Amid a broader move toward economic diversification in the Gulf region, Oman has launched several initiatives to invigorate its local labour force, with a renewed focus on boosting women in the workplace. The efforts provide an example of how to energise private sector employment, especially by developing small and medium-sized enterprises (SMEs).
The World Bank classifies Oman as a high-income country. It is an oil-producing country but not a major oil exporter, with about 1 million barrels produced per day and proven natural reserves estimated at 5.3 billion barrels. Additionally, it has significant potential in fisheries, tourism and agriculture.
However, Oman relies heavily on migrant labour. Of its estimated 2.65 million-strong labour force, around 1.8 million are expats, and 850,000 are Omanis. Unemployment is currently low, at no more than 1.6% of the workforce. The total population is around 5.4 million. Of that, 57% are Omani, and the remaining 43% are expatriates from other countries.
Oman's public sector employs 375,000 nationals, and around 413,000 currently work in the private sector. The government wants to boost these numbers by expanding its private sector.
With its young population—its national median age being 29— human capital is one of Oman's best economic assets. This demographic means that inflows into the labour market will remain favourable in the coming years, supporting national policy goals, not least for the ambitious Oman Vision 2040 programme, which aims to create jobs and improve living standards in the country.
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Oman also has a high population growth rate, estimated at 4.4% for 2024. While this could provide a strong workforce in the future, which could reduce the country's reliance on foreign labour, it could also mean higher unemployment rates if there is any decline in government revenue.
Key to success
Success will depend on the government continuing to effectively leverage education and training to improve the skills of its citizens, with a focus on promoting science and knowledge-based industries. To this end, Oman’s Sultan Haitham bin Tariq has made this a top priority. "We will provide a supportive environment that motivates research and innovation," he said in a 2020 speech.
Its vocational and technical education allows students to enrol after completing the tenth year of school. The system focuses on providing students with the knowledge and skills needed for employment or entry into the higher education system, where they can get more training.
Part of the government’s efforts to boost private sector employment so far has involved reserving some jobs for Omanis, including roles not typically held by nationals in Gulf states. The list includes truck drivers, hotel receptionists, electrical technicians, marketing specialists, and information systems network specialists.
Approximately 94% of Omani girls receive an education, which has helped boost women's employment. Women now comprise 32% of the workforce.
Development programmes
Development programmes in place since the 1970s and the country’s relatively limited oil income have also helped drive change as it has diversified its economic base. Human resource programmes and training initiatives have boosted the national workforce and their overall contribution to the economy.
The government has built this capacity via tailored programmes developed in conjunction with the International Labour Organisation, which has helped formulate the relevant policies. This has included support for the development of SMEs, of which 120,000 had been established by the end of 2024.
