Expatriate employees are leaving the Middle East and going elsewhere in search of work, with governments choosing to prioritise the welfare of their own nationals in the wake of the economic downturn.
Saudi Arabia’s new labour law, which according to an order issued by Saudi Arabia’s Ministry of Labour and Social Development has stopped expats from working across 12 key sectors in the Kingdom.
Expat visas in Saudi Arabia are now valid for only a year, compared to the previous duration of two years. Private companies are charged SAR200 to bring in an expat employee whenever they employ more expats than locals, but that fee is expected to steadily increase to up to SAR800 in the next two years.
From July 2017 onwards, expats in the Kingdom also had to pay SAR100 per month per dependent to the government. Overall, more than 700,000 expats left the GCC nations since the beginning of 2017 and May 2018.
“Over the years since the oil boom, history has witnessed a growing expatriate labour force in the six GCC nations,” said Ramanuj Venkatesh, a financial analyst with experience in both Oman and the UAE.
“However, fast forward to 2018 with the inception of VAT and the increasing demand for locals in the workforce, companies have been tightening vacancy slots and not hiring qualified talent.”
“For instance, Saudi Arabia, being one of the major players in the oil market, witnessed a baby boom resulting in a high rate of population expansion,” he added.
“With its local young talent accounting for 70 per cent of the population, there is an increasing demand for these people to be trained and given jobs which are occupied by expatriates.”
In Oman there are 1,830,394 expat workers as of May 2018, compared to 1,854,880 at the end of December 2017, a 2.1 per cent decrease over the past year. The number of expat workers who have advanced education dropped significantly, as a result, by an average of 4.8 per cent. In addition, the number of expats who have preparatory and secondary school education also dropped by some 6.8 per cent.
In the United Arab Emirates, data from the Federal Competitiveness and Statistics Authority showed that unemployment levels for Emiratis stood at 6.9 per cent in 2016. Unemployment by gender stood at 12 per cent for Emirati women and 4.5 per cent for men, down from 17.1 per cent of women and 8 per cent of men in 2014, according to the annual report issued by the UAE Ministry of Economy, which would point to an intensification of the country’s Emiratisation policies.
With the UAE’s expat population far outnumbering locals, the UAE government has plans to balance the demographic mix between expats and nationals by the year 2021.
The UAE’s biggest employment sectors are the wholesale, retail, trade, and repair services, which accounted for 1.121 million workers of 19.1 per cent of the total workforce in 2013.
This increased to 1.13 million or 18.6 per cent of the total workforce in 2014. The second-largest sector was the construction and building industry, which employed 1.146 million workers and contributed 19.5 per cent to the total workforce in 2013. That number went up to 1.212 million workers in 2014, accounting for 19.9 per cent of the net workforce.
Data from the Central Statistical Bureau of the State of Kuwait points to a similar situation, with non-Kuwaitis in the private sector accounting for 1.489 million workers in 2016, up from 1.367 million in 2015 and 1.396 million in 2014.
In contrast, there were only 70,857 Kuwaiti workers in the private sector in 2016, down from 75,308 in 2015, but up from 61,652 in 2014.
The situation was more optimistic in the public sector which employed 277,935 Kuwaitis, compared to 99,780 expats, in 2016. In 2015, 276,109 Kuwaitis and 95,907 foreigners were part of the public sector, compared to 258,608 Kuwaitis and 94,660 expats in 2014.
As of 2016, however, 17,578 Kuwaitis said they had been unemployed for a considerable amount of time, up from 17,269 the previous year. Of that number, 8,422 said they had been out of work for more than 12 months in 2016 compared to 9,463 in 2015. A total of 92 per cent of all nationals work for the government.
Meanwhile, expat labour figures hold strong in Qatar, where data from the Ministry of Development, Planning, and Statistics showed that non-Qatari employees accounted for 1.947 million of the 2.05 million workers in the Qatari labour force at the end of 2017, a slight decrease from 1.949 million at the end of 2016.
In Bahrain, the number of expat workers dropped by roughly 6,000 workers in 2017, with 610,510 workers registered in first quarter of 2017 compared to 604,697 at the end of the year.
In contrast, there were 156,782 Bahraini workers at the beginning of the year, which increased to 158,415 by the end of 2017.
There was a 4 per cent decrease in the number of foreign workers, while the number of locals rose by 0.8 per cent, according to Bahrain’s Labour Market Regulatory Authority.