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Report: Expats In Oman Sending Less Money Home

For years the Sultanate of Oman has been one of the top destinations of choice for expats from across the globe, primarily because of the lucrative earning potential it offers. The country has very high economic prospects thanks to its rich oil reserves. As a result, industry is booming and there is a constant demand for well‒qualified and skilled professionals from across the globe, primarily in the fields of engineering, healthcare, accounting and management.Since a number of construction projects are also under way, skilled immigrant workers from developing nations often get great offers too, enabling them to earn much more than they would back home.

For decades now, expats have received generous employment packages in Omani Rials (OMR) along wth tax free salaries and extra benefits when they moved to this peninsula. Many of them managed to put a decent amount away, even while leading a fairly comfortable life. The majority of these immigrants took up opportunities in Oman just so that they could send money to their families back home.

In the first half of this decade, the overseas remittances made from Oman showed a steady increase:

• In 2010: OMR 2.13 billion (US $ 5.53 billion; £ 4.31 billion; € 4.70 billion)
• In 2011: OMR 2.77 billion (US $ 7.19 billion; £ 5.61 billion; € 6.12 billion)
• In 2012: OMR 3.10 billion (US $ 8.05 billion; £ 6.28 billion; € 6.84 billion)
• In 2013: OMR 3.50 billion (US $ 9.09 billion; £ 7.09 billion; € 7.73 billion)
• In 2014: OMR 3.96 billion (US $ 10.28 billion; £ 8.02 billion; € 8.74 billion)
• In 2015: OMR 4.20 billion (US $ 10.90 billion; £ 8.51 billion; € 9.27 billion)

This shows that up until the recent past, expats were sending home more money from Oman than ever before. The remittance amounts almost doubled over a period of six years. This trend continued, even though the island experienced a significant economic slowdown. Interestingly, the number of expat workers in this destination also reduced slightly for a short duration, even though the amount of money sent home increased year on year.

However, in 2016, this figure saw a slight decline. The overall amount of overseas remittances fell to OMR 3.95 (US $ 10.26 billion; £ 8.00 billion; € 8.72 billion) that year. At the same time, the total number of overseas bank transactions out of the country went up from 30.8% to 37.3% in a span of a year. This could be due to the fact that the blue collar workforce has increased threefold over the last ten years or so.


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According to a report released online by Central Bank of Oman, a major chunk of the gross domestic saving was sent out of the Sultanate in the form of current transfers (like remittances by laborers) as well as investment incomes (such as net interest and dividends that are paid on external liabilities).

The report further went on to state that the country’s gross national saving as a percentage of the GDP fell to 20.1% in the year 2015, compared to a rate of 39.5% in the past. This indicates a leakage of savings, to the extent of around 19.4%, going out of the nation. The gross national saving rate of 20.1% was a lot less than the domestic investment rate of 33.8%, thereby leading to a disinvestment of foreign assets overseas, as the net inflows under capital and financial accounts fell short of the current account deficits.

The remittances that were sent overseas would have been very useful for Oman. If the money had been used for spending or investment within the country the benefits would have been enjoyed by the domestic economy. The Sultanate’s budget deficit went up by half a billion Rials, from OMR 4.2 billion (US $ 10.90 billion; £ 8.51 billion; € 9.27 billion) in 2015, to OMR 4.7 billion (US $ 12.20 billion; £ 9.52 billion; € 10.38 billion) in 2016.

A Shura member, Nasser Al Khamisi, spoke with the Times of Oman and said that the huge amounts being sent overseas were creating a negative impact on the country. He referred to them as wasted investment opportunities for Oman and said that they absorb the local wealth, taking a huge chunk out of the national budget.

Al Khamisi added that expats should be allowed to bring their close kin into the country, even if they earn less than OMR 600 (US $ 1,558; £ 1,215; € 1325) per month. A major chunk of foreign remittance is made by blue collar expats, who leave their families back home in search of high‒paying jobs. These workers remit a huge percentage of their salaries overseas.

The National Center for Statistics and Information (NCSI) has also published its Statistical Handbook for 2017, shedding some light on Oman’s economic journey. This report includes data on expats within the country, between 2007 and 2016. By the end of 2016, the expat population had gone up to 1,986,000 from 820,000 in 2011.

According to the President of the Bangladesh Social Club, most people arriving in Oman today are blue collar laborers, who save up and send home a major part of their salaries.

Shazia Jahazeb, Managing Director of Four Stars, said that though the expat population has gone up, the overseas remittance is no longer in proportion. This means that the immigrants are either earning less than they used to or are sending home less money. She added that it was difficult to be sure about the exact reason, but as long as there was a rise, the economy was likely to be in good shape. Jahazeb pointed out that her employees had been sending back almost the same amount of money as they did in the previous years.

Imtias Sikder, a financial analyst based in the Sultanate, has stated that the slowdown of remittances this year is a healthy sign. He said that a small rise was good but too much was bad. The flattening of the curve was a positive sign, which showed that the money was staying in the country, without going any lower. He also stated that his people were sending home the same amount as they did last year, thereby indicating a healthy slowdown in foreign remittances.

Statistics show that the biggest percentage of the expat labor community in this country is made up of Bangladeshis (around 695,000 people), closely followed by Indians (about 692,000 individuals). If their family members are allowed to live with them in Oman, they will use schools, transportation, healthcare and other services locally. The Sultanate will therefore be able to generate higher revenue, which in turn would increase the number of jobs available. Expats in turn would not be required to send high amounts of money back home.

Of course, the cost of living on this island is not exactly low. While people may lead a good standard of life, they are likely to spend a lot more than they do back home, especially if they are from other Asian countries. As a result, they are not likely to put any amount away towards their savings. It is therefore best to calculate all possible expenses and compare the total with the expected revenue. Draw up a monthly budget based on your income as well as your basic requirements and make sure that you stick to it.

Maximizing Savings in Oman

Expats find that the cost of living in this Sultanate is relatively low compared to many of the other Gulf countries. However, as is the case in many other places, living expenses are much higher in the capital. According to the Mercer Cost of Living 2017 Survey, Muscat ranks 94th out of 209 cities.

Westerners tend to get handsome remuneration packages inclusive of tax‒free salaries, an annual bonus, accommodation for the family, local conveyance (a car), medical insurance and educational allowance (for families with children). The majority of the organizations also pay for their expat employees’ visa and health check costs. This enables immigrants to save a significant portion of their salaries, which they are free to send home or invest locally.

Heavy remuneration packages are only made available to expat managers in top positions. Skilled laborers, who form a considerable part of Oman’s workforce, do not get such perks. Many of these workers settle for low‒paying jobs, just to ensure that their contracts are not terminated. Their companies may pay for their visa costs and offer them shared accommodation, but they don’t get any other allowances. They therefore end up paying for most of their daily expenses including rents, utilities, food and travel. As a result they save very little money, which they usually send to their families back home. Fortunately, it is still possible for people to enjoy a fairly good quality of life while maximizing their savings.

The real estate market in Oman has eased a lot since its peak and prices of accommodation are gradually coming down, in line with the rest of the Middle East. Moreover, construction is constantly on the rise and new homes are being made available every day. Expats are therefore bound to find a place that suits their lifestyle and budget.

Rents are generally lower in more remote areas, compared to the heart of the city. You can lease a bigger home in a new building with better amenities by choosing to live in the outskirts. Generally, apartments in Oman are rented without any furniture, so remember to factor in the amount you will spend on basic furnishings when you plan your budget.

Landlords usually ask for all the rent to be paid in advance, instead of accepting monthly payments. Since this amount is huge, several employers loan it to their workers. However, if you leave the property before the contract time is up, the money is not refunded.

Utility costs are almost never included in the rent. Fortunately, these services are available to residents at subsidized costs. Electricity bills tend to rise drastically during the summers as people need to use the air conditioning all the time, even to cool the premises when they are not around. Newcomers should therefore avoid keeping the air conditioner on excessively.

Since the government is encouraging international investments and businesses, the authorities have kept the cost of international phone calls relatively low. Most expats therefore tend to go overboard, spending more than they should to keep in touch with people back home. Fortunately, new technologies and apps are available to minimize this expense.

Owning a vehicle in this country is quite cheap in comparison to many other places. Almost all expats here have their own cars, and therefore don’t find it necessary to rely on public transport. People in the upper income groups also have chauffeurs to drive them around.

Taxis are in theory not expensive but many of them are without meters and passengers often find themselves paying exorbitant amounts quoted by the drivers. You can either settle on the price beforehand or use the bus service to commute for longer distances.

Food in Oman is very cheap, especially if you eat like the Omanis and consume higher amounts of the local produce. At the same time, you will find a wide variety of imported products available at the bigger supermarkets, but these are very expensive. Eating out on a regular basis can be quite costly too, unless you frequent the smaller stalls and joints. Buying alcohol in this nation is an expensive and complicated affair.

The entertainment options that are popular among expats tend to be overpriced. These include snorkeling, dolphin sightings and sunset cruises. You can easily have a good time while saving money by visiting the cinema, a beach or a park instead.

Do keep in mind that it is possible to save money and remit it home, as long as you plan your lifestyle carefully.

Have you lived in Oman? Share your thoughts in the comments below, or answer the questions here to be featured in an interview.


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