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Redesigning social protection

The law will lead to modernisation and redesign of the social protection system in Oman

The Sultanate of Oman has made tremendous headway in the recent years in transforming the country into a modern state with a wave of economic and social reforms in order to improve the status and standard of living of the people in the country.

National legislations, laws, regulations, strategies and programmes have been harmonised in line with the spirit of international conventions that the Sultanate of Oman has signed and ratified.

The new draft social protection law, which was referred to the Council of Oman, like other reforms, has received global applause with the International Labour Organisation (ILO) terming it “ground-breaking” as it would “pave the way for a new social protection model in Gulf Cooperation Council countries”.

According to the global body, the new draft law reflects an ambitious set of reforms which will lead to the modernisation and redesign of the social protection system in Oman. The ILO has closely supported the preparation of these reforms over several years.

"We congratulate our partners and constituents in Oman for achieving this important milestone” said Ruba Jaradat, Regional Director for the ILO in the Arab, said in a statement.

The law reflects an ambitious set of reforms which will lead to the modernisation and redesign of the social protection system architecture in Oman. This will include the establishment of a unified pension system for workers across all economic sectors, the enhancement of social insurance benefits during working life, and the establishment of life-cycle guarantees for the most vulnerable segments of society.

Based on Royal Decree No 33/2021, the new integrated social protection system as envisaged in the draft law has two parts – retirement systems that must be applied to all employees in the public and private sectors, and the social protection part, which deals with the benefits provided to different segments of the society.

The draft social protection law went through several stages, in which the opinion of a number of specialists, stakeholders, and international houses of experts was sought, in addition to involving specialised local expertise, to design a social protection system that will keep pace with best practices and international standards.

Jaradat said that the development of inclusive, comprehensive, equitable and sustainable social protection systems is critical for countries in the GCC to harness and facilitate ongoing social and economic transformations.

“A new social protection paradigm must be at the centre of a social contract that delivers decent work and social justice for all. Oman is showing that ambitious reform is possible, and must be rooted in international labour standards, careful analysis and extensive social dialogue", he said

The new proposed pension system balances the different objectives of enhancing intergenerational equity, increasing financial sustainability, improving adequacy of benefits and extending coverage, especially among the most vulnerable workers.

The reform also provides for the extension of short-term contributory benefits in case of employment injury, maternity, paternity, unemployment and sickness benefits, and puts particular emphasis on ensuring the participation of workers in all forms of employment in the contributory system, including with an important focus on the extension of social security rights to migrant workers in Oman.

"This has been one of the most complex and exciting projects I have been engaged in during my career” said André Picard, chief of the Actuarial Services Unit of the ILO in Geneva.

According to him, the design of social security systems needs to constantly adapt to evolving demographic, economic and societal changes.

“The design solutions identified together with our Omani counterparts are both innovative as well as being firmly oriented by the core principles expressed in ILO social security standards", he said.

A universal floor of social protection within a fully integrated social protection system

In strong alignment with the spirit of the ILO Social Protection Floors Recommendation, 2012 (No 202), the reforms also establish universal life-cycle benefits for older persons, persons with disabilities and children. These have been designed to be fully complementary with contributory social insurance benefits and will operate under a unified social protection system and administration.

Ongoing transformations in the world of work and the Covid-19 crisis have shed light on the importance of combining financing streams from general revenue and social contributions to fill social protection coverage, adequacy and sustainability gaps.

Over the last three years the ILO has provided technical assistance on policy, legal, governance, actuarial and socio-economic modelling aspects of the reforms through a team of 10 specialised experts, coordinated by the Regional Office for Arab States in Beirut and the Social Protection Department in Geneva.

The preparation of a draft national social protection policy, currently under review by national authorities, was also supported in partnership with Unicef.

Technical advice was directed to the Oman reform cell (Tawazun) and included support to workers’ and employers’ organisations to engage with different aspects of the reforms. This builds on previous collaboration with the Public Authority for Social Insurance which included the establishment of an unemployment insurance scheme for private sector workers.

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