In the dried up river bed that runs through the ancient city of Nizwa at the foot of Oman’s rugged Hajar mountains, young Omanis gather most nights to eat meshkak – meat grilled on sticks – and trade stories about the day that’s been.

Nowadays, the stories going around at these impromptu barbecues is often the same: jobs – or rather, the lack of them.

“You come out of university,” one recently graduated student told Asia Times, who gave his name only as Fahad due to the sensitivities of the issue, “and even if you have a good degree and everything, there’s still nothing for you.”

Others agreed. “Unemployment’s a really big issue,” added another, calling himself Mohammed for similar reasons. “It’s the problem nowadays here in Oman. It’s very serious and something everyone worries about.”

Earlier this year, that concern erupted into days of protests in the capital Muscat and the port city of Sohar, as many Omanis came out onto the streets, uncharacteristically, demanding that the government take action.

After deploying armed police to restore order, the government promised to create 25,000 new posts in six months, while also halting new work visas for foreigners in a number of key sectors.

Yet here in Nizwa, and elsewhere, young Omanis say there is little evidence of this having an impact on their day-to-day lives. “We still can’t find jobs — suitable jobs for Omanis,” added Fahad. “And we still see work being given to foreigners instead.”

The latest International Labour Organisation estimate of unemployment in Oman was 17% for 2017, but youth unemployment was at nearly 50%. In a country where 40% of the population is under the age of 25, that made the Sultanate one of the worst job markets in the region.

Now, the worry is how this will play out, particularly as Oman faces the uncertainty of a looming accession crisis, leading to a widespread impression of paralysis in government.

“We love the Sultan,” says Fahad, “everyone does. But he is ill and we don’t know what will happen. No one knows, so the government is just waiting, rather than doing something that will really help.”

Economic downturn

While Oman does not have the oil and gas reserves of neighbors such as Saudi Arabia and the United Arab Emirates, hydrocarbons have been a staple of the country’s economy since their discovery back in the 1950s.

Their exploitation enabled the country to grow rapidly, with major construction and investment projects transforming the Sultanate in just a few decades. The oil and gas wealth was also channeled into creating large numbers of public sector jobs for Omanis, with many manual and less well-paid jobs being taken on by imported labor.

At the same time, many senior positions requiring skills and experience unavailable in-country were also given to expatriates.

It is a pattern repeated throughout the Gulf, except that in Oman the size of the local population is much greater than in the UAE, Qatar, Bahrain or Kuwait.

According to the Omani National Centre for Statistics and Information, there are around 2.5 million Omanis and two million expatriates currently resident in the country. In Dubai, the expatriate population is around 90%, according to the Dubai Statistics Centre.

This makes job creation for nationals in Oman a pressing issue. When there was money in the Sultanate’s coffers, the public sector could absorb many of these people, while a policy of ‘Omanization’ compelled public and private sector outfits to hire a certain percentage of locals, though that often meant employers paying higher wages.

Yet in recent years, Oman’s oil and gas reserves have been depleting. And in 2014, global oil and gas prices tumbled, staying low until very recently. This badly affected government revenue, plunging the state into deficit.

With the state the main driver of economic growth, the private sector also felt the pinch.

“Oman was among the worst prepared of the Gulf economies to deal with a period of low oil prices,” Jason Tuvey, senior emerging markets economist with Capital Economics, told Asia Times.

The Sultanate does not have the major financial reserves of some other Gulf countries to fall back on, leading the government of the 77-year-old ailing Sultan Qaboos to slash spending and start borrowing.

As a result, economic growth has fallen, sliding from 5.4% in 2016 to just 0.7% in 2017, according to the World Bank, meaning far fewer jobs to go around.

The downturn has also hit private sector companies who, despite the downturn, must continue to pay the higher salaries demanded by Omani workers hired under the Omanization policy.

“I can hire two engineers from India for the price of one Omani,” said an expatriate manager at a Muscat-based company who did not want his identity revealed, given the sensitivity of the subject. “But I have to hire the Omani because by law I must meet the Omanization quota.

“When business is tight, that means sometimes I lose money. Many businesses can’t absorb these costs and are thinking of closing. And then, all the Omanis too [will] lose their jobs,” he told Asia Times.

Great expectations

Now though, with oil and gas prices creeping back up, along with some major new gas discoveries and cuts to government spending reducing the requirement to borrow, there is some hope that the period ahead will see the Sultanate begin to turn the corner.

“Oman will likely muddle through,” said Tuvey, “although GDP growth is likely to remain sluggish in the years to come.”

That is not such welcome news for Fahad, Mohammed and their friends. While Fahad has been lucky to find a public sector job, Mohammed remains unemployed a year after leaving college.

“We studied, we got qualifications, we want to do what we are trained to do. And not next year or the year after, but now.”