Oman: 15 percent unemployment, but jobs are open

Aisha Al Hajri can't afford to hire local workers for her chocolate shop because the minimum wage for Omanis is too high. Instead she gets workers from places like India and Indonesia, because there's no minimum wage for foreign workers in Oman.

A lot of people think that small businesses like Salma's Chocolates are the key to Oman's economic future. But a high minimum wage for Omanis--designed to encourage work in the private sector--makes it expensive to hire locals.

Larger companies in Oman are required to hire a certain number of locals. Smaller businesses, though, are exempted from the rules. And because it's so expensive to hire Omanis, many end up hiring foreign workers, like this one from the Philippines. There is no minimum wage for foreign workers in Oman.

Like its neighbors, Saudi Arabia and the United Arab Emirates, Oman has oil. But unlike others in the region, Oman’s supply is limited so it’s been trying to diversify the economy by encouraging small businesses, and pushing locals to work, especially in the private sector. The results have been mixed.

Salma’s Chocolates is a tiny café and store in the lobby of the Bank of Oman; it’s the kind of small business that a lot of people here think is the future of Oman’s economy.

What sets Salma’s apart from the competition are the local flavors it uses. “We have old sweets that started to vanish,” explained Aisha Al Hajri, one of the owners, “so we choose to take the old generation sweets like the halwa, the caramelized sesame and there’s a kind of sweet called mahoo, it’s like a toffee.

They source the sweets from local producers, and then fill their chocolates with them.

Although they pride themselves on local ingredients, Al Hajri and her co-owner (and the store’s namesake) Salma Al Hajri are the only Omani employees.

“The rest are foreigners,” Aisha Al Hajri said. “For a small business in Oman, it’s difficult to hire an Omani due to the minimum wages.”

Instead, they use foreign workers from the Philippines, India and Indonesia. There’s no minimum wage for foreign workers. (Although, Al Hajri, says, they do pay them a living wage.)

About 15 percent of Omanis are unemployed, but a lot of them would rather have government jobs, because they have shorter hours and other perks. To get more locals to work, the government has been raising the minimum wage for Omanis in the private sector.

David Mednicoff, director of Middle Eastern Studies at U Mass-Amherst, says changing Omani attitudes about private sector employment will be hard. “The new expectation they’re going to be shaping,” he said. “If you’re young, looking for a job, you can’t count on the public sector. This is going to be a very big shift."

Other countries in the Persian Gulf, like Qatar and the United Arab Emirates, also want more locals to work in the private sector; Mednicoff thinks Oman is more likely to succeed, partly because its native population is bigger.

But Aisha Al-Hajjri isn’t sure about that. She recently offered her young cousin a job, and the woman turned it down saying a private sector job just wasn’t stable enough.

A lot of people think that small businesses like Salma's Chocolates are the key to Oman's economic future. But a high minimum wage for Omanis--designed to encourage work in the private sector--makes it expensive to hire locals.

Larger companies in Oman are required to hire a certain number of locals. Smaller businesses, though, are exempted from the rules. And because it's so expensive to hire Omanis, many end up hiring foreign workers, like this one from the Philippines. There is no minimum wage for foreign workers in Oman.

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