VZCZCXRO2410
RR RUEHDE RUEHDIR
DE RUEHMS #0153/01 0511144
ZNR UUUUU ZZH
R 201144Z FEB 08
FM AMEMBASSY MUSCAT
TO RUEHC/SECSTATE WASHDC 9290
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0036
RUEHHI/AMEMBASSY HANOI 0012
RUEHJA/AMEMBASSY JAKARTA 0022
RUEHKT/AMEMBASSY KATHMANDU 0021
RUEHML/AMEMBASSY MANILA 0042
RUEHNE/AMEMBASSY NEW DELHI 0300
RUEHC/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 02 MUSCAT 000153 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP, G/TIP, DRL 
DEPARTMENT OF LABOR FOR JRUDE 
 
E.O. 12958: N/A 
TAGS: ELAB ECON MU
SUBJECT: EXPATRIATE LABOR RETAINS SIGNIFICANT PRESENCE IN 
OMAN 
 
 
¶1. (SBU) Summary: The number of expatriate workers in Oman 
grew in 2007, particularly among low and semi-skilled 
workers.  Oman continues to rely on India for the bulk of its 
private sector workforce, but increasingly is looking to 
other countries as sources for labor.  Contacts suggest that 
Oman also has a growing population of undocumented workers, 
which likely will continue to increase as Oman's economy 
expands.  End summary. 
 
- - - - - - - - - - 
More Expats in Oman 
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¶2. (U) Labor statistics released by the Ministry of National 
Economy show a substantial rise in 2007 in the number of 
foreigners working in Oman.  In December 2007, there were 
638,447 registered foreign workers, a 25% rise from the 
510,700 that the Ministry reported in December 2006.  By 
comparison, Omani citizen participation in the private sector 
- measured by employees registered with the Public Authority 
for Social Insurance - rose only 15% to 131,775.  By the end 
of 2007, expatriates accounted for 80-85% of the country's 
private sector workforce.  By contrast, according to the 
latest government statistics, foreign labor accounted for 
only 15% of the approximately 140,000 civilian and 
non-security service public sector workforce. 
 
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Competition for Skilled Workers 
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¶3. (SBU) Contacts say that the overall increase in Oman's 
expatriate workforce masks a decline in the entry of skilled 
workers from India, Oman's primary labor source.  (Note: The 
Indian Chief of Mission in Muscat (protect) recently told the 
Ambassador there are 432,000 registered Indian workers living 
in Oman, up from 388,000 in 2006.  End note.)  Oman is 
engaged in a competition for high-skilled expatriates with 
other countries in the Gulf Cooperation Council (GCC) and 
South Asia, and India's engineers, technicians and managers 
are in high demand.  Contacts in government and business 
report that skilled Indians often command higher wages than 
Oman's market can bear.  As a result, fewer of them are 
coming to Oman.  The Ministry of Manpower's (MOM) Director 
General of Employment recently told poloff that Oman 
currently is facing an acute shortage of engineers -- jobs 
that skilled Indians traditionally filled.  Minister of 
Manpower Juma bin Ali al Juma noted to the Ambassador during 
a recent meeting that with Indians increasingly choosing to 
work in other labor markets, skilled workers are becoming 
"harder to find." 
 
¶4. (SBU) The drop in the supply of skilled Indian workers is 
creating opportunities for other labor exporting countries to 
enter the Omani labor market.  In his meeting with the 
Ambassador, Juma stated that Oman actively is looking for 
additional sources of labor to address the private sector's 
needs and is recruiting from non-traditional sources such as 
Vietnam and Nepal.  He added that he expects China to gain a 
larger presence in the Omani labor market and become a 
lower-cost source of skilled labor. (Note: A Chinese diplomat 
told poloff that there are approximately 1,000 Chinese 
nationals in Oman, most of whom work for Chinese state-owned 
companies in the oil and gas sector.  End note.)  In 
addition, the Philippine labor attache informed poloff that 
demand for skilled Filipino workers has increased recently, 
particularly in areas seeing major new project development 
such as the northern port city of Sohar. 
 
- - - - - - - - - - - - - - - - 
Increase in Low-Skilled Workers 
- - - - - - - - - - - - - - - - 
 
¶5. (SBU) The Ministry of National Economy's statistics 
indicate that Oman's economy continues to be heavily 
dependent on expatriate workers to carry out menial and 
physically demanding labor.  Sectors that employ low and 
semi-skilled workers were the biggest drivers of the increase 
in Oman's expatriate population.  The construction sector 
added 65,206 new expatriates to the workforce and accounted 
 
MUSCAT 00000153  002 OF 002 
 
 
for 35% (221,432) of the total population of foreign workers. 
 The wholesale/retail and manufacturing sectors together 
brought approximately 22,000 foreign laborers to Oman in 
2007, increasing their shares of the expatriate workforce to 
20% and 11%, respectively.  Domestic and agricultural workers 
each accounted for approximately 10% of the expatriate 
workforce. 
 
¶6. (SBU) Contacts say that the composition of this 
low-skilled workforce is gradually changing, due in part to 
new minimum contract wage regulations that some labor 
exporting countries have adopted.  Demand for Filipina maids 
decreased, contacts claim, after their government instituted 
a minimum wage of 160 OR (USD 400) in March 2007 for all new 
foreign employment contracts.  Other countries also 
instituted higher contract wages for their nationals but kept 
them below the rate established by the Philippines, which 
helped to increase their share of the market.  A consular 
officer in the Indonesian Embassy in Riyadh, which has 
responsibility for Oman, said that the number of Indonesians 
living and working in Oman has increased despite the fact 
that Indonesia raised its minimum contract wage requirement 
to 75 OR (USD 200) from 58 OR (150 USD) in October 2007.  He 
claimed that while Oman reports an official number of just 
over 18,000 Indonesians in country, the number of new 
employment contracts he has approved suggests that the actual 
number likely exceeds 20,000 -- 90% of whom are housemaids. 
India has the lowest minimum wage required for contract 
approval at 50 OR (USD 130) plus 15 OR (USD 40) for food, 
which has kept demand for low-skilled Indian workers high. 
 
- - - - 
Comment 
- - - - 
 
¶7. (SBU) The growth in expatriate labor captured by the 
Ministry of National Economy's statistics likely will 
continue.  In light of its growing economy and ambitious 
diversification plans, Oman needs foreign workers in skilled 
and unskilled positions to maintain its current activities in 
tourism and manufacturing and especially to carry out the 
physically demanding work in sectors like construction.  The 
statistics do not capture the full size of the expatriate 
population, however.  Illegal, undocumented workers also are 
contributing to Oman's economy.  The Indian Chief of Mission 
told the Ambassador, for instance, that there may be as many 
as 80,000 undocumented Indian workers in Oman.  The 
population of illegal workers likely will increase along with 
the number of documented laborers as Oman's economy continues 
to expand. 
GRAPPO