The demand for low- and semi-skilled migrant workers in the GCC private sector is projected to remain high in the short term, according to a paper released by the International Labour Organization (ILO).
One reason for this high demand is the large number of mega development projects (eg, UAE Expo 2020 and Qatar’s World Cup 2022), as well as the infrastructure and service needs for a growing GCC population, said the report, ‘Labour migration, skills development and the future of work in the Gulf Cooperation Council (GCC) countries’. Many of these labour-intensive jobs cannot be mechanised or nationalised.
In the longer term, there will still be a structural demand for migrant workers in a segmented labour force (ie, certain jobs that there will continue to be a demand for, but that the national population is not inclined to carry out, eg, domestic work, construction, etc).
However, the number and profile of migrant workers are expected to change according to the pace at which employers adopt technology and nationals accept skilled and semi-skilled opportunities in the private sector. The adoption and creation of new technology will also generate more skilled, specialised employment opportunities in the fields of medicine, engineering and environment, among others in the long run.
Between 2000 and 2010, the GCC countries have produced close to 7m jobs. Yet this figure was still insufficient to close the GCC nationals’ unemployment gap, the report said. Youth and total unemployment rates have remained high, particularly among university graduates. In 2016, youth unemployment was 10% in the UAE, 13.5% in Kuwait and 20% in Saudi Arabia. The potential consequences of a large unemployed young population in terms of unrest and dampened economic growth are well understood in the region, the report said.
The current GCC population of 53m is projected to increase by 25% to over 66m by 2030, reflecting both relatively high – although declining – fertility rates. This demographic transition has produced a young and rapidly growing labour force. Across the GCC countries, the median age was 31.4 in 2015, from a low of 29.0 in Oman to a high of 33.4 in Kuwait and the UAE.
The report noted that to date, despite the active promotion of policies to nationalise the labour force in several GCC countries, there remains an embedded preference among nationals for public sector over private sector employment. In Oman, for example, the National Centre for Statistics and Information found that 76% of Omani youths seeking a job preferred one in the government sector, even if the salary in a private sector job was 50% higher compared to the government job.
Recommendations
The economic and demographic trends, as well as technological developments in the GCC suggest that governments need to urgently link their economic visions with labour market policies in order to strengthen recruitment, enhance internal labour market mobility, increase productivity, and more importantly, bolster economic development in the long run, said the report. For example, countries of destination should begin to explore more favourable mobility policies with greater residency rights for migrants to help them to maximise their potential, enable employers to yield greater returns of their skills and experience, and optimise the existing labour market within the country to contribute to the goal of more knowledge-based economies. M