Tuesday, April 08, 2008

Unemployment amongst Gulf nationals persists

Khaleej Times ran this AFP report:
Governments in the oil-rich Gulf Arab states have so far failed to tackle unemployment among their own citizens despite impressive economic growth fed by record oil revenues. Despite most Gulf Cooperation Council (GCC) members having programmes to train their nationals to join the workforce, the region’s private sector still relies on imported labour.

Faced with an inability — or unwillingness — among their own people to work in the private sector, governments remain the main employer of native workers in the GCC, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Saudi economist Ihsan Bu Hulaiga believes that the GCC labour market has been deformed because of its openness to foreign workers and because the public sector functions as a convenient employer for citizens.
despite its wealth, unemployment among Saudis themselves was 11 percent in 2007, according to official figures, just one percent down from the previous year.

Traditionally, the public sector in GCC states has employed as many nationals as possible under conditions considered very relaxed compared with the private sector.

“The public sector attracts young people for its job security and fewer working hours,” Bu Hulaiga lamented.

But because the private sector generates greater job opportunities, most GCC countries have quota systems for nationals in private business.

This policy “contradicts all economic concepts,” said Bu Hulaiga.

The solution is to make “national manpower, which is unqualified and more costly (than foreigners), more appealing to employers,” he said.

“We have a great chance to qualify our young people amid the current economic growth.”

Bu Hulaiga believes GCC governments should make the private sector more attractive to Gulf nationals by providing training and subsidising salaries so they are on par with those of the public sector.

Kuwait already does so. Private companies pay their employees the set basic salary and the government chips in with allowances.
Half of the employees in the public sector represent what Kuwaiti economist Jassem Saadun called "masked unemployment."

Paying to create such posts "is a way to distribute oil dividends," he told a seminar last month, but warned that such a policy will not work in the long term.
Bahrain and Oman are less well-off as their oil reserves are dwindling.

Unemployment in Bahrain dropped dramatically to around four percent in 2007 according to official figures, after it was reported to have soared to 15 percent of a 120,000-strong workforce in 2005.

Bahrain also established a programme to aid job seekers, with a governmental body trying to place them in the most suitable posts.
Because it comparatively poorer, Bahrain has had to adopt a sounder approach. For more, check out the links here.

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Anonymous Anonymous said...

It's the same record that's been playing over and over again since the seventies.

4:55 PM  

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