Growing expatriate numbers undermine nationalization in GCC

Latest report on migrant workers by the International Labour Organization (ILO) show that despite fervent attempts by the six-nation Gulf Cooperation Council (GCC) states to rectify their demographic imbalances, expatriate workforce in the region jumped by 5.2 percent from 2013 to 2017.

Currently, expatriates constitute 52 percent of the total population in the GCC, which brings together Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. This population imbalance ranges from a low of 37 percent in Saudi Arabia to a high of 88 percent of the total population in Qatar and the UAE.

The demographic structure of the region is significantly skewed and the proportion of expatriates in the workforce, estimated at over 40 percent, is far higher than in other regions that have large presence of migrant workers. For instance, migrant workers in North America account for only 20.6 percent of the workforce, while in Europe it is 17.8 percent.

In cities like Dubai in the UAE or Doha in Qatar, it has been shown that foreign workers constitute nearly 90 percent of the workforce. Even if we account for the fact that the large influx of workers in recent years is on account of specific mega events, such as World Expo 2020 in Dubai or the FIFA World Cup 2022 in Qatar, the workforce anomaly remains a cause for concern.

The demand for manual workers in the construction and industry sector in the GCC is further compounded by the need for domestic household workers. Domestic helpers, including maids, cooks, drivers, gardeners and others, as well as a growing number of care-givers for the elderly, as the population in the region ages, ensures that the GCC will continue to host a large number of expatriates for the conceivable future.

Attempts by governments in the region to boost the number of citizens in the white-collar workforce by replacing expatiates in public sector jobs is unlikely to dent the demand for workers by the private sector. Nationalization drives intended to replace foreigners in private sector with nationals have so far not had any significant success.

Recently, the UAE launched its so-called Citizen Redistribution Policy to temporarily shift civil servants into private sector jobs. It also rolled out training schemes for Emiratis and online recruitment tools. Several months ago, Riyadh has also introduced rules requiring shops to have Saudis in at least 70 percent of sales jobs. But the take-up for these programs have been less than successful.

Despite the prevalence of job quotas for citizens in private sector, most businesses prefer to hire expatriates as they are far less demanding when it comes salaries and other perks. Private companies cannot compete with government in providing the job security or salary packages that citizens have come to expect as their entitlement. Moreover, citizens are also reluctant to take up jobs in the private sector and would rather wait idly for job opportunities to open up in government ministries than join the private sector.

Construction is one sector that hires the majority of blue-collar foreign workers and they cannot be replaced any time in the near future by citizens. Also, even at the higher technical level of engineering and supervising, the skill sets required by the employer are often found lacking in young citizens.

In some private sector domains that have a strong presence of government influence, such as the banking and financial sectors, the percentage of citizens to foreigners have grown in recent years. However, even in professional banking position, banks would rather pay fines for not meeting the employment quota, than hire a citizen who does not have the requisite experience or qualification.