In May 2021, a Kenyan man working in Qatar as a migrant worker was treated by the Qatari authorities as a case of enforced disappearance（※1）. He had been posting on his blog about the situation of migrant workers in Qatar and criticizing systems in the work environment. There is a view that the state handled his blog, which alleged that migrant workers in Qatar occupy a low status and face discrimination, as “false” information. Migrant workers like him who leave their homes to work are particularly numerous in the Gulf countries (※2), and it is said that more than 10%of the world’s migrants live in the Gulf countries. What set the Gulf states on the path to accepting so many migrant workers? And what impact do migrants have on the labor market?

Women taking photos of the scenery in Doha (Photo: slack12 / Flickr [CC BY-NC-ND 2.0])

Toward modern states

The “Gulf countries” refers to six countries located on the Arabian Peninsula in the Middle East and Persian Gulf region. The six countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) belong to the Gulf Cooperation Council (GCC), a form of regional economic integration in the Middle East and Persian Gulf. These countries are located in a region that geographically connects Asia, Africa, the Indian Ocean, and the Mediterranean, and they served as key hubs of transshipment trade. In the early 7th century, after a state based on Islam was formed, they were influenced by great powers such as the neighboring Byzantine Empire and Sasanian Persia. From around the 16th century, the Ottoman Empire expanded and brought much of the Arabian Peninsula under its influence, while kingdoms were gradually formed in various places.

After that, entering the 19th century, European powers strengthened by the Industrial Revolution advanced to replace the weakening Ottoman Empire. Among them, Britain concluded protectorate treaties with Oman, Kuwait, Bahrain, Qatar, and what is now the UAE, placing these countries under British protection. As for the Kingdom of Saudi Arabia, the forerunner of today’s Saudi Arabia, Britain did not make it a protectorate, and Saudi Arabia governed independently. In the latter half of the 20th century, as Britain’s fiscal situation deteriorated, the Gulf countries under British protection began, one after another, to seek independence. Kuwait joined the United Nations in 1963, followed in 1971 by Oman, Bahrain, Qatar, and the UAE joined the United Nations.

Even before independence was being discussed, in the 1930s vast oil reserves were discovered in the Gulf countries. The economy shifted from one centered on agriculture and trade to one centered on oil, and government revenue surged. According to 2018 data, among the Gulf states, with the exception of the UAE at 35% of the national budget, the other five countries rely on oil-related income for more than 50% of their national budgets.

Today, having achieved significant economic growth through oil, these countries have become major players in oil exploration, refining, and export and are equipped with the indispensable capabilities. In addition, with the growing need to build roads, hospitals, schools, and other infrastructure accompanying urbanization aimed at raising living standards, many jobs were also created. And as citizens became wealthier, demand for services that substitute for household labor also increased, including domestic work and caregiving. Against this backdrop, people known as migrant workers began coming from abroad to the Gulf countries. Their numbers grew and came to exceed the number of citizens holding the nationalities of the individual Gulf countries. In 2018, especially in the UAE and Qatar, the share of migrant workers was high, with migrants accounting for 87% or more of the population; across the Gulf countries overall, more than half the population consists of migrants. An estimated about 35 million migrant workers, mainly from Asia and Africa—including India, Bangladesh, the Philippines, and Nigeria—contribute to the economic development of each country.

Toward a society with divided roles

Even when we say “migrants,” among them there are those who migrate for short-term work and those who plan to stay long-term. Overall, men account for around 70% of migrant workers, but in the case of household workers who perform domestic work, women are overwhelmingly numerous. In such a context, what kinds of jobs have migrant workers who came to the countries of the Arabian Peninsula, and the citizens themselves, come to take? Let’s look at the sectoral breakdowns of citizens and migrant workers in recent years in the GCC countries.

From the graph (※3), it is clear that the share of migrant workers in each country’s labor market is overwhelmingly high in the private sector. In particular, in the UAE, about 99% (※4) of people working in the private sector are migrant workers. They carry out mainly low-skilled work such as construction, maintenance, and retail, as well as household labor such as domestic work. Among migrants, some also work as civil servants in their destination country, and there are also cases where migrant workers are accepted as highly skilled talent with specific skills. Meanwhile, many citizens work as civil servants, known for better pay, shorter working hours, and stability. The number of migrants has risen sharply since the initial intake. In fact, compared with 1960 when the UAE began accepting migrants, by 2017 the number had increased more than 3,000-fold. As a result, a structure emerged in which citizens became civil servants, while the rapidly increasing migrant workers were employed in private companies or household labor. In this way, a society of “role-sharing” between the public and private sectors has taken shape in the Gulf countries.

Problems that arise

The transformation in the structure of workers brought about by rapid economic growth has created two major problems. The first is discriminatory treatment of migrant workers. Behind the suffering of migrant workers lies the widely known system in Arab countries called Kafala, a sponsor system for migrants’ visa. It is a legal framework defining the relationship between migrant workers and their employers, and it was adopted as a system in part to make it easier for the government to manage their movements amid significant flows of migrants in and out of the country (system). In other words, under this system, the government effectively entrusts individuals or companies that are employers with the management of migrant workers. Although it varies by country, in many cases the entrusted employer is obligated to cover the travel expenses and accommodation for the employee who is a migrant worker, and at the same time to serve as the guarantor for the worker’s employment visa. Management under this system is thorough, and in many cases passports are kept by the employer. As a result, without the employer’s permission, migrant workers cannot change jobs or leave/return to their home country, and even if they are treated unfairly, they cannot protect themselves. In many cases, migrant workers also fall outside the scope of local labor law. For these reasons, there are cases where migrant workers are forced into labor at the behest of employers and suffer abuse. Because it exacerbates the unequal relationship between employer and employee, it is even referred to as “modern slavery.”

Migrant workers in Qatar (Photo: ILO / Flickr [CC BY-NC-ND 2.0])

An example is the revelation in 2019 October that something akin to an online slave market existed in Kuwait and other Gulf countries, where trafficking of household workers was taking place. The people mainly traded were migrant worker women. Unable to inform those around them about the fact of trafficking, many likely suffered in silence. It shows that many household workers were forced to work in deplorable conditions.

The second problem is the high unemployment rate among the country’s youth. As we have seen in these migrant-heavy Gulf states, youth unemployment is extremely high. In Saudi Arabia it is particularly high at 28%, and in Bahrain, Kuwait, and Oman it is about 20%, figures that are high compared to the world average figures. In the Gulf countries, the share of those under 25 in the population has been rising, accounting for 46% of the total population in Saudi Arabia and an even higher 50% in Oman, clearly indicating a marked increase in the youth population trend. While the youth population is increasing, their high unemployment rate means the impact on society as a whole is significant. There are also data showing that reducing the unemployment rate to the world average would increase economic benefits.

People walking the streets of Riyadh, the capital of Saudi Arabia (Photo: Stephen Downes / [CC BY-NC 2.0])

Many of the growing number of young people show a tendency to prefer high-paying, stable public-sector jobs. While so many young people aspire to become civil servants, the number of public-sector positions does not increase at the same pace, and the public sector does not have the capacity to absorb them. In Kuwait, for example, 36% of the government budget is allocated to the salaries and payments of those working in public institutions, including the civil service, and in recent years public-sector wages have been reviewed. For these reasons, given economic conditions, increases in public-sector employment are unlikely, and reductions may occur. As a result, a situation has emerged in which many wait for openings in the civil service roster, which effectively means they are “unemployed.” Citizens tend not to prefer private-sector jobs because, compared with the public sector, pay is lower and working hours longer, according to reports. Even when they do want private-sector jobs, the relatively higher-paid private jobs often require specialization and skills. However, the education citizens have received often does not match those demanded skills, so there are concerns that few meet the requirements. In addition, the industries and fields young people truly want to work in are not sufficiently developed, leaving them unable to choose even if they want to. In recent years in Saudi Arabia, more young people are interested in tourism than in oil-related businesses. However, as things stand, tourism revenue is only about one-third of total oil-related revenue, and the sector is said to be underdeveloped, potentially failing to supply enough jobs. These issues likely contribute to the high youth unemployment rate.

Way forward (1): Migrant workers

What are the measures countries are actually taking—and what more could be done—regarding the two major challenges in the Gulf countries: the human rights of migrant workers and unemployment among their own youth? First, as a solution to the problems migrant workers face, reform or abolition of the Kafala system referenced above can be cited. In Qatar, in 2020 the abolition of the Kafala system was decided, and it became possible, subject to conditions, for migrant workers to change jobs. In addition, at the beginning of 2021, a minimum wage law was introduced, bringing reforms that guarantee wages for all workers, including household workers who had often faced discriminatory treatment. However, given the widespread international criticism of labor issues during the building boom ahead of the 2022 FIFA World Cup, there is also a view that these reforms are superficial measures for the World Cup.

A stadium in Qatar (Photo: Isabell Schulz / Flickr [CC BY-SA 2.0])

Saudi Arabia likewise began reforms to the Kafala system in March 2021. Nevertheless, because millions of people in the most vulnerable positions—such as domestic workers, drivers, farm workers, and security guards—were excluded from the reform, it is hard to call it a genuine reform. Beyond reforming or abolishing the Kafala system, legal frameworks that protect workers’ human rights are also needed. Migrant workers are confronted with situations where, despite long working hours, their pay is low; when their health suffers and they go to a hospital, they cannot receive the same treatment as citizens; and in court, rulings favor citizens over migrants—denying them basic human rights.

In addition, there is debate about whether to grant citizenship to long-term migrant workers (debate). Workers who migrated when they were young may work in that country for a long time as their second home, yet under the current system they remain “foreigners” forever. In fact, Saudi Arabia uses a points-based system for obtaining citizenship. In addition to speaking Arabic, points are added for more than 10 years of residence, holding a doctorate, and so on, and once a certain total is reached a person can apply for citizenship. However, granting them citizenship may raise concerns about the increase in budget allocations for services provided to citizens that the state would bear. The Gulf countries originally built wealth from oil, and personal income taxes did not exist. While citizens’ tax burdens are light, they receive generous public services from the state. In other words, increasing the number of people with “citizen” rights would increase the number of people benefiting from public services, potentially straining state finances. With recent declines in oil prices, the Gulf countries have begun introducing value-added tax (VAT) systems, suggesting limited fiscal space. Going forward, it will be a challenge for each Gulf country to recognize and respect the rights of migrant workers while acting in line with economic conditions.

A business meeting in the UAE (Photo: ILO / Flickr [CC BY-NC-ND 2.0])

Way forward (2): Citizens

Next, to address unemployment among citizens’ youth, “nationalization of the workforce” policies are being pursued. Nationalization policies aim to increase the number of “citizens” working in the “private sector” by restricting the inflow of foreigners. In practice, in Saudi Arabia and Oman, target ratios for the share of citizens within companies have been set, and measures such as incentives for firms that achieve them have been implemented. However, the reality is that the environments in which citizens came to work in the private sector were not well prepared for them to work with satisfaction. Although companies began hiring citizens, many resigned, making it hard to say the unemployment problem was solved overall. Many lacked the skills needed in the private sector or felt the pay was inadequate, according to reports. Simply raising the number employed in the private sector alone does not seem to lead to a fundamental solution.　

Furthermore, as the Gulf countries in recent years move toward a “post-oil era,” breaking away from excessive economic dependence on oil and natural gas, advancing economic diversification will be a major shift in tackling youth unemployment. A social structure dependent on oil will not necessarily last forever. In a future where sufficient income from oil and gas can no longer be expected, not only may the generous public services to citizens that are taken for granted today become harder to sustain, but the scale of civil service employment will also likely shrink. Therefore, the development of industries other than oil—i.e., economic diversification—is being promoted. In practice, governments have begun investing in construction, real estate, tourism, and research and development requiring technology, attempting to ride the wave of technological innovation.

The affluent landscape of Dubai, UAE (Photo: Paolo Margari / Flickr [CC BY-NC-ND 2.0])

For the development of industries other than oil, growth of small and medium-sized enterprises (SMEs) is essential. However, in the Gulf countries, there is information that banks are currently reluctant to lend to SMEs. To change this, it will likely be necessary for governments to take the lead and work with banks to support SMEs that lack sufficient capital going forward. As economic diversification proceeds, stronger knowledge and skills across various fields will be required. Therefore, “revising the content of education” for citizens will also be necessary, it is argued. There is a view that a gap exists between current education and the skills needed later in the private sector. To prevent these gaps in advance, participating in “vocational education” programs as opportunities to learn and acquire skills useful in the workplace can be considered. In addition to building industries beyond oil, the Gulf countries will need to make the private sector more attractive to their citizens and lay the foundation for people with more diverse skills to be able to work.

Conclusion

Since the discovery of massive oil and gas reserves in the 1930s, the Gulf countries have accepted many migrants. Within such a social structure, each country has achieved rapid economic growth, but we have seen that various problems lurk in the background. As the Gulf countries enter a turning point with the advent of a post-oil era, whether they can adopt policies that move citizens, migrants, and society in a positive direction will be the key going forward. We will be watching closely to see what happens next.

※1　“An act by State agents of arresting, detaining, abducting or otherwise depriving a person of liberty, followed by a refusal to acknowledge that deprivation of liberty or by concealment of the fate or whereabouts of the disappeared person, which place the person outside the protection of the law” (International Convention for the Protection of All Persons from Enforced Disappearance)

※2　The six Arab countries along the Persian Gulf that constitute the Gulf Cooperation Council (GCC).

※3 When each country’s labor force is set to 100, this shows the ratios by citizens/migrants and by public/private sector. In each country, the public sector is calculated as the sum of “Government” and “Mixed,” and the private sector as the sum of “Private,” “Domestic,” and “Others.”

Bahrain: 2018　Kuwait: 2018　Oman: 2017　Saudi Arabia: 2018

Qatar: Ratios are for 2018, but the labor force is calculated using 2017 data

UAE: Total population uses 2016, while the share of the labor force and the sectoral shares use 2017

※4 Calculated using the same method as the graph above (total private-sector employment is 5,939,483, of which migrant workers number 5,889,649).

Writer: Naru Kanai

Graphics: Yumi Ariyoshi , Naru Kanai

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