Like other Gulf Cooperation Council (GCC) countries, Oman’s economic development has been heavily reliant on expats for a long time. The majority of the migrants there are Bangladeshis, Pakistanis, Indians, and Sri Lankans. However, Bangladeshis are now the largest migrant group in the sultanate.

Among 17.76 lakh migrants at the end of April this year, 6.98 lakh were Bangladeshis, according to Oman’s National Centre for Statistics and Information (NCSI). Data from Bangladesh’s Bureau of Manpower, Employment and Training, which has kept overseas employment records since 1976, shows only 113 Bangladeshis migrated to Oman that year, which rose to a staggering 18.63 lakh till September 2023.

These figures are a general testament to the substantial contribution Bangladeshis have been making to the Omani economy for decades.

In other words, growth in these two areas depends on each other. It is not just that unskilled expats are contributing to the non-hydrocarbon GDP growth. The non-hydrocarbon GDP is also rising because such migrants are working. The study found that this bidirectional relationship does not exist in the case of hydrocarbon GDP. In fact, the volume of labour appeared to have no significant impact on hydrocarbon GDP, which could be attributed to its nature as a capital-intensive sector.

Now a pertinent question here is how important the non-hydrocarbon GDP growth is for an oil-rich country like Oman. The sultanate’s economic growth is mainly driven by oil and hydrocarbon activities. However, the non-hydrocarbon sector also plays an important role.

Oman logged a 4.7% GDP growth at the end of the first quarter of 2023 against the same period last year, the NCSI data showed. The increase was primarily driven by non-petroleum activities that recorded a 4.6% growth while petroleum activities saw a 3.5% rise. Besides, petroleum covered 33% of the GDP while other activities, excluding construction, wholesale, retail, public administration, and defence, made up 44%.

The hydrocarbon sector, on the other hand, is dominated by local workers. According to the energy and minerals ministry’s 2022 annual report, Omanis made up 89% of the employees at the companies operating in the upstream and downstream of the oil and gas sectors. The Omanisation rate in these sectors was 85% in 2020. Similarly, Petroleum Development Oman, the country’s largest hydrocarbon producer, reported 86% Omanisation in 2020, which reached a record 90% in 2022.

Simply put, unskilled migrants from Bangladesh and other countries contribute to a segment of the economy where native Omanis are not largely present. It would be more accurate to say that Omanis do not want to be largely present in that segment. Ibtisam’s study noted that unskilled foreign labour is usually used for blue-collar jobs, especially during economic growth, as locals avoid jobs that require physical exertion and offer low wages. It also said some jobs, including those that are physically demanding and humbly compensated, have proven to be unfavoured by locals in the whole GCC region, including Oman.

We can thus say Oman’s dependence on Bangladeshi migrants involves jobs that Omanis do not want to do. So, the possibility that Omanis will replace Bangladeshis in that particular segment of the labour market can be quickly ruled out. Another possibility that migrants from other countries will replace Bangladeshis can also be ruled out. The share of migrants has grown in Oman for a long time and as mentioned earlier, the main migrant groups are from Bangladesh, Pakistan, India, and Sri Lanka. If other nationalities could, or were on their way to, replace Bangladeshis during this long period, the latter would not have grown as large as a migrant group.

We can conclude that neither Omanis nor other migrants could substitute for Bangladeshis. This, in plain language, means Oman does need Bangladeshis. In fact, Oman still needs Bangladeshi and other foreign workers both for skilled and unskilled jobs despite launching the Omanisation policy 35 years ago. The goal was to gradually replace expats with trained Omanis. However, migrants still made up 77% of the total workforce in 2022, according to the ILO, with Omanis dominating the public sector and foreigners mostly holding private jobs.

Omanisation also pushed up the share of Omanis in private jobs over the years, with the figure rising to 24% in 2021. Nevertheless, the public sector remains more attractive for Omanis as it provides higher wages and benefits as well as job security. Also, there are differences in labour policies between Omanis and expats pertaining to dismissal procedures, pensions, and other social security rules. These contribute to making Omanis less attractive and costlier as employees, the International Monetary Fund said in a 2022 report. Studies have shown that Oman’s economic growth depends on migrants as employers tend to favour them and often offer them lower wages compared to locals.

Given the multifaceted nature of dependence between Oman’s economic growth and Bangladeshi migrants, the sultanate should review the visa suspension decision as soon as possible. That it should do mainly for its own interests.