Labour Migration in the Gulf Cooperation Council States: Comparative Analysis of Labour Nationalization Policies

Abstract

In recent decades the countries of the Gulf Cooperation Council (GCC)1 have become the largest labour market for foreign workforces in the world. Since the discovery of oil in the 1970s, the economies of Gulf countries have become highly dependent on oil, their largest natural resource, and rely heavily on imported labour force for their development and economic growth. Labour migration in the Gulf has had a very significant impact on the politics, economy and the social structure of the country. It has created rapid development, but at the same time led to a number of negative socio-economic and cultural consequences. Today, the population composition in the GCC states represents a unique phenomenon as in most of these countries nationals have become a minority. Additionally, the levels of youth unemployment among nationals across the GCC are very high. The GCC governments perceive that the high proportion of migrants in the population negatively influences the national culture and creates a strong demographic imbalance. However, due to the fact that Gulf states are very wealthy and are able to provide high living standards for their population, most of the young people are not willing to accept the work the migrants are employed for. This, in consequence, contributes to high demand for migrant labour and a high level of national unemployment. In recognition of the need for measures to deal with these problems of high dependence on foreign labour and unemployment among citizens, the GCC governments have developed policies of nationalization of the labour force, which encourage the replacement of foreign workers with nationals. These nationalization programmes are referred to as Emiratization, Saudization or Omanization, depending on the country. The programs have been in place for more than a decade, but have brought limited results. The public sector has become quite successfully nationalized, but the private sector is still mostly represented by migrants, as all GCC countries are still very dependent on foreign labour. The aim of this thesis is to make a comparative analysis of labour nationalization policies in the Gulf Cooperation Council states and to examine how economic and socio-political factors influence their implementation. The thesis will analyse how variables of an economic and socio-political nature, namely rentier economic structures, the political structure of the states, the cultural attitudes of the national population, and the structural demand for foreign labour, influence the effective implementation of nationalization policies, particularly the introduction of nationals into the private sector workforce and the reduction of foreign workers in the labour markets. It is argued that these variables affect the incentives to nationalize the workforce and that they create a barrier to the successful implementation of labour nationalization policies. The argument will focus on case studies of three GCC countries: the United Arab Emirates, the Sultanate of Oman and the Kingdom of Saudi Arabia. This research is an attempt to explain why despite a common commitment to nationalization policies, the GCC states have not implemented them very effectively, and why, despite many common features among the Gulf states, some have been somewhat more successful in implementing the policy than others. The thesis looks at each variable to analyse if they provide an explanation to both or either of these questions and argues that economic and political factors provide more explanatory power as to why some states have progressed further down the nationalization path. In sum, this thesis maintains that labour nationalization policies are not an effective immediate solution to the current labour market situation in the Gulf. The changes in societal attitudes towards work as well as the changes in rentier politico-economic structure of the GCC states require more time and more thought-out plan for effective introduction of national population into the workforce.