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Meeting the Employment Challenge in the GCC

 

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The Need for a Holistic Strategy

Unemployment is one of the biggest challenges in the Gulf Cooperation Council (GCC)* region: It has the potential to depress per capita standards of GDP, jeopardize standards of living, and breed economic inequality. Although some of these consequences have been avoided due to the GCC’s provision of welfare for its citizens and, in recent years, by high oil revenues, these are sources of income that will likely prove unsustainable at current levels. GCC policymakers would like nothing better than to shift more of their workforces away from government jobs and into fast-growing new industries outside of oil, but they have had a hard time doing so; despite recent efforts at diversification, few non-energy businesses are really thriving in the GCC.

And it is not only unemployment that is a problem. Underemployment (overstaffing or mismatching of skills) is an issue, the result of governments being the primary employer of citizens who often do not have the qualifications to be competitive in the private sector; because of guarantees of public employment, the region’s workers are not motivated to seek such qualifications or develop critical skills. It is no wonder that expatriates constitute so large a part of the GCC’s private-sector workforce—significantly, in some important technical fields.

The root causes of the GCC’s employment problems are many: a system of education that is not competitive in the sciences and not well aligned with the needs of modern industry; a culture of citizens conditioned to expect that government will always take care of them; and often-ineffective policies in areas such as immigration and retirement. The region must effect changes in the culture, in the government, and in private industry if its problems of unemployment are to be reversed.

Key Highlights

  • Although expatriate workers can be a boon to a region, bringing much-needed labor and talent, in the GCC the prevalence of foreign workers is a symptom of the region’s limited success in developing critical skills internally and instilling a strong work ethic among its citizens.
  • Education failings are the cause of a lot of the GCC’s employment problems. Vocational training, science curricula, and alignment with industry all need to be improved.
  • Too many of the GCC’s nationals are employed by their governments. The private sector needs to play a bigger role in job creation.
  • Few governmental policies in the GCC have proven effective in managing employment issues. These policies need to be reassessed, and many of them need to be changed.

*The Gulf Cooperation Council region comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

 

Article Index

  • Executive Summary
  • Deconstructing the Problem
  • The state of employment in the GCC
  • Exhibit 1 - Young People in the GCC Show Higher Rates of Unemployment than the Average
  • Exhibit 2 - The Unemployed in the GCC Have Low Levels of Education
  • Exhibit 3 - Women in GCC Countries Show Higher Rates of Unemployment than Their Male Counterparts
  • Unemployment in the GCC: Three Contributing Factors
  • Exhibit 4 - Low Labor Productivity Is a Symptom of Unemployment
  • Exhibit 5 - GCC Countries Lose Money through Foreign Laborers’ Remittances
  • GCC Countries’ Employment Policies Have Largely Been Ineffective
  • Education Policy: Not Aligned With Economic Goals
  • Exhibit 6 - GCC Countries Show Low Enrollment in Vocational Programs
  • Vocational Education: Lessons from Singapore
  • How Singapore Has Linked Socioeconomic and Education Strategies
  • Labor and Immigration Policies: In Need of Reform
  • Case Studies: The Need for Holistic Development Strategies
  • Social Welfare Policy: In Need of Revamping
  • Imperatives for Developing the GCC Workforce
  • Conclusion

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Author Profiles

Richard Shediac is a partner with Booz & Company based in Abu Dhabi. He specializes in financial-services and public-sector projects and has led and participated in various strategy, operations improvement, and organization projects in the Middle East, Europe, and Asia.

Hatem Samman is the director of the Booz & Company Ideation Center. He is based in Dubai. As a lead economist, he has written extensively on policy issues across diverse economic sectors.

 

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