Labour reforms in the Gulf countries are shifting the region’s reliance on expat workers back to employing locals.
Saudi Arabia, the region’s largest economy and biggest population, has created 600,000 new jobs for locals with private companies in the past 12 months.
The government is planning an even bigger expansion of the internal job market next year and beyond as the jobless rate dropped to just over 6% in 2012 – the lowest for more than a decade.
Deputy Labour Minister Mofraj al-Haqbani said: “This is the lowest figure for 13 years and next year we expect to see even more locals with jobs.”
As the number of people without jobs falls, the Saudi economy has grown by 6.8%, helped by higher oil prices.
Jobs challenge
A challenge for the government is integrating women in to the economy. Traditionally, religious laws have not permitted men and women to mix in the workplace.
Saudi Arabia is curbing the number of expats with a cap on how many foreigners companies can employ. If they break their quota, they are fined.
Other Gulf countries are also striving to cut links with expat workers that have underpinned their economies.
Two main reasons are leading to the change of thinking –
- As Gulf countries’ economies have improved, more young people have gained university degrees but cannot find a job in their home country
- The Arab Spring tide is worrying governments because they can see a hotbed of unemployed, intelligent young people rebelling against government policies
In Kuwait, the government has announced a grand plan to decrease the number of working expats by 100,000 a year to just 1 million by 2023.
Expats account for around 60% of the country’s population.
Unfriendly Kuwait
The move provoked uncertainty in the Kuwait for expats, who do not know if their visas will be renewed or if the government will issue new visas from April 1.
Minister of Social Affairs and Labour Thekra Al-Rasheedi said: “We want to manage the labour market, stamp out marginal labour and rebalance the demographic equilibrium of Kuwait.”
The ruling means private companies can only hire Kuwaitis – which creates a problem as the latest census suggests the country only has 1 million people of working age.
Kuwait is also considering other proposals aimed at expats, like pulling the plug on utility subsidies and limiting healthcare. If the proposals go forward, monthly bills for expats would cost more than an average salary.
Meanwhile, a tourist study by the World Economic Forum ranked Kuwait one of the most unfriendly countries in the world – the poll listed Kuwait at 137 of 140 nations.
