Expat influx to leave 11pc Kuwaitis jobless

Kuwait's Ministry of Social Affairs and Labour has predicted that the unrelenting influx of foreign workers into the country will result in 11 per cent of the Kuwaiti workforce becoming unemployed in 2005.

Economists, on the other hand are saying that the government is creating masked employment for the indigenous population and therefore weakening the competitiveness of the Kuwaiti labour force in the private sector.

In its Manpower and Employment report until the end of 2003, the ministry has called on the private sector to rationalise the recruitment of foreign manpower and limit the influx to strictly skilled labour. It has also said that the country desperately needs to reduce its dependence on unskilled or marginal labour whose current numbers surpass the figures of previous years.

The ministry has also announced that it has worked out a plan to control the growth of expatriate manpower, the chief point being raising the cost of recruitment. The ministry proposes an imposition of recruitment charges and that private firms should begin paying the full price for otherwise heavily subsidised state services.

It has further called for stringent controls on the recruitment of domestic labour that currently number 435,000 and represent almost half the Kuwaiti population of about 950,000. It is also recommended that unskilled labour should be allowed to stay in the country for a maximum of 10 years.

Unemployment figures among Kuwaitis began to rise in 2001 when it was at 4.7 per cent and has consistently climbed in consecutive years to 6 per cent, 7 per cent and 9 per cent respectively.

The overwhelming majority of Kuwaiti unemployed are women, the report shows. Eighty-eight per cent or 18,754 females are jobless compared with 12 per cent or 2,459 males.

In 2003, national manpower was 16 per cent of the total workforce of 1.7 million people (including domestic workers). 70 per cent of this workforce was with the public sector with less than two per cent in the private sector.

Expatriates on the other hand grew by 7 per cent between 1995 1999, and 30 per cent from 1999 2003. In 2003, it grew by 16 per cent over 2002 figures.

Economists however criticised the handling of the Kuwaiti workforce by saying that many of the figures included on national manpower are masked. The government employs many more than it actually needs and coupled with high salaries and cost of living and other allowances makes it very attractive for most Kuwaitis to aspire to a public sector job without making an effort to actually compete in the private sector.

In addition, the imposition of Kuwaiti workforce quotas on the private sector, the proposed plans on hiking the cost of recruitment and the limiting of foreign labour will crush the private sector instead of allowing it to grow.

"All this talk of taking off on privatisation and then creating hurdles for political purposes is very confusing", one economist said. Economists, however, focussed their harshest criticism for revived calls by many lawmakers to increase Kuwaiti salaries and allowances despite their high levels. "Any increase will make the Kuwaiti economy uncompetitive, unable to create job opportunities and destabilise the country as a whole", the same economist said. "This is dangerous because any hike in salaries and allowances will come from funds generated by selling an exhaustible asset to transfer to current expenditure. Kuwaiti workforce will thus continue to concentrate on the public sector thus continuing the vicious cycle of masked unemployment, bad management and bad services. Further this will increase fixed expenditure and will greatly reduce flexible control of public expenses when oil prices decline", he added.

The writer is a Kuwait-based journalist