5.4 Labor markets and migrant workers in oil-rich states
3 min read•july 23, 2024
are uniquely structured, separating national and . Nationals enjoy cushy public sector jobs, while migrants dominate the private sector. This system, reliant on the controversial kafala sponsorship, enables economic growth but raises concerns about exploitation.
Migrant workers are crucial for Gulf economies, driving and diversification. However, their large presence creates and social challenges. Gulf states face pressure to reform labor markets, improve working conditions, and reduce while maintaining economic growth.
Labor Markets and Migrant Workers in Gulf States
Structure of Gulf labor markets
Top images from around the web for Structure of Gulf labor markets
‘We Are Not Slaves, We Want Our Rights’: Lebanon’s Migrant Domestic Workers March on Labour Day ... View original
Is this image relevant?
‘We Are Not Slaves, We Want Our Rights’: Lebanon’s Migrant Domestic Workers March on Labour Day ... View original
Is this image relevant?
1 of 1
Top images from around the web for Structure of Gulf labor markets
‘We Are Not Slaves, We Want Our Rights’: Lebanon’s Migrant Domestic Workers March on Labour Day ... View original
Is this image relevant?
‘We Are Not Slaves, We Want Our Rights’: Lebanon’s Migrant Domestic Workers March on Labour Day ... View original
Is this image relevant?
1 of 1
Dual labor market structure separates national and migrant workers
National workers primarily employed in public sector jobs with generous benefits and job security (government agencies, state-owned enterprises)
Migrant workers concentrated in private sector with lower wages and fewer benefits (construction, hospitality, domestic work)
Heavy reliance on migrant workers to fill labor shortages and meet economic demands
Migrant workers make up significant portion of total workforce (up to 90% in some Gulf states like UAE and Qatar)
Employed across various sectors to support economic activities and development
Kafala (sponsorship) system ties migrant workers to their employers
Employers sponsor workers' visas and residency permits, granting them control over workers' mobility and employment
System criticized for enabling exploitation, abuse, and limited freedom for workers (passport confiscation, restricted job changes)
Migrant workers in Gulf economies
Migrant workers contribute significantly to infrastructure development in Gulf states
Essential in building modern infrastructure projects (roads, buildings, airports, stadiums)
Provide necessary labor for construction sector, a key driver of economic growth
Fill labor shortages in various industries critical to Gulf economies
Employed in wide range of sectors (construction, hospitality, retail, domestic work)
Help maintain functioning and growth of these sectors by providing needed manpower
Enable efforts by supporting growth of non-oil sectors
Presence of migrant workers allows Gulf states to expand economies beyond oil dependence
Contribute to development of tourism, manufacturing, and service industries (hotels, restaurants, shopping malls)
Social impact of Gulf migration
Large migrant worker populations lead to demographic imbalances in Gulf states
Migrant workers often outnumber local population (e.g., 88% of UAE population are foreign workers)
Raises concerns about cultural identity, social cohesion, and long-term demographic sustainability
Limited integration and of migrant workers in Gulf societies
Migrant workers often segregated from local population, living in separate housing compounds
Face discrimination, limited access to social services (healthcare, education), and restricted social mobility
Political concerns arise from large migrant worker populations in Gulf states
Seen as potential political risk due to possible unrest, demands for rights and representation
Some Gulf states have taken measures to limit influx and dependence on migrant workers (, quotas)
Labor reform in Gulf states
Challenges in reforming labor markets and reducing dependence on migrant workers
Gulf states heavily reliant on migrant labor for economic activities and development
Reforming system may disrupt key sectors and require significant structural changes
Business interests and employers benefit from current system, may resist reforms (increased labor costs, reduced control)
Opportunities for improving working conditions and rights of migrant workers
Reforming to reduce exploitation and grant workers more freedom (ability to change jobs, exit country)
Ensuring better , access to justice, and enforcement of existing regulations
Encouraging nationalization of workforce to reduce reliance on migrant labor
Investing in education and training programs to develop skills of national workers
Providing incentives and support for nationals to work in private sector (wage subsidies, job placement)
Enhancing international reputation and attractiveness through labor market reforms
Improving labor conditions and rights can boost global image of Gulf states
Attract foreign investment, support economic diversification, and align with international standards (ILO conventions)