Expats in Oman Could Be Hit By Benefit Cuts

Like many countries who rely on oil as the backbone of their economy, Oman’s finances are under increasing pressure.

According to the Times of Oman the country’s budget deficit currently sits at a crippling OMR 3.5bn, something that the government is understandably keen to reduce.

This is equivalent to a 15% overspend last year, which is expected to grow further in 2016.

Over recent months the Omani government has, like so many others, been going through a painful process of belt-tightening.

Looking for ever more ways to reduce the deficit, it now seems that expat workers could be in the firing line for some of these budget cuts.

A recent announcement suggests that expat workers at state-owned companies run with 50% or more government funds may find themselves affected. The precipitous drop in crude oil prices over the last year means that government officials are proposing to reduce or even eliminate the benefits that many expats have learned to expect as part of their remuneration.

At present many expats enjoy a variety of benefits in addition to their salary. These can include housing allowances, financed airfares home, health insurance and even domestic staff in some situations.

The new decree aims to put a hold on all such benefits for applicable expat workers; not just putting a stop to inflationary increases but even proposing to eliminate them altogether.

It is no secret that an expat worker’s salary often only represents a small part of the total package that many enjoy. Allowances for housing, transportation and air travel all help expats to make ends meet. Indeed, many expats in non-English speaking destinations rely on such allowances to help them educate their children at private international schools which, almost universally, charge hefty fees.

Without these benefits questions persist as to how expats will respond. Some, no doubt, will knuckle down and try to make the best of a bad situation. However far more expats have been vocal on social media and discussion forums simply stating that the costs of living in Oman make such an exercise unappealing. Many expats claim they will simply be unable to make ends meet without these additional incentives.

Worst of all it’s not just these “perks” which could dry up very soon; even benefits that non-expats have got used to such as bonuses or incentives for working during Ramadan could also be slashed if they do not make up part of an expat’s key performance indicators.

For many expats in Oman, these latest brutal cuts could spell the end of life in the Kingdom. Many expats have taken the internet to express their dissatisfaction and to state that they plan to vote with their feet. It seems likely that these cuts will result in a considerable loss of expat talent in Oman, many of whose most qualified workers will be looking for better-paid opportunities elsewhere in the world.