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Omani Companies Fear PEIE Directives Will Hurt Business

A number of small to medium sized businesses in the Sohar Industrial Estate have expressed concern over the newly established regulations now proposed by the Public Establishment for Industrial Estates, or PEIE. These new regulations are the government’s response to the recent demonstrations in Oman for more economic security and improved working conditions for workers. The head of the PEIE explained to the Times of Oman that the Omani economy is strong and unhurt by the recent unrest, and in addition the Sultanate is anxious to protect the interests of business in Oman.

Business Leaders in Oman Worried

But the business leaders are nevertheless concerned that the PEIE directives will harm their profit margins and could even force them to move their businesses to other neighboring countries.

According to the Times of Oman there are now between 15 and 20 companies within the industrial estate which are likely to close down their businesses in Oman and move elsewhere. These companies have received an official communique from the PEIE explaining to them the same new requirements which companies with the Rusayl Industrial Estate have already been given.

Rusayl companies were told to begin to provide for a cost of living allowances ranging from RO50 to RO30, depending on the workers present salaries. The PEIE also directed the Rusayl companies to provide health insurance benefits of Omani employees and also begin to implement a five-day work week.

“I am running a small food processing unit. I am ready to pay the higher salaries. But if I have to pay for the cost of living allowance and medical health insurance benefits then I have to shell out at least extra RO3,500 per month.

This would be without considering the overtime payment. Moreover, I don’t have financial strength like bigger companies,” an entrepreneur said.

This same businessman also complained that he suffered a loss of 65,000 metric tonnes to his business as a result of the recent blockades at the Sohar roundabout.

“I will not be able to compensate it even if I work for extra hours the entire year,” he said.

PEIE Says There is No Reason for Worry

The CEO of PEIE, Hilal Al Ahsani said that he does not see any reason for concern in the industrial estate, and the government is highly motivated to promote and protect the business sector in Oman.

“A lot of new initiatives have been discussed and the government always follows a policy to promote industrial sector,” he stated.

But another entrepreneur said that the government is not showing the proper concern for their problems.

“We are running from pillar to post to resolve this issue. We don’t know whom we should approach to find a solution. If we have to follow these instructions then we should wind up our business. I heard that some companies in Rusayl Industrial Estate are also moving out to neighboring countries. Who will compensate for our losses,” he asked.

“The government should adopt plans to subsidize salaries of national workforce like other neighboring countries are doing,” he suggested.

Investors Hesitating to Invest in Oman

A financial consultant, Jose Chacko, warned that the economy of Oman could be adversely affected by the relocation of businesses out of the Sultanate.

“After witnessing the recent developments, investors are reluctant to pump in more money. The government should initiate steps to attract more foreign investment.

The establishments should be categorized based on their financial strength. Unexpected financial commitments will altogether disrupt their operations. So, a detailed study is a must to assess the latest situation,” he said.

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