Foreign Labor in the Arab Gulf - Essay Example

Foreign Labor in the Gulf Region In the 1950’s, the Gulf Region experienced a silent revolution due to oil reserves (Khalaf & Alkobaisi, 1999, p.271). These countries are: Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates (UAE) and Oman (Kapiszewski, 2006, p.2). This revolution transformed the region within a short time period from poor, mostly rural areas into some of the wealthiest in the world. They formed the Gulf Cooperation Council (GCC) in 1981 (Kapiszewski, 2006, p.2). The transformation was catalyzed by the influx of foreign labor (Khalaf & Alkobaisi, 1999, p.272). Their numbers only increased over the years.

The capital rich countries possessed the resources, and labor rich countries possessed the needed skilled workers. Despite the economic benefits, the largest disadvantage has been the overwhelming share of foreign labor on the labor markets of GCC, retarding the development of indigenous labor. Presence of foreign labor increased to dramatic levels in some Gulf countries. Natives of Kuwait, Qatar and UAE have become minorities as a result of the increase in the number of foreigners in their countries (Khalaf & Alkobaisi, 1999, p.272). UAE is the extreme case.

it was estimated in the 1990’s that “nationals constituted only 10-20% of the total population (Heard-Bey, 1997), and only 10% participation in the total labour force (Al-Mansour, 1996)” (Khalaf & Alkobaisi, 1999, p.272). According to Kapiszewski (2006), “[t]he population in the current GCC states has grown more than eight times during 50 years; to be exact, from 4 million in 1950 to 40 million in 2006” (p.2). The only GCC countries that managed to retain low levels of foreign labor are Oman and Saudi Arabia, at 20 and 27 percent respectively (Kapiszewski, 2006, p.2). The flow has been from labor rich to capital rich countries.

Oil rich countries have low population levels. On the other hand, oil poor countries in the region have large populations. Such countries in the 1970’s were Egypt, Yemen, Sudan, Jordan and Syria (“Migrant Workers,”1982, p. 530 – 31). Countries such as Egypt had more experienced labor than countries such as Kuwait, but the latter experienced labor demand (“Migrant Workers,”1982, p. 530 – 31). As a result, labor supply from other countries increased in the oil rich countries. In 1975, Saudi Arabia hosted 773,400 migrant workers, Libya 332,400, the UAE 251,500, and Kuwait 208,000 (“Migrant Workers,”1982, p.

530 – 31). In 2004, there were 6,144,236 foreign migrants in Saudi Arabia, then 1, 707,000 in Kuwait and 3,278,000 in UAE (Kapiszewski, 2006, p.3). The three harbored the largest numbers of foreign migrants in 2006 (see Table 1). Several economic and problems arise out of such a situation. The foreign labor increases demand for already scarce resources such as water, food and housing (“Migrant Workers,”1982, p. 530 – 31). When foreign labor overwhelms the labor market, as in the Gulf, domestic labor force becomes retarded, which the labor force participation rate in UAE confirms (“Migrant Workers,”1982, p.

530 – 31). According to Kapiszewski (2006), migrant workers “have become the primary, dominant labor force in most sectors of the economy and the government bureaucracy (p.2). Foreign labor in GCC overtook the domestic markets, retarding the need for domestic labor.Problems arise for labor exporting countries as well. Skilled workers leave, reducing the pool of skilled labor needed for development. Moreover, in case of the labor exporting countries, imbalances develop between the rural and urban areas as workers move from rural to urban areas, but only some manage to go abroad (“Migrant Workers,”1982, p. 531). Moreover, labor exporting countries benefit less than the host countries.

Most of the remittances are not invested directly in the economy (“Migrant Workers,”1982, p. 530 – 31). Inequalities among countries only increase, although both benefit from the increased economic activity. In short, oil brought along development in GCC, but also a decrease in labor force participation among domestic labor force. Shares of foreign labor reached high levels. Only Oman and Saudi Arabia managed to retain low shares of foreign labor. UAE is the extreme case where natives have become a tiny minority.

ReferencesSulayman Khalaf and Saad Alkobaisi (1999). Migrants strategies of coping and patterns of accommodation in the oil-rich Gulf societies: Evidence from the UAEA. British Journal of Middle Eastern Studies, 26 (2), 271-298. Migrant Workers in the Arab Middle East (1982). Third World Quarterly, 4( 3), 530-531. Library of Congress (2005). “Country Profile: Libya.” Retrieved from http://lcweb2.loc.gov/frd/cs/profiles/Libya.pdf Kapiszweski, A. (2006). Arab versus Asian migrant workers in the GCC countries.

Retrieved from http://www.un.org/esa/population/meetings/EGM_Ittmig_Arab/P02_Kapiszewski.pdf AppendixTable 1Migrant Labor Force in Select GCCCountry\Year19752004Kuwait208,0001, 707,000Libya332,400957,369Saudi Arabia773,4006,144,236United Arab Emirates251,5003,278,000Source: “Migrant Workers” (1982), Kapiszewski (2006) and Library of Congress (2005)