Ambitious reforms in Oman pave way to universal social protection
Newly approved legislation, developed with the support of the ILO, radically reshapes the social protection system in the Sultanate and is set to become a reference for countries in the region.
BEIRUT (ILO News) – H.M. the Sultan of Oman Haitham bin Tarik issued earlier this week Royal Decree No. 52/2023 promulgating the Social Protection Law. The new law marks the culmination of an ambitious reform process led by Tawazun, the high-level government programme for fiscal balance (now Estidamah), with the close support of the ILO.
The comprehensive reforms entail a complete restructuring of the contributory pension system, with the integration of 11 pension funds into one single national scheme to cater for all workers in the private and public sector. Oman is also the first country in the Gulf Cooperation Council (GCC) to establish a social insurance scheme for maternity and paternity, and sickness cash benefits.
Amongst ground-breaking features, the new law introduces government-funded universal social protection benefits, including a cash benefit for all children under the age of 18, a universal old age pension for senior citizens over the age of 60, and a universal disability allowance. In a bid to increase efficiency and coherence, all government and contribution funded social protection benefits will be administered by Social Protection Fund, a newly established unified social protection agency.
The new law also significantly expands protection to migrant workers in Oman, who represent over three quarters of the country’s working population. Migrant workers will be covered for employment injury, maternity and sickness under the same terms as national workers. For the first time in the region, a national provident fund will also be established to administer end-of-service benefits to migrant workers.
The reforms set a new regional benchmark for alignment with international labour standards in the area of social security, and the progressive realization of a rights-based universal social protection framework, in line with ILO Social Protection Floors Recommendation, 2012 (No. 202).
“Inspired by the principles enshrined the Omani Constitution and the goals expressed in its Vision 2040, the Government has embraced improving well-being and social protection as a central strategic priority. As Oman strives towards a more diversified and productive economy, protecting people remains at the core of its commitments. Rights-based and inclusive social protection are essential pillars for fostering sustainable economic progress, ensuring that no-one is left behind,” said H.E. Nasser Al Jashmi, the Secretary General of Ministry of Finance and Supervisor of the National Program for Fiscal Sustainability and Financial Sector Development (Estidamah).
"We congratulate the Government, employers and workers in Oman for achieving this major milestone,” said Ruba Jaradat, ILO Regional Director for the Arab States. “The new legislation sets a new vision for social protection in Oman and paves the way towards universal social protection in the Sultanate, establishing Oman as a reference for other countries in the region. Inclusive, comprehensive, equitable and sustainable social protection systems are critical for countries in the region to further ongoing social and economic transformations. Oman is showing that ambitious change in the region is possible, when it is rooted in international labour standards, careful analysis and social dialogue,” she added.
“It is difficult to overstate the magnitude of the series of reforms Oman has set out to tackle: from fully revamping the tax and subsidy system, to completely restructuring its pension and contributory social protection system, to an ambitious re-think of its approach to reaching the most vulnerable in society, and providing migrant workers with key workplace protections,” said Mia Seppo, ILO Assistant Director-General for Jobs and Social Protection “Implementing these reforms will require the same level of focus and sustained commitment shown by Government and social partners thus far. We encourage ILO constituents in Oman to consider ratifying the ILO flagship Social Security (Minimum Standards) Convention, 1952 (No. 102), as a way to cement the anchoring to internationals social security standards that has been now strongly reflected in the national legislation,” she added.
In recent years, the pension and social protection systems in Oman have faced growing challenges concerning sustainability, adequacy and effectiveness in providing needed protection to citizens and workers. Fragmented schemes have caused gaps in coverage and comprehensiveness, hindered efficiency and discouraged workers’ mobility between economic sectors.
“A new social protection paradigm was required to address these different instances and balance economic and social objectives” said Mohammed Salim Rashid Al Qalhati, who headed team in charge of the pension and social protection reforms project at Tawazun. “Over the past few years, the Government worked intensively with the ILO to give flesh to a vision for social protection in Oman that was both aligned with the Sultanate agenda as well as key international standards and frameworks. We are eager to continue the partnership with the ILO in the upcoming phase of implementation of the new social protection system”
A forthcoming report prepared in collaboration between the Social Protection Fund and the ILO outlines key aspects of the reforms trajectory and highlights its main achievements, which include:
a comprehensive and adequate social protection system that integrates contributory and non-contributory instruments to address lifecycle risks and vulnerabilities in an effective manner, leaving no-one behind;
a sustainable model for social protection financing that integrates resources from social contributions and general revenue to ensure solidarity and fairness, and contributes substantively to poverty, vulnerability and inequality reduction;
an integrated and cost-efficient institutional and organizational framework for social protection benefits administration and management.
Click here for more information and infographics on 7 key features of the reforms:
Lifecycle-based social protection through an integrated multi-tiered approach: overview of key benefits
Complete restructuring of the contributory social insurance system and a new unified pension scheme
More comprehensive protection for workers in all forms of employment
A government-funded universal floor as cornerstone of the new social protection system
Greater opportunities for women, through a gender sensitive social protection approach
Definitive steps towards extending migrant workers’ rights to social protection
A unified legal and administrative framework for the whole social protection system
The ILO has provided extensive technical assistance on policy, legal, governance, actuarial and socioeconomic modelling aspects of the reforms through a team of technical experts coordinated by the Regional Office for Arab States in Beirut and the Social Protection Department in Geneva.
The ILO will continue to support the implementation of the social protection reforms as part of a new Decent Work Country Programme that is currently under preparation. This is expected to include support to the operationalization of the governance, financing and investment model of the new social protection agency, technical assistance for the design and implementation of newly established schemes in light with best international practices and social security standards, capacity building of tripartite partners on social protection administration, and the continued assessment of social protection needs and gaps.
