Population rise to test Gulf states

Dubai: The population of the six Arab Gulf countries is expected to increase by one-third of its current levels to touch 53 million people in 2020, with more than half of them expected to be under the age of 25 years, according to a recently released report.

The report, which is compiled by the Economist Intelligence Unit (EIU), added that the fast-growing young population could make a noticeable contribution to the countries' economic growth.

But at the same time, it will present other "key challenges" to the oil-rich nations, including creating job opportunities for the younger generations and addressing labour market issues to increase the percentage of nationals in the private sectors of these countries significantly.

"The rapid growth and the relative youth of the population present serious challenges as well as major opportunities," Jane Kinninmont, author of the report and the Country Reports Manager at the EIU said.

EIU is a leading research and advisory firm in the world and one of the Economist group of businesses.

While the Arab Gulf countries are going to be among the world's "young regions" — only Africa is expected to have a younger demographic profile than the Middle East by 2020 — Kinninmont said the percentage of the GCC population that is under 15 will drop from 29 per cent in 2008 to 24 per cent in 12 years.

Apart from finding jobs for the young generation, "GCC governments are spending more and more on education but will also need to address other labour market issues if the proportion of nationals employed in the private sector is really to increase significantly — we are still a long way from a level playing field," Kinninmont, who is also an Editor at the Economist for the Middle East, added.

Also, there is a great need to encourage and support young entrepreneurs to help diversify the economy and create jobs, she added.

Furthermore, "the rising population also means that the cost of providing government health care, education, subsidised power and water and, in some cases, subsidised food will continue to rise. Depending on what happens to oil prices, some of the Gulf governments may need to cut back on some of these costs, or else begin introducing taxes," according to Kinninmont

Both options will be "politically difficult", while "today's young generations in the Gulf have grown up at a time of dramatic economic growth and social change, and they have very high expectations for the future," she said.

Women

The EIU's report concluded that the number of women in the labour force is expected to continue to rise in the coming years.

"Women already outnumber men in many Gulf universities. Businesses are going to face pressure to adapt to the working environment to accommodate childcare needs, but will not necessarily use the same models seen in the West," Kinninmont said.

The GCC bloc includes Saudi Arabia, the most populous Gulf State with a population of nearly 25 million, as well as UAE, Kuwait, Qatar, Oman and Bahrain, the least populous with nearly 1 million residents.

Arab Gulf emerging economies have attracted large numbers of expatriates. The trend is expected to continue until 2020. Non-nationals make up nearly 37 per cent of the Arab Gulf population.

While in some countries, expatriates constitute the majority, nationals constitute the majority of the population overall, experts say.

In figures