Is gulf an ideal place for the expatriates in terms of job security? Difficult question to answer indeed. Since my childhood I have been interacting with NRIs from the Gulf jobs and possible unforeseen terminations at any time. Some of them have now become grandfathers, still working in the Gulf and living with their children and grandchildren. They still see Gulf as a safe haven for themselves and their siblings though a sense of insecurity still persists.
Now again, the discussion on the insecurity of Gulf jobs has heated up in the wake of the announcement of reforms in Saudi Arabia, the leader among Gulf countries in terms of the job market for expatriates. These reforms include limiting the stay of unskilled expatriates to six years and the implementation of Nitaqat (limits), which reserves certain percentage of jobs to the nationals, blocking the file of non-compliant companies and not granting new visas to such companies.
The government has also announced many incentives to the compliant companies. It is said that there are three million so-called unskilled workers in Saudi Arabia alone among the total 10 million unskilled workers throughout the Gulf nations. This suggestion was initially proposed in the Gulf Cooperation Council (GCC) Summit in 1998 by Bahrain, the smallest Gulf country with very limited oil resources at its disposal. Since Saudi Arabia has formally announced the implementation of these reforms with effect from June 2011, expatriates of other GCC countries, consisting of United Arab Emirates, Oman, Qatar and Kuwait, fear that similar reforms could be implemented everywhere eventually. Adding to this fear, Kuwait, another tiny oil-rich country has proposed the implementation of such regulation.
There is a lot of speculation going on about the new regulation and it is not clear how it will be implemented. However the Saudi labour ministry has issued clarification saying, “Nitaqat will be an effective tool to eliminate malpractices in the labour market. We are not completely stopping visas for foreign workers but we want to find jobs for our people. Companies in the green zone will not have any problem while there is a plan to limit the stay of most expatriate labour to six years.”
The current interest shown by the Gulf countries to introduce employment reforms and generating more jobs for the locals, seems to be driven more by the wave of reforms spreading throughout the Arab countries than by the fear of expatriates outnumbering the locals. Due to various factors like competitive pay, higher reliability and competency, many companies in the Gulf prefer their jobs to be filled by expatriates.
This has enhanced unemployment and dissatisfaction among the local population, particularly in countries with high native population and higher rate of unemployment. Moreover, as per the recent demographic statistics, the average age of the local population in the Gulf is ‘26’ which implies that there is a large number of youth in the region who are aspiring for jobs. Education rate is also growing among the Gulf population, including females. The trend of women working in every sector is also growing in all the Gulf countries including Saudi Arabia, which is more conservative in terms of dress code for women, and other regulations such as driving, which is restricted to men.
According to Saudi Arabian economist Khaled Al Sulaiman, there are 18 million expatriates in the six GCC nations, remitting home tens of billions of dollars every year, which is tantamount to gradual drainage of wealth of the Gulf countries. This is said to be another reason for limiting the dependency on expatriates. Roughly, expatriates account for around 80 per cent of the population of Qatar and UAE, while Oman has about 25 per cent, the lowest number of expats compared to other states. Kuwait, Bahrain and Saudi Arabia have approximately 60 per cent, 40 per cent and 35 per cent of expatriate population respectively. In the countries where expatriates are in large numbers, locals are more concentrated in the well-paying jobs as can be seen in Kuwait, Qatar and UAE. Locals in these countries never prefer to go for lower grade jobs and most of them are well placed. Accordingly in Oman and Saudi Arabia there is a large number of locals working in lower grade jobs such as drivers, labourers, etc.
Meanwhile, it’s also true that the Gulf economy is too dependent on foreign workforce. Real-estate, rental properties, malls, supermarkets, service sectors, banks, schools and manufacturing units etc. operate based on the existing population which has considerable expatriate share. Any change in the demography has to be gradual and sustainable; otherwise it would hamper buying power, consumer confidence, business and economy in general.
Moreover, there are many new projects and expansion activities in progress in many Gulf nations, which needs expatriate workers for at least another 50 years. If a six-years cap is applied for aspiring immigrants, a Gulf career would become less attractive as Asian economy in general is in a better shape now and countries like India and China are driving the global economies. If experienced staff from various companies is reduced based on the six-years cap on ‘unskilled’ workers, productivity of companies may drastically go down since experience and expertise are the key drivers of productivity.
Oil boom, particularly after 1970, has created a new wave of Gulf careers, which has further increased during the recent past with the rise in oil prices and booming Gulf economies. Furthermore, India, China and Brazil are forcing their way up whereas western powers are losing ground. The reforms in the Gulf may bring eventually further economic growth in North Africa and the Middle East. Dependency on oil and gas and appetite for consumption is continuously growing around the globe. Inter-dependency of countries is growing more than ever. Owing to all these factors it seems that dependency of Gulf countries on foreign workforce may not fade away in the near future and swift reduction of expatriate population is unthinkable.
Comments
Add new comment