Business | Features
People will work for better pay
Experts say rising unemployment among Gulf nationals is not because of the types of jobs available
- By Jumana Al Tamimi, Associate Editor
- Published: 00:00 July 25, 2011
- Image Credit: Gulf News Archive
- Contrary to the general perception that many GCC nationals reject "demeaning" jobs, the issue is related more to the wages on offer rather than the type of employment.
As GCC governments face growing pressure from unemployed nationals over the hiring of large numbers of foreigners, economists have warned it is not acceptable for wealthy economies boasting absolute growth to be running high unemployment rates.
Contrary to the general perception that many GCC nationals reject "demeaning" jobs, the issue is related more to the wages on offer rather than the type of employment, said economist Ihsan Bu Hulaiga from Saudi Arabia, where the unemployment rate has reached 10 per cent.
"We conducted a survey ... based on interviews throughout the Kingdom of Saudi Arabia, in about 40 different urban centres," Bu Hulaiga said.
"The key question was will you accept a ‘demeaning' job? The response was ‘for the right wage, yes'."
The situation is similar in other GCC countries, he added.
A few decades back, Bu Hulaiga recalled, many Saudi cities had no expatriate workers.
"The cleaner was a Saudi, the construction worker was a Saudi, the person who would prepare sandwiches and sell them was a Saudi," he said.
"Gradually, with the expansion of the economy, the dependence on foreign labour started to appear. It was a temporary dependence, but became permanent and then structural."
Bu Hulaiga was forthright in his explanation of why unemployment was rising among Saudi nationals.
"We don't hire our kids because we don't want to pay the right wage for them," he said. "That is the only reason."
At best, he believes, only a quarter of the whole expat-worker population in the GCC is skilled labour, while the rest is unskilled or semi-skilled.
Other economists echoed his view and strongly believe the GCC countries need to review their labour policies and strategies.
Unsuitability
Unlike the situation in other Arab countries, where governments face the problem of a shortage of employment opportunities, the Gulf doesn't suffer from a lack of jobs. The problem is the unsuitability of the jobs available for a large portion of the local population.
Ensuring the population has appropriate skills to do the jobs available seems a necessary condition to reduce unemployment among nationals in the GCC, according to Farouk Soussa, chief economist at Citibank.
"In our view, what is required is a comprehensive overhaul of labour policies that would raise the standard of pay and working conditions for all workers, create a competitive and flexible private sector labour market, reduce the disincentives for employers to hire locals by raising the cost of foreign labour, and reduce the inherent advantages of working in the public sector vis-a-vis the private sector," Soussa wrote in his survey.
While Soussa noted that there are still many GCC nationals who wouldn't consider doing a manual job or servitude to others, he added that in many instances, a job may be suitable in principle, but salaries and conditions are not.
Competition
"This is because GCC nationals have to compete with foreign nationals, who often accept much lower salaries than their local counterparts," Soussa wrote.
While the majority of nationals prefer public sector jobs, which offer them better pay and more security, the private sector prefers foreigners.
Apart from raising pay and improving working conditions, economists believe there are other measures which attract nationals to private sector, including the relaxation of the sponsorship system and offering foreigners the flexibility to switch jobs.
"This would benefit foreign employees originally, but as salaries and standards rise, the effect would be to entice greater numbers of locals to the job market," Soussa wrote.
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