Job nationalisation 'daunting task'

Gulf hydrocarbon producers are facing a daunting task in their ongoing measures to replace foreigners with national workers in the private sector as companies still prefer to hire less costly expatriate labour, a former Indian diplomat has said.

Talmiz Ahmad, ex-ambassador to the UAE, Saudi Arabia and other Gulf countries, said that labor markets in the Gulf Cooperation Council (GCC) have witnessed considerable transformation over the past two years as the governments concerned have vigorously taken up the expansion of employment opportunities for the national workforce.

In an article published in Abu Dhabi, he said nationals tend to dominate the government and public sectors, while expatriates occupy over 80 percent of jobs in the private sector in the GCC, which controls 40 per cent of the world’s oil resources.

“While every effort is now being made to create new jobs in government, the principal challenge in the GCC is to ensure that nationals are increasingly represented in the private sector,” he said in the article, published by the Emirates Centre for Strategic Studies and Research, a key regional think-tank.

“This is a daunting task because owners of private companies have preferred foreigner workers over the last 40 years.”

Citing official data, he said that foreigners now constitute about 40 per cent of the GCC’s total population of more than 45 million.

“Given that unemployment amongst GCC youth is well over 20 per cent amongst men, and much higher among women, this overwhelming presence of foreigners in the private sector is no longer a viable option,” he said.

Turning to Saudi Arabia, the world’s largest oil exporter, he said the government in early 2011 introduced the “nitaqat” (ranges) system in terms of which private sector entities would be subjected to a set of conditions if they fell short of employing a prescribed quota of nationals, along with substantial incentives for those that met their quota.

The nitaqat system jolted a complacent private sector, particularly since companies that failed to meet their quota of national employment faced closure, he added.

While ensuring compliance, the government also assumed responsibility to fund training programs for the young nationals and pay a part of the salary in the early months.

In order to ensure that newly trained employees did not abruptly leave their companies for better prospects elsewhere, they were also required to work for a prescribed period.

“While other GCC countries have not yet introduced such measures, they remain committed to expanding national employment,” Ahmed said.

“For the foreseeable future, the employment of nationals is not likely to reduce the dependence on foreign workers, even in the white collar categories,” he said.

“This is because every GCC country has embarked on new development projects in the infrastructure, energy, industry and services sectors, valued at several hundred billion dollars, which would need workers with the skills and experience that are not available locally in the required numbers. Therefore, the massive expansion of economic opportunity in the GCC will employ nationals with the required training and experience even as foreigners continue to be recruited in large numbers.”

Ahmed noted that apart from the new emphasis on recruitment of nationals, amnesty for illegal workers, has been another significant development in the labor markets over the last few years. He said that in every amnesty, several thousand illegals are identified in each country, adding that during the 2007 amnesty in the UAE, over 400,000 illegals left the country, while over 150,000 regularized their stay with alternative legal employment.

Such an amnesty is now ongoing in Saudi Arabia, with over 200,000 illegals having left the country in the last three months.

While it is not in the interest of any country to harbor illegal residents in their hundreds of thousands, it would be useful to look at the circumstances in which so many people become illegal, according to Ahmed.

“ In several instances, workers prefer to stay on in the country after their contract has expired, being under the impression that the wages they earn in the informal sector would still leave them better off as compared to working at home,” he said.

“This assumption is quickly corrected when their savings dwindle, living conditions worsen and sense of insecurity heightens. There are also cases where employers fail to meet the terms of the contract with the worker or declare the worker huroob (escapee) to avoid payment of end-of-service benefits.”

Ahmed noted that there is now much better dialogue at bilateral and multilateral forums between the GCC and labor-sending countries to address matters relating to labor welfare, with an emphasis on improved scrutiny of employers, recruiting agents and contractual obligations before the departure of the worker.

At the multilateral level, the Abu Dhabi Dialogue – set up in 2008 to bring together labor-sending and receiving countries – has also been found to be a valuable platform to address the concerns of the employers and improve the conditions of contractual workers in the Gulf, he added.

 “As of now, the employment scenario in the GCC continues to be in a stage of transition due to the twin challenges of expanding the recruitment base of nationals while coping with thousands of illegals. In the long term, however, there is little doubt that GCC youth will gain in skills and confidence and will increasingly occupy the employment space in their countries.”
 

Follow Emirates 24|7 on Google News.