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The "Arab Spring" and the GCC labor markets | The Gulf Cooperation Council States (GCC) |

The "Arab Spring" and the GCC labor markets

Onn Winckler

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The onset of the “Arab Spring” and its spread to the Gulf in early 2011, mainly to Bahrain and Oman, led the GCC authorities practically, although not officially, to withdraw from their previous labor force nationalization policies. Instead, they decided to concentrate on reducing the unemployment of their educated youth and improving the living standard of the nationals.

On March 18, 2011, Saudi King ‘Abdulla announced the implementation of new socioeconomic reforms which mainly include: immediate payment of two months’ salary to all governmental employees as compensation for the rise in living costs; monthly payment of SR2,000 as an unemployment allowance; setting a minimum wage of SR3,000 for all governmental employees; and adding 60,000 positions in the Interior Ministry (de Kerros, 2011; IMF, 2011:11; MEED, 10-16 February 2012:33). However, raising public sector salaries and generous unemployment allowances, as noted by the IMF (2011:19) “[…] provide a disincentive for nationals to seek private sector employment.”

In general, the Saudi “rentier-reaction” to the risk of spreading the Shi‘i uprising which occurred in Bahrain to the Saudi Kingdom amounted to $129 billion (Gray, 2011:22). The Omani authorities also reacted with a massive increase in governmental expenditures, mainly by raising the minimum wage from $364 to $520 for the 150,000 public sector employees (MEED, 2011 Economic Review:12; MEES, 16 January 2012:20-21). The reaction of the other four GCC authorities to the “Arab Spring” was quite similar and concentrated mainly on: improving living standards, increasing public sector wages and reducing unemployment among youths through massive absorption into the public sectors. Thus, to a great extent, the “Arab Spring” altered the former policy of steadily narrowing the “rentier umbrella” to the indigenous population due to the fear of an uprising on socioeconomic grounds.

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Onn Winckler is professor at the Department of Middle Eastern History, University of Haifa. His major fields of academic research are political demography and economic history of the modern Middle East.
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