Expats leave the Gulf

The coronavirus pandemic has taken its toll on the expatriates of the Persian Gulf, skilled and unskilled workers who represent an exorbitant portion of the workforce in the region and who in many cases are leaving the region due to business closures and the high cost of living. Expatriates from the Gulf make up 88 per cent of the population of the United Arab Emirates (UAE), 75 per cent in Kuwait, 65 per cent in Qatar, 48 per cent in Bahrain and 37 per cent in Saudi Arabia. All those in the region account for 10% of the world's migrant workers, according to 2018 data from the International Labour Organization (ILO).

In recent weeks, tens of thousands of foreign workers stood in front of their consulates for days to secure a place on evacuation flights after losing their jobs in the Emirates due to the pandemic. Most were unskilled workers facing the suspension of businesses where they were working virtually on a daily basis, but the effect of the pandemic goes beyond unskilled labour.

Oxford Economics Middle East estimates that the unemployment resulting from the pandemic and its impact will lead to a 13 per cent drop in employment in the Gulf, with some 900,000 jobs lost in the UAE and 1.7 million in Saudi Arabia. A recent report by Jadwa Investment estimates that about 1.2 million foreign workers could leave Saudi Arabia this year.

The ILO says there are no overall figures yet for this impact, but the Indian government has already estimated that hundreds of thousands of its workers in the Gulf would return home, while 10 to 30 per cent of the half million Nepalese in the region could lose their jobs. "We are getting an idea of what the scale of the returnees will be, more numbers are coming in, but they are leaving their countries of origin," ILO Migration Specialist for Arab Nations Ryszard Cholewinski told Efe.

This is not the first time that there is a flight of immigrant labour in the region, which already experienced something similar during the 2008 financial crisis, although the difference lies in this occasion in which sectors such as tourism, oil and construction are already trying to recover.

In principle, projects of universal scope such as Expo 2020 organized by the United Arab Emirates and the World Cup 2022 in Qatar do not seem to be in danger due to the lack of labor, but other projects that depend heavily on them, especially in construction, could be affected.

For the executive director of the Fursa consulting firm, Abdul Moiz Khan, the departure of foreign labour will give options to local staff. "There will be opportunities for governments to create enough jobs for their citizens," he told Efe Khan, for whom the new scenario will make it possible to lower hiring costs by eliminating or reducing expenses on visas or social security, leaving a surplus that companies can share with their employees.

Also for the director of JAM Consultancy-GRC Learning Consulting, Arnaud Bertrand, the situation is an "opportunity" to progressively balance the role of locals in the economy and encourage young people to join the private sector. "It could be more complex for expatriates to return quickly and therefore an opportunity to stimulate domestic employment," he said.

The Emirates, with the sixth largest immigrant population in the world, has a more diverse private sector and therefore more capacity to keep expatriates within its borders. So while other Gulf countries are opting to cut jobs for expatriates in favor of locals, in the UAE this approach is not possible because of its "patchwork economy" or varied economic activity, the managing director of the Emirate's labor consultancy TBH told Efe.

While the International Monetary Fund (IMF) warns that keeping expatriates will help restore basic services to the economies, companies are betting on reducing and offering only really necessary jobs.