30.11.2012 | Von:

Stages in GCC labor immigration patterns and policies

The unprecedented scale of development projects in the Gulf oil states following the October 1973 “oil boom” led to an extremely rapid increase in the demand for labor, both skilled and unskilled, that could not be supplied domestically.

The unprecedented scale of development projects in the Gulf oil states following the October 1973 “oil boom” led to an extremely rapid increase in the demand for labor, both skilled and unskilled, that could not be supplied domestically. This was due to the small national workforces as well as the inadequate professional levels of the indigenous workforces due to the inexistence of modern educational and professional training institutions. By 1975, the total national workforces of the six Gulf oil states amounted to only 1.36 million. Therefore, in order to confront these two basic limitations, the policy adopted by the authorities of the Gulf oil-states in the short-run was to import the needed labor while the policy adopted for the longer-run was comprised of two basic elements: implementation of an extreme pro-natalist policy in order to maintain high fertility rates and huge investments in education and vocational training in order to enhance the quality of the indigenous workforces.

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Fertility rates and natalist policies of the GCC oil-states

Following the October 1973 “oil boom,” the Gulf oil-states ruling families implemented the most extreme pro-natalist measures known worldwide, which included: the initiation of public housing projects; encouragement of early marriage through large marriage grants; full governmental subsidies for education; and generous child allowances. Although since the mid-1990s, Oman and Saudi Arabia have started withdrawing their previous pro-natalist policy, even in these countries the pro-natalist socioeconomic environment has basically remained in force. However, in recent years, in each of the GCC countries, even in those countries which continue to implement direct pro-natalist measures, such as Qatar and Kuwait, the total fertility rates among the indigenous women have rapidly declined to about 3.5 children per woman compared to 6 to 8 children in the 1970s and early 1980s. This decline is mainly attributed to the sharp improvements in the educational level of women, particularly the high percentage of Gulf women at the tertiary educational level. The most dramatic fertility decline has occurred in Oman where the rate was reduced from more than 7 children per woman in the 1970s and early 1980s to only 3.7 in 2010. In Saudi Arabia as well, fertility rates have sharply declined. Although the Saudi authorities do not publish fertility rates along with other related data, from what is available it appears that in 2007 the crude birth rate of the Saudi indigenous population was 25 per 1,000 people compared to almost 50 in the 1970s while the total fertility rate declined from 7.3 to 3.3 during the corresponding period (al-Najjar, 1993:212; Winckler, 2009:198-199; Fargues and Brouwer, 2012:238-240; Oman, MNE, SY-2011:table 6-2; KSA, CDSI, 2008; Shah, 2012:140). However, despite the sharp fertility decline, due to the current wide-based age pyramid, the GCC indigenous populations will continue to rapidly increase at least in the future two generations - a consequence of the “demographic momentum” phenomenon.*

*Demographic momentum phenomenon: Even though birth rates may decline to or even fall below the replacement level, the population may still continue to increase for several years before leveling off or decreasing because of the large cohorts that enter their reproductive years.

As a result, during the bonanza “oil decade” (1973-1982), the number of foreign labor in the Gulf oil-states rapidly increased, reaching 4.4 million in 1985. At that initial development stage, the extremely liberal labor immigration policy enabled the foreign labor, mainly Arabs at that time, to be accompanied by their family members. Therefore, already in 1975, almost 30% of the foreigners in these countries were accompanying family members of the foreign workers. Following the end of the “oil decade,” there was a sharp decline in oil revenues.[1] However, despite this development, the number of foreign labor continued to increase, albeit at a slower pace compared to that which prevailed during the “oil decade.” By 1985, the foreign labor in the GCC countries numbered 4.4 million and reached 5.2 million in mid-1990, while the overall number of foreigners amounted to 9.4 million.

The Iraqi invasion of Kuwait in August 1990 had the most important effect on the GCC migration trend following the October 1973 “oil boom.” As a result of the invasion, a large-scale departure from the GCC countries occurred, particularly from Kuwait and Saudi Arabia. However, following the liberation of Kuwait in February 1991, the number of foreign workers in each of the GCC countries rapidly increased, despite the prolonged low oil prices on the one hand, and the rapid increase of the indigenous workforces on the other. By 1999, foreign labor in the GCC countries numbered 7.1 million, an increase of 36.3% compared to their number in mid-1990.