in the
sale of incense, incense burners, halwa (a traditional
dessert), and khanjars (traditional decorative daggers).
Vegetable and fruit sales, as well as the sale and repairing
of mobile phones, are also being Omanized in various
wilayats.


10. (SBU) In what appears to be a favorable development for
expatriate businesses and labor, the MOM has recently
introduced a new simplified visa process. The new program,
the Distinguished Transactions Card, will allow reputable
companies to have their expatriate visa applications cleared
more easily and faster.
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COMMENT
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11. (SBU) Omanization is at the forefront of Oman's domestic
economic agenda as it continues to grapple with education,
job creation, and immigration concerns. Omanization, while
aiming to achieve job creation for Omanis, has more
importantly served as a catalyst for educational
modernization and development. With over 60 percent of the
population under the age of 20, of which only a small
fraction have the opportunity to attend vocational or
university education, creating not just jobs but educational
opportunities remains the most pressing domestic challenge.
Echoing the need for training and education, one expatriate
businessman said, "If the Sultanate didn't have an
Omanization program, this country wouldn't move forward."
BALTIMORE