One of the most underestimated contributors to the domestic GDP of several Arab countries is migrant workers, also called expatriate workers. Arab governments should pay close attention to this strategic source of foreign capital. There were an estimated 169 million international migrant workers in the world, according to the International Labour Organisation (ILO) in 2019, constituting 4.9 per cent of the global labour force in the destination countries.
According to one study by Mckinsey Global Institute, migrants contributed roughly $6.7 trillion, or 9.4 per cent, to global GDP in 2015 — some $3 trillion more than they would have produced in their countries.
While Arab countries like Jordan, Egypt, Syria, Lebanon, Morocco and Tunisia export migrant workers mainly to the GCC and EU countries, they also host migrant workers, making them mixed migration countries. According to the Wilson Centre, migrants account for an average of 70 per cent of the employed population in the GCC and over 95 per cent of private sector workers in some Gulf nations. This includes migrant workers from Arab countries, the EU, the US, and Asia filling semi-skilled and highly skilled labour positions.
According to data from the UN Department of Economic and Social Affairs, there were 36 million international migrants across GCC countries, Jordan, and Lebanon in 2020. Other studies suggest that around 12.5 million foreigners are in the GCC, representing just under 40 per cent of the total population.
How Arab migrants support home economies
A closer look at how Arab migrant workers contribute to their countries’ GDP underlines the growing importance of this sector in supporting domestic economies. Recent figures put Egyptian expatriates at between 12 to 14 million. In the financial year 2021-22, remittances from Egyptian expatriates touched $31.9 billion, a slight increase from $31.4 billion the previous fiscal year, according to data released by the Central Bank of Egypt. That is nearly 90 per cent of the country’s net international reserves, while these remittances contribute 6.7 per cent of the country’s total GDP.
Jordan is another example of how expatriate workers are becoming key contributors to foreign currency and a backbone of the kingdom’s GDP. The Jordanian economy is increasingly dependent on remittances from its labour force, mainly in the GCC, contributing an average of 10 per cent to the GDP annually. The latest added value to the GDP from 2021 is 11.29 per cent. For comparison, the world average in 2021 based on 122 countries is 5.80 per cent only. Jordan Central Bank said that expatriates’ remittances increased by 1.5 per cent in 2022 compared with the previous year, reaching a total of $3.452 billion.
To prevent brain drain, Arab countries should focus on creating an environment to lure foreign investments so that skilled labour can find jobs at home.
According to recent figures, approximately 786,000 Jordanians are expatriates or about 10.5 per cent of the population. One-third of them live in Saudi Arabia, followed by the UAE, the US, Kuwait and Qatar.
Countries like Jordan, Egypt and Lebanon traditionally provided skilled labour to host countries, especially in education, health, middle management, banking and communication sectors. It is important to note that these labour-exporting countries have high rates of unemployment that their local economies have not been able to deal with.
While employment in GCC countries has been changing in the past few years with employment strategies aimed at replacing expatriates with national employees, new job markets are slowly opening elsewhere.
Germany seeks skilled labour from Levant
Most EU countries have historically received migrant workers from former colonies, especially North Africa, Central Africa and Western Asia. Now some countries are also opening up to highly skilled labour from the Levant.
For example, Germany is facing a growing shortage of skilled workers. In 2022, the country’s labour shortage rose to an all-time high: the Institute for Employment Research (IAB) found 1.74 million vacant positions throughout Germany. In 2023 Germany’s economy was looking for skilled labour to fill positions in computer science/IT and software development, electronics engineering, mechanical engineering, account management and business analytics, nursing and healthcare, civil engineering, and architecture.
While Germany has the lowest barriers to high-skilled immigrant workers among the OECD, the number of workers from outside the EU and the European Free Trade Area (EFTA) is 25,000 a year, or around 0.02 per cent of the population. Now Germany is encouraging applicants from Arab countries like Jordan, Egypt, Lebanon and Iraq to apply for jobs in critical sectors.
Jordan has a 40 per cent unemployment rate among engineers. German companies are investing in programmes in Jordan to prepare engineers to work in Germany. Jordanian nurses too are finding employment in Germany. Since Jordan is a mixed migration economy, many jobs vacated by Jordanians are being filled by Syrians and other nationalities.
Arab governments, especially those with high unemployment figures, especially among skilled labour, should give special attention to expatriate workers, who are key contributors to the local economy. The dynamics of the labour movement are shifting, and governments should adapt their strategies accordingly.
One downside is brain drain. To prevent that, governments should focus on creating an environment to lure foreign investments so that skilled labour can find jobs at home.
— Osama Al Sharif is a journalist and political commentator based in Amman.