Budget 2010 has had a unanimous reaction from industry – very positive. In this climate, where reports of possible recoveries are being bandied around but with less authority than the gloom-and-doom news, the message sent by the budget is the best thing that could have happened to industry so far.
The reassurance of big projects, not only being carried through but new ones being started, automatically translates into more business for everyone.
While Oman has not been affected anywhere near as much as its neighbours or the world, and this has been repeated ad nauseam for the last many months – it still needed a budget like this to send the message home. The estimated higher expenditure by government at RO7.18bn, 12 per cent over last year with the current expenditure allocation going up by ten per cent over 2009, is balanced against revenue estimated at RO6.38bn.
This is based on an oil price of US$50 per barrel, that by all accounts – with OPEC maintaining its production cuts – should be more around the US$70 per barrel mark if not higher. A real GDP growth of 6.1 per cent, inflation lower at an estimated 3.5 per cent, a development-oriented budget (RO937mn allocated to new projects) – while it may not be exactly party time, it is still time to be upbeat.
On the manpower side there are a few concerns that are yet to be sorted out and this could end up as brick walls in a year where growth is the focus word. With the crackdown on illegal labour, a much-awaited move no doubt from the ethical and moral side, the fact remains that there are no immediate replacements for this group of workers.
While Omanisation is a necessary move and rightfully so from the ‘bigger picture’ viewpoint, the accompanying reality that needs to be addressed is the lack of skilled workers to fill in the jobs that are lying empty right now. There is talk of work being slowed down, of projects being delayed, and a lot of it is coming from the midsize companies. This is more serious as the midsize and small companies form the backbone of any economy.
Visa clearances for expatriate workers, both blue and white collar, are more difficult to obtain at the moment. When work needs to be completed to a schedule, and local manpower is not available, what are the options? The challenge ahead for the economy does not rest on economic incentives at this time in its history, as much as it does on the education sector. The challenge is to produce skilled and productive workers to drive the country ahead, not degree-holders.
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