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Oman announces a new wage make sure workers aren't earning too much

On January 23, 2017

Some have speculated that the primary motive of recent Wage Protection Systems in Gulf countries is less geared towards protecting workers’ rights than increasing control over their accounts, spending, and personal information. Oman has quite bluntly admitted its intention to monitor workers' bank accounts and wages to ensure they are not sending back home more than they are contracted to earn.

The prospective Wage Protection System seems wholly oriented at "protection" of the Omani economy. Officials denounced last year’s OMR 4 billion (USD 10.3 billion) remittances as a "wasted investment" –  discounting the investment of migrants’ skills and labor essential to the country’s economy.

One of the few positive arguments coming out of discussions to keep expatriate funds within GCC borders is that more expatriates should be allowed to bring their families into the country. Lowering the minimum threshold for workers to sponsor family members (currently set at OMR600) would reduce the remittances sent back home to support families, redirecting the money to schools, transportation, and other services within the country itself.  It is worth noting that the proponent of this proposal is a Shura council member who has been among the most vehemently in favor of restricting expat remittances.

Similar moves are being considered throughout the GCC, as countries struggle to balance their budgets in the face of low oil prices. Saudi Arabia recently announced that it will not pursue proposals to tax expatriate remittances, while Kuwait is still considering the matter. The IMF recently stated that such attempts to control how workers spend their earned wages not only violates workers’ rights, but will not meaningfully impact budget deficits.