Coronavirus: tens of thousands of foreign workers lose their jobs in Oman

Although the official cause was not stipulated, analysts said that the economic impact of Covid-19 was largely to blame

Indian nationals in Oman wait for a repatriation flight home on May 12. AFP

Over 27,000 foreign workers, mostly from the Indian subcontinent, lost their jobs in Oman this year, official figures on Tuesday show.

The National Centre for Statistical Information did not state the reason of the job losses but recorded a dip from 1.67 million foreign workers in February this year to 1.66 million in March and 1.65 million in April. The data for May have not yet been released.

Analysts say that the coronavirus pandemic is the main driver of job losses in the sultanate.

“I would say about 80 per cent of them have been made redundant due to the virus pandemic while the other 20 per cent due to normal employment adjustments. We expect more of them are going to lose their jobs in the coming months,” Said Al Kharusi, an economic analyst, said.

Oman said the pandemic has killed 37 people from a total of 8,118 infected people.

Statements released by several top private business companies in Oman said they “regretted” having to let go expatriate workers due to the challenges of the pandemic.

Government organisations like Oman Aviation Group, which controls national airline Oman Air, also released a similar statement last month.

Other analysts warned that more expatriates are set to lose their jobs as the government is expected to stick to spending cuts with a drop in oil prices.

“Most of these foreign workers who are losing their jobs are from private companies who depend heavily on government contracts. With falling oil prices plus the pandemic, the government will continue to cut spending to reduce deficits,” Abdullah Al Fahmi, a financial analyst, said.

Last year, Oman awarded contracts worth 250 million rials (Dh2.4 bn) to the private sector but oil prices this year forced the government to stop all contractual awards. Oman’s average oil prices this year has been $35 per barrel compared to $64 per barrel in 2019.

The budget for 2020 was based on an oil price of $58. It has estimated a deficit of 2.5 billion rials this year.

Over the last two months, the government ordered departments to cut spending by 10 and then an additional 5 per cent.