GCC hit by high youth unemployment

Gulf oil producers have one of the lowest joblessness rates in the world but unemployment among nationals, mainly the youth, remain a problem because of their heavy reliance on expatriates, according to Saudi bank study.

Unemployment among native citizens in the six-nation Gulf Cooperation Council (GCC), the richest in the Arab world, has remained far higher than the rate among the expatriates, who come to the region for work and leave once they lose their job, Saudi Arabia’s largest bank, National Commercial Bank  (NCB) said in the study sent to Emirates 24/7.

“Even though the headline rates of unemployment in the GCC countries may not be exceptional by global standards, unemployment is a persistent problem in parts of the region, especially among nationals,” it said.

“Of course resident expatriates usually come to the region on work visas and their unemployment tends to be largely transitional.”

The study said the joblessness problem among the young generations is “more acute” than the rate among other groups.

“Quite beyond the headline unemployment rates, the problem of joblessness is particularly acute among certain sub-segments of the population. In particular, it tends to disproportionately afflict the region’s rapidly growing young population.”

 Citing Saudi Arabia, NCB said unemployment among the 15-19 age group according to the latest government data (2012) is 27.3%.

Among the 20-24 category, it has reached some 28.0%, it said, adding that the proportion among 25-29-year-olds is also as high as 14.3%.

In the UAE, youth unemployment is three times the overall unemployment rate, standing at around 12.1% vs. 4.0%, the report showed.

In Kuwait, 36.3% of all the unemployed were 20-24 years old in April 2011. Nearly 17.4% of them were 25-29 and 10.1% 30-34 years of age.

“Similarly, female unemployment in the region is consistently higher than that of men. The 2010 figure for Saudi women was 28.4% against 6.9% for Saudi men. Women constitute at least 75% of job seekers in the Kingdom,” NCB said.

“This problem represents significant underutilization of human capital. According to one recent estimate, around 78.3% of unemployed women in Saudi Arabia have university degrees while the same is true for only 24% of men.”

The report showed that among UAE nationals, female unemployment of 28.1% compares to male unemployment of 7.8%.

Among Qatari women, unemployment in 2011 reached 8.0% as compared to 1.7% for men. In Kuwait, women made up 77.0% of the total number of unemployed in April 2011.

“In spite of the considerable communalities across the region, Bahrain and Qatar appear to have made significant headway in containing their unemployment problem in recent years,” NCB said.

The report said a significant proportion of joblessness in the GCC is “structural” as highlighted by the fact that the overall rate has in many cases not meaningfully responded to economic growth.

For instance in the UAE, NCB said, although the economy went through a spectacular boom in the years preceding the global crisis, unemployment among Emirati nationals in 2009 still remained a relatively high 14%.

Saudi national unemployment in 2009 stood at 10.5%, while the total number of the unemployed reached 615,249 in 2012.

“The economic cost of unemployment was recently put by the Saudi Ministry of Labor at SR5.5 billion a year. Consistent with the labor market mismatches, available data on unemployment duration suggests that much of the joblessness is relatively long term.”

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