UNEMPLOYMENT IN GCC COUNTRIES

INTRODUCTION

The GCC economies are the fast developing and most dynamics in the Arab world. Their development has mostly relied on migration labor as the local labors force is incapable in needs of the labor market and enough requirements. They face in increasing rate of unemployment, even though they have enough educational qualification. Due to this phenomenon, there is a huge gap between foreign and national labor force. It will exacerbated the position of indigenous citizens to get employment in GCC countries

Unemployment is one of the Gulf Cooperation Council’s biggest challenges: It has the potential to depress per capita standards of GDP, jeopardize standards of living, and breed economic inequality. Underemployment (overstaffing or mismatching of skills) is also 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; for this reason so many expatriates make up the GCC’s private sector workforce.

CAUSES AND PROBLEMS

GCC countries face many problems in the phase of employment. an education system not well aligned with the needs of modern industry; citizens conditioned to expect that governments will always take care of them; and often-ineffective policies in areas such as immigration and retirement. Compounding the problem is pressure on the region to generate hundreds of thousands of jobs annually: according to recent World Bank projections, the GCC’s labor force will exceed 20.5 million by 2020—an increase of almost 30 percent from the current estimated labor force of 15.6 million.

About the unemployment of Saudi Arabia, an observation has done by Saudi human development report 2003.it remarks that “the unemployment that exists is of the structural type which results from the fact job seekers qualifications and training levels do not match the requirements of the jobs an offer. In other instances, job seekers’ occupational and training characteristics may conform to the requirements of the jobs on offer, but the mismatch, or non conformity, lies in the conditions acceptable to job applicants”

. The limited participation of women and high population in GCC countries to the labor force are crucial facts. Due to Lacks of enough educational and needed requirements they don’t obtain much opportunity in the labor market.

Employment has become less desirable among GCC citizens. The trend towards the privatization of many public sector holdings would reduce the role of the public sector in the economy and in turn reduce the import of foreign labor and instances of disguised unemployment. Oil revenues are creating unprecedented wealth in the Gulf, but high unemployment rates among unusually young workers are forcing these countries to implement reforms to their financial and educational systems

OIL BOOMS AND UNEMPLOYMENT

During oil booms in previous decades, GCC nationals were given high-paying jobs in government agencies or government-owned companies, but these jobs are now saturated. Unemployment problem in the GCC countries started in the late 1980s when oil prices lost nearly half their real value. When the domestic economy was growing at 15 per cent per annum, against a population growth of four per cent during the oil boom, the current single digit growth rate is insufficient to cope up with the increasing demand for jobs, Unofficial estimates put overall unemployment in Saudi Arabia, Bahrain and Oman at 15 per cent or more, and unemployment among 16- to 24-year-olds at more than 35 per cent. . In Saudi Arabia, 61 per cent of the population is under 25 years of age, compared with half of India's and 39 per cent of China's.

UAE has same unemployment problem even with a small population. Nearly 180,000 companies registered in the UAE are only post box companies, created by an unholy nexus of locals and expatriates to engage in buying and selling visas. According to the UAE Labor and Social Affairs Ministry, only 48.6 per cent of the 350,000 companies registered with the Ministry are active companies. The rest are inactive or could be classified as imaginary institutions. This means that their 540,000 workers are in fact unemployed according to a special committee appointed by government to study the labor market. The Omani private sector is unable to employ 40,000 or 50,000 graduates that come out every year and Qatar experienced 3.2% unemployment in 2007.

The over dependency on the expatriates also is another problem. But they ought to prepare for much job creation for nationals. There should be efforts by all GCC countries to increase their own qualified manpower. The GCC countries need an extensive regional planning in terms of the use of educational infrastructure and on job training for the sake of human capital information. Al though some efforts are being done in this direction, they continue to remain piecemeal and inadequate.

Labor market reform

To prevent the unemployment and lack s of qualification, there should be possible long- term labor market reform project which helps the nationals to obtain and develop the necessary skills. There fore the GCC countries have started to ponder on this important matter. In 2003 international monitory fund’s report on labor reform of GCC countries deliberately describes the proper information

CONCLUSION

If labor market reform happens as they wish properly, the intensive unemployment can be reduced or stopped. But a lot of attempts have been done in this sector only which could not find any results. And this project also was prepared in 2003, the unemployment phenomenal is still going on. There should be more fruitful project that can be implemented gradually to eradicate the unemployment and create more job creation for GCC nationals.

REFERENCES

1. Contemporary West Asia politics and development, edited by Dr. Anwar Alam

2. Dr. Anisur Rahman,contesting Homogeneity in the Gulf society

3. Contemporary Saudi Arabia and the emerging Indo-Saudi relations, edited by Gulshan Deitl. Girish Pant, A.K. Pasha and P.C.Jain.

4.http://www.booz.com/me/home/hwat%20we%20think/40007409/40007869/48141199?pg=0

5. http://www.ameinfo.com/139517.html

6. http://www.keralamonitor.com/july11.html

7. Gulf Research Center, June 2005, tp://www.grc.ae/index.php?frm_module=contents&frm_action=detail_book&sec=Contents&override=Articles&PHPSESSID=dcef717f6382b42dcd1c7a8bba06e56e%20%3E%20Demographic%20Changes%20in%20the%20GCC%20Countries%20and%20the%20Problem%20of%20Labor%20Rights%20in%20the%20Age%20of%20Globalization&book_id=17464&op_lang=en.

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