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Change of Policies Required to Tackle Growing Unemployment in the GCC

Middle East : 19 May 2010

A recent report published by Booz & Company stresses the importance of policy change to meet the economic demand for qualified local professionals and to decrease the levels of unemployment found among GCC nationals.

According to the report called ‘Meeting the employment challenge in the GCC: The need for a holistic strategy’, all GCC states share similar issues in the labour market which are largely caused by the same factors in relation to current policies. There appear to be several main problems, common to all GCC countries:

- Lack of jobs for GCC nationals

- The necessity to decrease the unemployment rate by finding work for the local qualified individuals to substitute the expatriate work force

- A negative attitude towards vocational employment amongst the local population.

The report suggests that in order to improve the existing situation in the job market, a “holistic strategy” is required. This would include a pro-active shift in social and economic policies to target the cause of these issues rather than the consequences, by improving the skills and talent of the population through the right training and education.

The report suggests that the current education system is not aligned with existing economic targets. There is a huge gap between the number of required qualified individuals and the actual number of people who possess the skills necessary to do the job. Higher education needs to be more relevant to existing economic demands.

Improvements could be made by making the education system more strategic based on chosen social and economic goals, increasing the role of the government, improving scientific research in higher educational institutions, developing vocational courses and improving results of publish and private schools.

All GCC countries need to classify and grow the economic sectors that have a high probability of increasing the number of “value-added” jobs for locals.

Labour and immigration policies also need to be reformed  - since the 1970s there has been a huge flow of expatriates coming into the GCC to keep strategic industries running smoothly, which, whilst being beneficial to the economy, has brought also some negative consequences.

A change in sponsorship system could potentially increase the mobility in the labour market. Booz & Company suggested that if all of the GCC countries adopt the Bahraini model it would reduce the risk of abuse as well as increase the mobility of the workforce.  If the NOC is abolished, expatriates would be able to choose work where their skills are required.

Another social problem which has to be changed is the benefits system, as identified by Booz & Company. The current system does not encourage unemployed to get back to work and the cash handouts become increasingly high as a result of higher standard of living and the growing numbers of out of work youngsters. This social system is not sustainable in the long run, and the concept of Kafalah needs to be reviewed.

There is definitely a huge challenge ahead for all the GCC states as they have to address the growing number of GCC workforce who are about to enter the job market. According to the World Bank figures, the workforce in the Gulf Cooperation Council could be more than 20.5 million by 2020 which is 30% more than the current figure of 15.6 Million.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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