Low-skilled expat workers in Middle East worst hit as hiring drops 50% over coronavirus

Expatriate workers returning from Egypt, Syria, and Lebanon arrive at a Kuwaiti health ministry containment and screening zone for COVID-19 coronavirus disease in Kuwait City on March 15, 2020. (File/AFP)
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Updated 14 July 2020

Low-skilled expat workers in Middle East worst hit as hiring drops 50% over coronavirus

  • In June, job opportunities in the UAE began to slightly increase
  • One million of five million Egyptians working in Arab countries will be terminated by the end of 2020

DUBAI: The labor market in the Middle East has been severely impacted by the coronavirus disease (COVID-19) pandemic, leaving millions of expat workers with no choice but to pack their bags and leave.

Hiring activity has dropped by 50 percent from 2019, a Gulf Talent analyst told Arab News.

In Kuwait, about 1.5 million expat workers are expected to leave the country by the end of 2020 due to the economic downturn after the state forced companies to cut their workforce.

The expats, who “are either illiterate or can merely read and write,” were not the country’s priority, Kuwait’s Assembly Speaker Marzouq Al-Ghanem said.

“While some officials in Kuwait have echoed these sentiments, political gridlock in the country’s parliament has thus far prevented decisive movement on the labor front. However, political momentum for labor market reforms that reduce the number of expatriates in Kuwait seems to be gaining speed,” Dr. Robert Mogielnicki, resident scholar at the Arab Gulf States Institute in Washington, told Arab News.

In Saudi Arabia, 1.2 million expat workers are also expected to leave the Kingdom this year, according to the Jadwa Investment Company’s latest figures.

In Egypt, it is estimated that one million of five million Egyptians working in Arab countries - especially in the GCC - will be terminated by the end of 2020, local daily Egypt Today reported citing the head of Expats Employment Unit at the Chamber of Commerce Hamdi Imam.

He added that Saudi Arabia - which has three million Egyptians working in it - has suspended multiple mega projects. And in Kuwait, he added, many Egyptians do not have contracts as they are irregular workers and carry expired residency permits, causing them to leave the country.

Low-skilled workers in the Gulf region will struggle the most when it comes to securing their jobs. They depend on actions taken by governments to address the socioeconomic concerns of citizens, Mogielnicki said. The higher-skilled employees have deeper socioeconomic networks and more labor market flexibility, he added.

Wages have also dropped significantly, causing applicants to expect much lower salaries than prior to the outbreak. In February 2020, jobseekers anticipated their next job would offer them an average wage of 14 percent more than their previous job but in today’s market, the average salary payment expected is just 2 percent higher, Gulf Talent analyst said.

In June, job opportunities in the UAE began to slightly increase, yet they still remain lower than the levels seen before the closure of schools in March, a report by Gulf Talent said.

Expats in Gulf Cooperation Council countries are struggling to secure their jobs, as Gulf states are calling for an increase in workforce nationalization in government entities as well as market forces impacting private sector employers, Mogielnicki said.

“Although countries around the world may be looking inward these days, it is impossible to ignore the forces of globalization. Both globalization and nationalism will remain pertinent forces shaping the contours of Gulf labor markets for the foreseeable future,” he added.

Foreign employees working in Oman’s health sector institutions have also been at risk since February due to the government’s proposal to hire Omanis in technical positions as part of the Sultanate’s nationalization plan, the local Times of Oman reported.

But in the UAE, medical professionals witnessed an increase in demand compared to the period prior to the COVID-19 outbreak, as 18 percent more interview invitations were received by applicants in April than in February.

When asked about the outlook for the labor market by the end of 2020, the Gulf Talent analyst said the presence of both the pandemic and lower oil prices forecast a recession in the majority of countries in the region, and more job losses would continue to take place.

“At the same time, some hiring activity should pick up as companies restructure, look for new skill sets or lower-cost employees, and to replace people who leave,” the analyst added.

Mogielnicki said he expected the aviation sector to remain affected by the pandemic well into 2021, adding that it was one of the largest employers in the region. “Industries that rely primarily on the transnational flow of people and, to a lesser extent, goods, will continue to suffer for some time. Industries involved in the provision of digital services and other technology-based platforms and applications will fare better,” he added.

Gulf Talent also said it expected the aviation sector to continue to be affected, with the hospitality and commercial real estate sectors added to the list. The analyst said it may take longer for the aviation sector to get back to previous levels, as business travel and work patterns may have changed permanently by the current shift to remote working.

“The Gulf region has a large service sector, and not all of these jobs can be done remotely. EdTech and HealthTech platforms have enabled many educational and healthcare services to function virtually. Other service-related industries that rely on in-person interactions may struggle to manage lower levels of customer demand over the coming months,” Mogielnicki said.


Dubai launches economic program for post COVID-19 recovery 

Updated 05 August 2020

Dubai launches economic program for post COVID-19 recovery 

  • “The Great Economic Reset Programme” is part of a “COVID Exit initiative” to help the recovery and reshaping of the economy
  • The economic program will feature analyses of current and future policies

DUBAI: Dubai launched an economic program as part of its efforts to reshape the emirate’s economy for a “sustainable” and “resilient” future post the coronavirus pandemic, the government said. 
The Dubai government partnered with the Mohammed bin Rashid School of Government (MBRSG) to launch “The Great Economic Reset Programme” as part of a “COVID Exit initiative” to help the recovery and reshaping of the economy, state news agency WAM reported on Tuesday. 
The economic program will feature analyses of current and future policies, research and extensive stakeholder consultation to set the direction and tone of future economic policies, regulations and initiatives.
The government plans to use local and international experts for economies and societies to create growth strategies for the Dubai economy.
The MBRSG held a “Virtual Policy Council,” with global experts and thought leaders to discuss the impacts of COVID-19 on the economy and potential policy responses and initiatives. 
Chief economists, senior practitioners and researchers from leading global institutions including the World Bank, joined experts from Dubai Economy and the MBRSG at the first roundtable.
“I believe the triple helix collaboration between public, private and academia stakeholders have always produced the best solutions in the past. In the highly uncertain environment now, extensive collaboration and cooperation between all stakeholders are vital to our future prosperity. The Virtual Policy Council will propose the best approaches Dubai and the UAE can adopt to address the risks and opportunities in the next normal economy,” said Mohammed Shael Al-Saadi, CEO of the Corporate Strategic Affairs sector in Dubai Economy.
“This Virtual Policy Council is a key component of the whole process where global experts and thinkers share their views on the future economy. In this new era, the role of governments in enabling the new economic actors is becoming increasingly central, and Dubai is well-positioned to lead the way with innovative models of growth post COVID19,” said Professor Raed Awamleh, Dean of MBRSG.
The roundtable also discussed the impact of the pandemic on international trade, foreign investment and tourism, as well as the rise of digital globalization.