Will nationals and Asians replace Arab workers in the GCC?
The paper notes that the combination of marginal growth, more national entrants, open unemployment, chronic government budget deficits and ‘unfair’ competitive environments between nationals and expatriates in the private labor market will inevitably result in the lay off of expatriate workers to make room for nationals. In view of these trends, the paper asks which group is likely to be hit harder: Asians or Arabs?
Given that Arabs and nationals are more congruent than nationals and Asians, the paper suggests that Arabs will be the group most affected by lay-offs. High and medium-skilled workers, not low-skilled workers will be most affected.
The paper estimates that during the next five years, GCC economies must accommodate 1.7 million nationals (new entrants and current unemployment). Growth and attritions will generate only 845,300 jobs. The remaining balance will have to be filled by replacements of migrants. According to the paper, 5,400 Arabs will be replaced versus 361,900 Asians.
The paper concludes that neighboring Arab countries will face anticipate fewer remittances, more workers returning home and perhaps increasing unemployment rates, unless major strides are made to:
- invigorate economic growth
- introduce major macroeconomic and labor market reforms
- enhance labor productivity through upgrading national manpower and eliminating the distortions caused by government employment policies
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