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 / Summer 2009 / Issue 55(originally published by Booz & Company)


The Challenges of Balance

But in many parts of the GCC, opportunities for women remain limited. Preferred jobs are often reserved for men, and in some countries, conservative social norms tend to discourage women from working outside the home. Furthermore, women’s ability to enter the labor market remains limited by the weakness of social services (such as transportation and child-care services) and support programs. Thus, for one or more generations, most women’s jobs will probably be concentrated in such service-sector professions as teaching and banking, with the policymakers aware that, over time, these roles will broaden.

The Gulf states are also addressing their labor shortages by investing in education that will match citizens’ capabilities with the needs of local industry. For example, Sheikha Mozah bint Nasser al-Missned, wife of the emir of Qatar, is leading a transformation of the country’s education system. In consultation with global experts, she changed the curricula at primary and secondary schools to give math, English, and science as much emphasis as Arabic and religion. And several Western university branch campuses, including those of Weill Cornell Medical College and Texas A&M University, are up and running in Qatar’s newly formed “Education City.”

Even as they pursue education reform within their borders, the GCC states continue to draw on the global talent pool — and thus feel continuing pressure to make it easier and more attractive for expatriates to work. And as they reshape their immigration, labor, and education systems, they must integrate a widely varied set of deadlines into their plans, because these systems operate under different time frames. It takes a very short time to change a visa policy, a few years to build a labor market, and a generation to educate a citizenry.

Open Nationalism
In office buildings in Dubai, construction sites in Kuwait City, and manufacturing plants in Jeddah, GCC nationals have been outnumbered by an influx of workers from India, Pakistan, Eritrea, Ethiopia, Bangladesh, Sri Lanka, the Philippines, the United Kingdom, Australia, and the United States. Expatriates outnumber nationals in most parts of the region by a ratio of three-to-one; they have made Gulf cities as ethnically diverse and cosmopolitan as any other cities in the world, and the region depends on them to sustain economic growth. They are needed to help manage companies and to work, but also to supplement nationals as the region’s consumers of goods and services.

Yet the GCC nations’ need to preserve their identity makes it difficult for them to fully integrate expatriates — even those who live for many years in the region and want to make it their home. It’s not surprising, then, that when the Gulf economies contract and work dries up, these transient workers simply pack their bags and leave. Even during these workers’ stay in the region, a substantial portion of their wages leaks out of the GCC’s economy as remittances to their countries of origin. If foreign workers lose their jobs, in some Gulf countries they also lose their work visas. Thus, the contraction that initially eliminated jobs is exacerbated as expatriates depart — reducing spending, creating housing vacancies, and lowering real estate prices.

To prevent or slow this type of downward spiral, several Gulf states are learning to integrate their expatriates and make them feel valued. Financial reforms are crucial: Expatriates cannot truly be tied to their new countries of residence unless they can invest there. Gulf states have instituted a number of new laws in response to this need. Real estate is one important segment. In 2002, Dubai removed restrictions that limited foreign ownership of property in some areas; for several years, foreigners have been allowed to own land anywhere in Bahrain. Abu Dhabi, Oman, and Qatar have introduced similar reforms.

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