| Kippreport.com

The expat invasion

May 30, 2010 1:01 by Samuel Potter

The paper argues that expats began arriving in the Gulf in the 1960s when oil was discovered and a huge construction and development drive began. GCC countries needed both manpower and technical assistance, but since the 1990s that has not been the case as most infrastructure was developed, oil income dropped and qualified nationals emerged from education.

Now, most expats represent a drain on the economy, argues the GCC Secretariat. “Besides their social and security burden, the large numbers of expatriates constitute heavy financial pressure on the GCC economies given their massive transfers out of the region.” Remittances out of the region topped $40 billion in 2008, for instance, and this figure does not include unofficial transactions. For the UAE alone, the figure was in the region of $9 billion.

There are huge demographic and economic implications for countries that attract a high number of expats. But if GCC countries wish to tackle the issue they will surely have to tread carefully; to achieve ambitious economic growth (the UAE’s Minister of Economy Sultan Al Mansouri said he wants to see economic growth of between 2 and 2.5 percent, for instance) a ready and willing workforce will be required.

The GCC Secretariat believes that work force is largely avialable domestically, and its report went on to suggest that the expat influx made it hard for nationals to find jobs. But in the UAE the statistics don’t necessarily bear that out. The National Bureau of Statistics says that nearly 20 percent of the total population were voluntarily unemployed, and only 2.3 percent were actively looking for work.

The implication is, therefore, that a GCC-wide “one-size-fits-all” policy on foreign workers may not suit every country.

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Tags: 8 million, crisis, economic activity, Economy, expats, explosion, gcc, growth, LEAP, population, UAE, workers