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Oman and Saudi Arabia step up their localization efforts in the private sector 

On August 7, 2022

Though high oil prices are fuelling strong economic recovery in both Oman and Saudi Arabia, the two countries are steaming ahead with localisation programmes. Both have recently issued ministerial decisions that ban migrants from certain jobs in the private sector.

Dismissing suspicions that stronger oil output may undo the Sultanate’s Omanisation drive, Oman’s Ministry of Labour issued Ministerial Decision 235/2022 on 14 July 2022 to localise 207 jobs.

Some managerial level positions and specialists in all sectors, engineers, technicians, as well as other jobs typically held by migrant workers including security guards and bus drivers, can now only be held by nationals.

According to the decision, existing work permits for non-Omani workers in the banned professions will be valid until they expire. The decision also incorporates and cancels some earlier Omanisation decisions.

For over a decade, Oman has struggled with high youth unemployment rates. This culminated in several protests, the last of which broke out last year in May. The Omani government has since taken a more aggressive approach to localise jobs to Omani citizens, which, in tandem with the pandemic, resulted in the migrant population dropping by 17.7% between the end of 2019 and 2021.

The country nonetheless remains dependent on migrant workers. Recently, the government significantly reduced fees for obtaining and renewing migrant labour visas, and migrant worker recruitment increased by 10.2% in the first half of 2022 compared to the end of 2021.

Meanwhile, Saudi Arabia’s ​​Ministry of Human Resources and Social Development (MHRSD) has recently issued six decisions to localise some professions and sectors, including thee following:

  • Aviation sector - Localisation of this sector will be executed in two phases, with the first phase beginning on 15 March 2023 and involving the complete Saudisation of copilots, air controllers, and flight dispatchers. The aircraft transport pilot and air host professions will be 60% and 50% localised, respectively, which will increase to 70% and 60% the year after. The new ruling will apply to all private establishments with 5 or more workers in the relevant professions.
  • Optics professions - Certain professions such as medical optics technician and physics laboratory technician, among others in the field of optics are set to be Saudised by 50% by 18 March 2023.
  • Vehicle technical inspection jobs - Certain professions such as site management, quality manager, and inspection technician, among others are set to be Saudised by 50% by 12 June 2023, and by 100% the year after.
  • Postal and parcel delivery services - The decision will target 14 activities in the sector, which will be Saudised by 17 December 2022. CEO roles will be 100% localised, and the first and second levels of top management jobs will be 60% and 70% localised, respectively.
  • Customer service professions - The decision will be applied to all professions classified as “customer service” and will be 100% Saudised starting from 17 December 2022.
  • Sales - Professions related to sales outlets in seven business activities will be 70% Saudised by 12 June 2023. Branch managers, supervisors, treasurers, customer accountants, and customer service representatives are among the jobs that are targeted for localization.

It is estimated that the decisions will provide Saudi nationals with over 30,000 jobs in the private sector. While the unemployment rate among Saudi nationals has decreased recently, it remained high at 10.1% in the first quarter of 2022.