What does the future hold for expats in the GCC?

For many among the 35 million expat professionals living in the Gulf, the economic fallout of coronavirus can mean a one-way ticket home. Following a sweeping wave of global layoffs and shutdowns, and as economies reopen and flights restart, what does the future hold for foreign workers in the Gulf?  

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Foreign workers make up the majority of the population in the UAE and Kuwait, half of the population in Oman and Bahrain, and one third of Saudi Arabia’s. The economic fallout of the coronavirus will have lasting effects on globalization, and how people migrate for work, affecting the economies of hosting countries and migrants' countries. The IMF recommends countries to retain as many migrants as they can, as they will be needed in the recovery of the hosting country’s economy. 

(Source)

In a city like Dubai, the 23rd most expensive place for expatriates in the world and the first in the region, 92% of the population are expats, according to the 2019 government statistics. 70% of businesses across a range of industries in the emirate expected they would close within the next six months. Losing employment can add to the financial strains for a resident on a work visa. An exceptional measure in April allowed residents to keep their UAE visa until the end of 2020 if they have lost their jobs. 

Some companies are slowly expanding back their staff as the economy reopens, LinkedIn data shows that hiring rates in the UAE are climbing up from -62% in April compared to last year to -48%. Some industries are also doing better than others, software and IT services, healthcare, and corporate services witnessed a growth in job postings. 

In Saudi Arabia, where foreigners make up 10.5 million of the kingdom’s 34.8 million population, approximately 300,000 expats had already left this year so far, and 1.2 million expat workers are expected to leave the Saudi workforce during this year, according to a report by Jadwa Investment. The report predicts the industries that will see the most foreigners job loss will be hospitality, travel, food services, administrative and support activities, security and building services.

Low travel demand had a toll on airlines...and on expats 

Nearly 347,000 jobs are in jeopardy in the Gulf’s aviation industry due to a months-long travel standstill. Airlines in the Gulf have announced multiple layoffs and pay cuts, as most airlines did around the world.

Qatar Airways, which employs more than 46,000 people, said that 20% of its workforce (over 9,000 employees) will be terminated as a result of low demand in travel. Prior to that, Qatar Airport announced 40% job cuts. Emirates has laid off 30% of its staff (that’s 30,000 people), followed by another round of layoffs in June. Etihad has cut hundreds of jobs. Kuwait Airways said that it’s laying off 1,500 foreign employees in May. 

Even though commercial flights are slowly returning to the Gulf skies again as airlines resume some international routes, and with it resumes plans of reopening tourism, it could take air travel three years to recover passenger demand levels to what it was just before the Covid-19 outbreak.

Restarting tourism is also expected to contribute to the recovery of the Saudi economy. The kingdom plans to accelerate mega projects as a way to diversify the economy, following the double shock of low oil prices and coronavirus.

Workforce nationalization in the GCC

In times of crisis, another stress point Gulf expats face is the instability of their employment as countries prioritize providing jobs for citizens as an economic relief.

Kuwait, with an expat population of 3.4 million out of total 4.8 million, aims for a 100% Kuwaiti public sector. In 2019, MPs called for the need to deport half of the expat population in the country. 

About half of Kuwait’s foreign municipality workers were terminated last month. This is one step the country is taking towards reducing the number of expatriate workers, referencing an increasing strain on the country’s resources especially during the Covid-19 crisis. Another step is stopping all future hiring of foreign workers in the oil sector.

State-owned companies in Oman were urged to replace foreign workers with nationals by the country’s finance ministry. The move aims to increase the number of jobs for Omani citizens in the market. 

A large number of foreign public sector employees in Bahrain were terminated recently, with plans for more layoffs during the upcoming six months, Bahraini newspaper Al Watan reported this week (Source content in Arabic). Foreigners make up half of Bahrain’s 1.7 million population. 

?Do you think an impending recovery in some industries can reassure expats in the Gulf? Can expats find new opportunities to stay within the region? Join the conversation in the comments below, along with what you’d like to read about next using #ThatExpatLife