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SUMMARY:George Naufal on the Economics of GCC Migration
DESCRIPTION:George Naufal\, Assistant Professor of Economics at the American University of Sharjah and a ‎research fellow at the Institute for the Study of Labor (IZA)\, delivered a CIRS Monthly ‎Dialogue lecture titled\, “The Economics of Migration in the Gulf Cooperation Council ‎Countries” on September 9\, 2013. The lecture mapped the history of non-Gulf Cooperation Council (GCC) Arab workers ‎migrating to GCC states\, and explained how and why there were ‎such dramatic changes to these migration patterns since the 1970s. \n \n \nNaufal elaborated upon the history of labor migration to the GCC states in order to explain why ‎these countries became a uniquely attractive destination for large numbers of foreign laborers. The ‎chief factor turning the region into a hub of temporary economic migration was the discovery of ‎large oil and natural gas reserves in the early twentieth century. Decades after the discovery of ‎hydrocarbon reserves\, during the time of the oil embargo of the 1970s\, Naufal explained that ‎‎“the GCC countries—Saudi Arabia first—received the largest transfer of wealth in human ‎history.” Because the local populations were small in number and inexperienced\, there was a dire ‎need to import foreign labor in order to fully exploit the nascent industry. Naufal recounted that ‎‎“in 1981\, when the GCC was formed\, the population was around 15 million” people living on a ‎relatively vast amount of land. As the growth of the hydrocarbon industry accelerated\, this in ‎turn led to increased economic growth and related development projects\, which required even ‎more labor power. “The ultimate goal was to develop and develop fast\, and the best way to do so ‎is to bring labor\,” he added. ‎ \n \n \nOwing to geographical proximity as well as shared language\, culture\, and religion\, “it was the ‎non-GCC Arabs who came first in the ‘70s and the ‘80s” as migrant workers to the GCC states. ‎However\, this influx was gradually capped in the mid-1980s when GCC governments realized that ‎the Arab migrant workers posed a disruptive threat by introducing their own domestic religious ‎and political ideologies\, which were not always welcome in the region. Naufal cited the first Gulf war as ‎‎“a structural break in the nationality\, or the source of workers\,” to the GCC. During this time\, ‎citizens of Middle East countries that supported Iraq were deported en mass from GCC states. ‎ \n \n \nThe large numbers of non-GCC Arab migrant laborers were replaced with Asian and South Asian ‎workers. Naufal argued that “the estimates put the non-GCC Arabs in the ‘70s to be around 70 ‎percent of the labor force and the Asians less than 20 percent.” These figures were almost exactly ‎reversed in 2005. GCC policymakers found that the Asian workers were economically beneficial ‎as they would work more for less pay\, and there was also less chance that they would be ‎politically\, religiously\, or ideologically influential. ‎ \n \n \nThe determinants of migration to the Gulf are the results of push and pull factors that are ‎international and domestic according to the needs of both the sending and receiving countries. ‎On their part\, South Asian and South East Asian laborers traveled to the GCC to escape ‎unemployment and poor standards of living in their home countries. “In comparison\, in 2010\, the ‎standard of living in Qatar\, measured by income per capita\, was 23 times that of Sri Lanka\, 35 ‎times that of Yemen\, 50 times that of Sudan\, and 70 times that of Bangladesh.” Naufal noted ‎that these macro-economic measurements translate on a micro personal level: “if you were an ‎Egyptian farmer in the ‘70s\, and you came to Saudi Arabia\, you made 30 times your salary. In ‎the 80s\, if you were a school teacher in Egypt\, you made 20 times your salary. In the 90s\, if you ‎were a Jordanian engineer\, you tripled your income by moving to Kuwait.” ‎ \n \n \nNaufal also explored the remittances phenomenon from the Gulf\, which “are much less volatile ‎and much more stable than foreign direct investment and foreign aid.” During the global ‎economic crisis\, remittances from the GCC remained strong\, “basically\, one fourth or one fifth of ‎remittances in the world comes from the GCC\,” he added. Pointing out the direct correlation ‎between GCC labor policies and the growth and development of labor sending countries that ‎receive direct remitted capital\, Naufal commented that Middle East countries have thus missed ‎out on potential investments and wealth that has been redirected to Asian countries. ‎ \n \n \nSimilarly\, he noted the direct correlation between geopolitical events and GCC labor policies. ‎Because of the volatility of many Middle East countries\, the GCC states are especially attractive ‎as a migration destination to the populations of neighboring Arab countries. Naufal argued that ‎‎“since World War II\, before the Arab Spring\, up until 2010\, the Middle East has had 28 serious ‎conflicts.” Conflicts result in high unemployment rates and a lack of job opportunities\, which for ‎a large youthful population spell serious future challenges. To this end\, he proposed that GCC ‎labor policies could have partially alleviated some of the employment stresses that resulted in the ‎Arab uprisings. ‎ \n \n \nIn conclusion\, Naufal noted the future challenges to the GCC labor market. “The GCC countries ‎were able to create\, in the last ten years\, 7 million jobs—that’s almost one million jobs a year\,” he ‎said. However\, job creation matters less than ensuring that the local population enters fully into ‎the labor market. Currently\, unemployment rates are extremely high for local GCC populations ‎who either refuse unattractive jobs\, or cannot compete with more experienced foreign workers. ‎‎“Countries in the Gulf have to think about what will happen to the price of oil and if at some ‎point they will be able to balance their budget\,” Naufal commented. In order to offset these ‎worries\, some GCC governments have begun diversifying their economies and investing heavily ‎in education to give the local populations a competitive advantage in any future labor market. ‎ \n \n \nGeorge Naufal has a Ph.D. in Economics from Texas A&M University. His primary research ‎includes migration and its consequences\, mainly the impact of remittances on the remitting ‎countries. Naufal’s research has focused mostly on the Middle East and North Africa region with ‎an emphasis on the Gulf countries. He is the co-author of Expats and the Labor Force: The Story ‎of the Gulf Cooperation Council Countries (Palgrave Macmillan\, 2012). His work has been cited ‎by regional and international media outlets including The National\, Gulf News\, and the New York ‎Times. Professor Naufal has served as a consultant on issues related to the Middle East. \n \n \n  \n \n \nArticle by Suzi Mirgani\, Manager and Editor for CIRS Publications.
URL:https://cirs.qatar.georgetown.edu/event/george-naufal-economics-gcc-migration/
CATEGORIES:Dialogue Series,Distingushed Lectures,Race & Society,Regional Studies
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