The combined wage bill of government civil ministries jumped 12.3 per cent to RO 1.935 billion in 2011, from RO 1.723 billion a year earlier, according to Ministry of Finance statistics.

The increase reflects the additional cost burden incurred by the government as a result of pay hikes, higher allowances, perks, and a monthly ‘cost of living’ grant introduced last year on the directives of His Majesty the Sultan.

It also covers the cost of absorbing thousands of unemployed Omanis into the government workforce in response to His Majesty’s call to the public and private sectors for jobs to be provided to nationals. However, the figure does not include the salary burden of military and security establishments which similarly opened their doors to unemployed citizens.

The aggregate wage bill of the civil ministries in question is made of four key components: Salaries and Wages; Allowances; Other Remunerations; and Contributions to the Pension Fund. Of these four components, the Salaries and Wages segment accounted for RO 904.5 million or 46.7 per cent of the total wage bill. Allowances amounting to RO 702.8 million accounted for 36.3 per cent of the total. The ‘Other Remunerations’ component (RO 170 million) made up 8.8 per cent of the total, while Contributions to the Pension Fund (RO 158.1 million) represented 8.6 per cent.

Significantly, allowances paid out by civil ministries ballooned by a hefty 29.5 per cent to RO 702.8 million last year, up from RO 542.9 million a year earlier. It represented the single largest increase over the past five years, surpassing the average 10 per cent year-on-year increase recorded over this period. Similarly, contributions to the Pension Fund soared almost 40 per cent to RO 158.1 million in 2011 from RO 113.1 million a year earlier.

Government expenditure towards social security and welfare more than doubled last year to RO 628.9 per cent, representing an increase of 123.7 per cent over the previous year’s tally of RO 281.1 million. The increase is partly attributable to across-the-board hikes in welfare and social security payments to Omani nationals.

The combined expenditure of civil ministries towards ‘Subsidies and Other Current Transfers’ ballooned by a staggering 254.4 per cent to RO 666.7 million last year, from RO 188.1 million in 2010. Responding to the job crunch, the government last year overhauled the 8th Five- Year Plan (2011-2015) to put a greater emphasis on human capital development. The revised plan sets out ambitious strategies for enhancing the quality of education and training with the ultimate goal of raising Omanisation levels across all sectors of the national economy.

Crucially, the amended plan envisages employment generation at the annual rate of 40,000-55,000 jobs, aggregating to between 200,000-275,000 jobs over the five year plan.
To tackle the immediate problem of unemployment, the government called for the creation of 50,000 new jobs for Omanis primarily in the public sector, but also in the private sector. Through the Manpower Ministry, the government also announced an unemployment payment of RO 150 per month until the recipient found gainful employment.

Further, with a view to improving living standards, the minimum wage for Omanis was raised from RO 120 per month to RO 200.