Oman has not been able to create enough employment because the number of new businesses launched every year has been declining significantly in recent years.
In 2015, the worst year for job creation in recent times, the private sector created only 9,500 new jobs, compared to more than 33,000 registered job seekers.
In 2014, a little over 14,000 new jobs were created for the unemployed pool of about 42,000. Currently, more than 55,000 are unemployed and the figure is set to rise by more than 20 per cent when new graduates are awarded their certificates this summer.
While the number of job seekers is swelling every year, the number of new businesses has been coming down. One does not have to have a degree in economics to connect the two.
Setting up of new businesses saw a fall of 28 per cent on an average in the last four years. If the policy is to pull young people out from the streets, the number of new businesses needs to rise, not plunge south.
The statistics also show that new businesses, depending on the size, create an average 34 positions each within 12 months of their establishment. The simple math will show that if 2,000 new businesses are created every year, these will absorb a significant number of new job seekers. Currently, less than 300 new businesses are registered a year.
But why is creation of new businesses on the decline? Apart from the usual problems of bureaucracy and funding, there are other problems that have been escaping the government’s scrutiny. Most of these businesses rely heavily on the local market. A very small percentage has any access to the export market.
The main reason is that they have no foreign partners to help them out. Owners not only lack knowledge about the export market but access as well.
The government needs to set up roundtable events across the nation with both potential entrepreneurs and existing ones and ask them about the obstacles they are facing.
It will give authorities an opportunity to hear of their frustrations and would help find ways to get them off
Oman is a diverse country and each region has different kinds of business challenges. The travails of an entrepreneur in Muscat are different from what another one faces in Nizwa or Salalah.
The roundtable interaction in each city can reveal the diverse range of obstacles encountered by each entrepreneur and how to work around the problems.
Part of the challenges they face could be resources, over regulation, lack of skills, availability of raw material, training or poor infrastructure.
Helping them out, in terms of policies, would provide solutions for better business creation and ensure long term survival in the market.
Through such help, successful creation of new businesses in different cities and towns would solve an inherent problem of employment. Currently, Muscat creates more than 80 per cent of the total jobs in the Sultanate.
Getting to the root of why there has been a decline in creation of new businesses would help youngsters find employment in their own home towns.
At the moment, thousands of them travel to Muscat to seek jobs. You don’t need statistics to know that. Just go to any job fair in the capital and ask the youngsters standing in the queue where they come from.
Ensuring that new businesses are created outside Muscat will yield other benefits. Business creation in the regions will open new venues other than Muscat. If such businesses started mushrooming in other cities, it would truly diversify the economy.
Job creation in the regions would also lead to the development of inner towns when businesses thrive there.
Creating the right environment for job creators must be a priority but that will not happen unless the government realizes that new businesses are vital to achieve this.
Since Oman has a large pool of talent in expats based locally, they need to be given an opportunity to help out. Expatriates come into the country with special skills and tapping into their experience is important to new business development.