LABOUR-GULF: Arab States Phase-Out Migrant Workers

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Aug 6 1998 (IPS) - The threat of rising unemployment at home is forcing some of the rich Middle Eastern nations to phase out migrant workers from the Third World, according to a new U.N. report released here.

Saudi Arabia, Kuwait, Bahrain, Oman and the United Arab Emirates (UAE) – all members of the Gulf Cooperation Council (GCC) – either have restricted, or plan to restrict, the employment of foreign workers, mostly from Asian countries.

In a 17-page report – described as a survey of economic and social developments in the Middle East – the United Nations says that some of the oil producing nations in the Gulf are also trying to penalise local companies that violate new labour laws restricting migrant workers.

Currently, expatriate labour accounts for about 61 percent of the total work force in Oman, 83 percent in Kuwait and 91 percent in the UAE. In contrast, the indigenous labour force in most GCC countries is growing at an annual rate of about 5.0 percent. “GCC countries have instituted indigenization policies with the aim of replacing foreign workers with their own nationals,” the report says.

The study also points out that unemployment in the Gulf appears inconsistent with the practice of providing employment opportunities for millions of expatriate workers who account for most of the labour force in the region.

“But the unemployment problem remained a formidable challenge in 1997 for many of the countries in the region, in particular those with more diversified economies,” the report says.

According to the study, the unemployment problem has been compounded over the years by the region’s relatively high population growth and low economic growth rates, and by overstaffing in the public sector. Last week, the International Confederation of Free Trade Unions (ICFTU), which estimates legal migrant workers at 42 million worldwide, described migrant workers as “modern day slaves” because of poor wages and harsh working environment in some of these countries.

Sri Lanka alone has “exported” about 500,000 women who work as house maids in the Middle East while the Philippines “exports 12 women for every man,” according to the Brussels-based ICFTU.

Even as these countries depend heavily on expatriate earnings, Gulf nations are phasing out migrant workers threatening to cause economic problems in labour exporting countries. Between 1990- 1995, total outflow of workers’ remittances from Saudi Arabia alone was about 100.3 billion dollars averaging about 16.7 billion dollars annually.

Among the major beneficiaries were the Philippines, Egypt, Bangladesh, India, Pakistan, Sri Lanka and Jordan– countries providing millions of skilled and unskilled workers to Saudi Arabia, Kuwait, Bahrain, the UAE, Oman and Qatar.

In some countries such as India, Morocco, Pakistan, Tunisia, Turkey and Yemen, annual remittances outweigh official development assistance (ODA) by a third or more, according to the last annual Human Development Report of the U.N. Development Programme (UNDP).

On an average, Turkey has been receiving about three billion dollars annually in workers’ remittances compared with 1.5 billion dollars in ODA. In India, the figures are about 2.5 billion dollars and 1.8 billion dollars respectively.

The new U.N. survey says one of the main objectives of Saudi Arabia’s current five-year economic plan is the “Saudi-ization” of the country’s labour force.

The government plans to provide soft loans and contracts only to those private companies meeting the country’s labour targets for hiring Saudis. Companies must increase the number of Saudi workers they employ by five percent a year or face sanctions.

In October 1996, Saudi Arabia declared 13 professional categories closed to foreigners. In 1997, seven more categories were added to the list. In 1996, the UAE expelled more than 180,000 expatriate workers whose papers were “not in order”, and has since toughened legislation on immigration.

The survey says that other GCC countries, including Bahrain and Saudi Arabia, pursued similar policies in 1997. Additionally, Bahrain and Oman have “indigenized” their respective labour forces but this has been confined primarily to the public sector. In the private sector, the process has so far involved only certain managerial and clerical jobs, according to the study.

The survey also points out that the government of Kuwait is considering plans to make the employment of foreign workers a less attractive prospect by obliging private firms to provide health care and by raising residence and entry fees.

As of January 1998, the UAE has promulgated a federal law compelling private companies to fill vacant posts with nationals. The government also plans to prevent private companies from hiring expatriates for any posts that could be filled by qualified nationals.

“It is not yet clear whether private firms will be required to pay higher salaries to nationals, but the government is considering providing incentives – including priority in awarding government contracts – to companies employing more nationals,” the study said.

Beginning last year, the government of Saudi Arabia has increased its budget allocation for education and training of local employees: to 11.1 billion dollars, an increase of more than 40 percent over the 1996 allocation of 7.4 billion dollars.

“Such investment should allow the indigenous population to acquire the education and technical skills it needs to meet labour market requirements in the 21st century,” the survey noted.