Out of work In the Gulf (page 1 of 3)

By Shilpa Mathai, MUSCAT
Sitting in a Dubai café, 35-year-old Adel Hassan despondently nurses his tea. It's been a long day and his chances of landing a job seem as remote as ever. "I lost my job in a contracting company two years ago. I never thought I'd be unemployed, but now I am beginning to lose hope of ever finding another job," says the Gulf national. "When we were young, we thought we'd have a job, that our government would ensure that. Not anymore."

Hassan's story is not uncommon: unemployment is on the rise all over the Arab world. According to Ibrahim Queidar, the head of the Arab Labor Organization, nearly 14 million people - or 15 percent of the 90 million Arab workforce - are unemployed. By 2010, the total Gulf Cooperation Council (GCC) population is estimated to reach 39.4 million from 25 million in 1995. There will be another 8 million job seekers in 15 years time - 533,000 jobs will be have to be created annually to meet demand.

Expatriates. That is a staggering amount of jobs to be created in the Gulf, traditionally the expatriate job seeker's El Dorado. Overseas workers represent 61 percent of the total labor force in Oman, 82 percent in Kuwait, 83 percent in Qatar, 69 percent in Saudi Arabia, 60 percent in Bahrain and 91 percent in the UAE.

Most Gulf countries have extremely youthful populations. In 1999, 42 percent of the total population was under 15 years of age. The Middle East and North Africa (MENA) region registered the highest rates of population growth in the world during the 1970s and 1980s. Although there has since been a decline in fertility, it will take 20 years for this phenomenon to translate into slower growth in the workforce.

Decreasing productivity compounds the regional unemployment problem. In the 1990s, the MENA region had a high proportion of government employees, high wages and extensive state involvement in economic production. Labor markets functioned smoothly in the mid-1980s: there were jobs aplenty as the ever-increasing levels of government outlay matched the demand for labor.

GCC nationals could afford to cherry pick employment options and government jobs, with their generous pay scales and easier working hours, were their first choice. Expatriate workers from other Arab and Asian countries filled the vacancies. However, unstable hydrocarbon revenues could not sustain the situation for long. As government spending tightened during the downswing in oil prices, the growing demand for labor began to taper off.

The GCC private sector offers poor employment opportunities: many private businesses opt for cheaper overseas labor. This is why there still are a substantial number of foreign workers employed in all sectors of the economy, despite unemployment among GCC nationals. Although an increasing number of national secondary school and university graduates come onboard annually, they are not easily absorbed into the private sector, as their skills are not in tune with the needs of private employers.

Economists say that GCC economies currently face both structural and cyclical unemployment. The demand-supply mismatch, where national workers are unable to find jobs that match their skills at the reservation wage rates, create structural unemployment problems.