The Gulf Co-operation Council (GCC) members have been conducting programmes to train nationals and encourage them to join the workforce, but still, the private sector in the region heavily relies on imported labour.

Being faced with the unwillingness or inability of their own people to work in private sector, the government continues to remain the major employer of native workers in the GCC, which includes Bahrain, Oman, Kuwait, Saudi Arabia, Qatar and the UAE.

According to a Saudi Economist, Ihsan Bu Hulaiga, the GCC labour market continues to remain deformed due to its openness to foreign workers, and also because the public sector continues to function as the convenient employer for citizens.

“No where is it done this way, It is not acceptable,” he added, pointing out to the fact that expatriates in the GCC comprise 40 percent of total population, out of 37million, and highlighted that Saudi Arabia had issued a record of 1.7mn new working visas last year.

Traditionally, the public sector in GCC states employs maximum number of nationals, under very relaxing conditions, compared to the private sector. Young people are drawn towards the public sector for the fewer working hours and job security, lamented Bu Hulaiga.

However, as the private sector creates maximum job opportunities, most GCC countries have set a quota system for nationals in private businesses. This policy, too, “contradicts all economic concepts,” says Bu Hulaiga.

The solution is to make the national manpower more appealing to employers, which is currently unqualified and more costly (than expatriates). Bu Hulaiga believes that with the current economic growth, there is a great chance to qualify the young nationals by providing training, and subsidizing salaries by bringing them on par with that in public sector.

Kuwait is already working towards that goal. While the private companies pay their employees with the basic salary, the government chips in with allowances. Since 2003, about 36,000 Kuwaitis have joined private firms, as the government launched a programme that motivates private sector to recruit citizens, and the rate of unemployment dropped from 7.1 percent in 2003 to 5.3 percent in 2007. However, the emirate’s public sector is still the main employer of nationals, absorbing about 79 percent of the active national workforce.

“It is a time bomb. It will not be possible for the government to employ them, as Kuwaitis represent a meager 3.9 percent of the private sector labour force in the country, with nationals being less than one-third out of a population of 3.4million,” agrees Bu Huliga.

Posted on 11/4/2008

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