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Oman Intensifies Localization Strategies

[Logo of Migrant Rights. Image from migrant-rights.org] [Logo of Migrant Rights. Image from migrant-rights.org]

[The following briefing was published by Migrant Rights on 13 February 2014]

Nationalization policies in Oman and the wider Gulf region are not new; many programs began in the late 1980s and enforcement has since fluctuated – often waning in periods of heavy development and revived in economic downturns. The spade of crackdowns and mass deportations in 2013 encompassed a renewed implementation of localization schemes throughout the Gulf, largely to pre-empt rising national unemployment and the social unrest that would necessarily follow. Though the Saudi crackdowns featured most prominently in international media, similar policies were also implemented in Kuwait and Oman.  Most recently, Oman announced that companies failing to employ nationals will be effectively prohibited from operating starting March 1. Similar to Saudi Arabia’s Nitiqat, Omani companies are ascribed different grades based on the proportion of nationals in their work force. Omanization and wider Gulf localization policies aim to increase the employment of nationals and reduce dependency on expatriate labor, a policy objective at the sovereign discretion of any state. However, the means and the narrative employed in these schemes too often transgress upon the rights and dignity of migrant workers.

Omani officials held that the new laws target illegal visa trading, in which citizens sell the visas allocated to them under the sponsorship system. Visas are sold to migrants directly as well as to employers seeking to recruit expatriate workers cheaply or to circumvent quotas on expatriate employment.  Migrants typically pay their stand-in sponsors for the initial visa and a yearly fee in order to renew their visas while working for another employer. In some cases, migrants also pay a percentage of their monthly salaries to these sponsors.  Migrants who work for an entity other than their registered sponsor are considered illegal and if discovered face fines, imprisonment, and deportation. Though Omani officials recognize that this black market often serves to exploit migrants, they have not acknowledged that the root cause of visa racketeering is the sponsorship system itself; the linkage which renders visa-trading a profitable enterprise is the very coupling of legal residency with the sponsorship of Omani citizens, yet no reforms to address this vulnerability have been proposed.

Instead, Oman’s new labor migration policies may render visa trading and other forms of undocumented migration even more likely. In the past, many of the Gulf’s aggressive nationalization schemes only marginally or temporarily reduced the proportion of either documented or undocumented migrant workers for several reasons including: the low availability of locals willing or able to perform expatriate jobs; the deleterious economic effects of rapid workforce depletion; and the impracticality of permanently enforcing inspections or ‘closed borders.’  Though Oman is poorer than its Gulf compatriots and possesses the lowest proportion of expatriates (estimated at 44% in 2013), its localization policies are likely to suffer from the same issues of inefficiency and noncompliance.  Local businessmen have indicated their opposition to the new law, stating that small and medium-sized businesses especially will be devastated by the abrupt introduction of these requirements.

In the past, mass raids against undocumented workers have had deleterious effects even on sectors of the economy maintained by nationals; for example, Oman’s 2010 mass deportations severely undermined Muscat’s taxi services, which predominantly served migrant workers who could not afford vehicles. Omani drivers reported massive reductions in earnings and many faced difficulty obtaining other work to compensate their losses. Deportations of illegal workers consequently had a negative impact on national employment, as the taxi enterprise represented one of few occupations accessible to older nationals who lacked an education or trade.

The scheme appears particularly overzealous in light of Oman’s preceding localization strategies, which has had the affect of introducing only 139 migrants into the workforce last December. These moves include a six-month ban on expatriate recruitment in cleaning and construction sectors for smaller companies, which officials claim facilitate visa fraud. In 2013, increased raids and inspections led to the apprehension of over 13,000 undocumented workers and the cancellation of over 16,000 visas.

Furthermore problematic is the narrative on migration that necessarily accompanies these policies in order to justify their implementation to aggrieved businessmen and to redirect accountability for economic troubles; in particular, Gulf states locate migrants as the cause of unemployment in order to scapegoat mismanagement of bloated public budgets.  Despite migrants’ low wages and their contribution to essential infrastructure and revenue-generating tourist destinations, states criticize the volume of their remittances as exploitative of national resources.  These accusations are supplemented by exaggerated claims, such that expatriates in managerial positions take a 95% cut of local businesses. Sponsors are likely to charge a much more significant cut of any business for which they are legally responsible, particularly as migrants are entirely dependent upon them for their legal residence and income.  Furthermore, officials often fail to acknowledge the revenue produced by these businesses nor the need for their services.  In Saudi Arabia, such oversight during the initial stages of Nitaqat enforcement caused a severe stoppage of vital services and inflation in the cost of consumer goods. Shops closed, schools went without janitors, and even burial services were affected by raids that depleted the work force and deterred even documented migrants from appearing in public. Though some of these effects have tapered alongside a reduction in the intensity of these inspections, the negative impact remains evident in sectors such as construction, where 33% of planned projects have been canceled. The economic consequences of nationalization programs that are largely inconsiderate to states’ economic systems and migration regimes are the very reasons their enforcement eventually subsides.

Furthermore, the zeal with which localization projects are implemented highlight the government’s misplaced prioritization of migrant issues; while resources to monitor critical employment issues – such as safety and housing conditions or timely salaries – are scarce, inspections for nationalization compliance are attentively conducted at least in the first few months of implementation. Penalties for visa and quota noncompliance are also more thoroughly enforced than those for labor violations.

Though states possess a sovereign right to restrict migration, policies must be implemented with sensitivity for migrant workers’ rights. Globally, states often approach migration from within security and economic frameworks, displacing rights-based approaches. This paradigm is compounded by Gulf governments’ conception of migrants as a temporary, flexible, and therefore disposable workforce; on international platforms, Gulf states are careful to classify expatriate workers as contractual laborers rather than migrant workers in order to deflect accountability of U.N. labor and migration treaties. Domestically, states perpetuate and harness these perceptions to use migrants as a policy tool, obscuring their human and labor rights in the process.

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