Daily Management Review

Persian Gulf Authorities Are Trying to Get Rid of Cushy Jobs


Falling oil prices dramatically reduced budget revenues of export-dependent countries of the Persian Gulf. This caused authorities to do reduction of civil servants, many of whom are called "people on the couch."

Tribes of the World via flickr
Tribes of the World via flickr
Service in state institutions and companies in the region have long been considered as one of the most attractive activities: it is often a cushy job at decent wage. Number of employees often exceed amount of work to be done, because of what wage funds of such organizations are inflated, and offices are filled with people (mostly men), many of whom spend their time hanging out at the office or lounging on the couch.

An advisor, working with several ministries in Saudi Arabia, describes a typical picture: every day, receptionists see dozens of young Saudis without clear responsibilities, carrying documents from one office to another. According to a former employee of the state body in the UAE, the workers are mainly engaged in watching television or sleeping.

Even the IMF drew attention on the issue. Taking into account the growing fiscal problems, the Gulf countries need to make a sustained effort to encourage people to seek work in the private sector, and companies - to hire them," said IMF Managing Director Christine Lagarde on Sunday in Doha, the Qatari capital, after meeting local leaders of central banks and finance ministries.

Revenues in Kuwait declined by 60% due to the fall in oil prices, said the ruler of the country, Sheikh Sabah Al-Ahmad Al-Sabah on Oct. 27. Speaking before the National Assembly, he called for urgent measures to reduce public spending and correct the "flaws of the national economy." A month earlier, the Bahraini authorities have informed a merger of several ministries and government agencies to save money and improve efficiency. Prime Minister Khalifa bin Salman Al Khalifa said that this decision was made in order "to deal with the economic problems", and warned of the possibility of further consolidation of state authorities. However, he did not talk specifically about the job cuts - this is a politically sensitive issue in many countries. Rising unemployment, especially among young people, has become one of the factors that provoked the "Arab Spring" in 2011. After these events, the governments of the Gulf have spent billions of dollars on the financial support of the population, including increasing the salaries of civil servants in order to prevent a recurrence of protests.

Migrants from Asia mostly occupy blue-collar jobs in the region. Some countries have introduced a kind of program of import substitution in the labor market, providing quotas for replacement of foreigners by nationals. However, their implementation is stalled because many locals refuse to engage in heavy work or any work in this sector do not exceed the salaries of civil servants.

 Encouraging the private sector, the development of which would help to diversify the oil-dependent economy, went sluggish in the period of high oil prices. Now the authorities have dug in the matter. In the last couple of years, Emirates of Dubai and Abu Dhabi have created funds to support start-ups. The authorities did not respond to requests on information about how many companies asked them for help.

According to the Kuwaiti statistics, civil servants make up 84% of the employed population, and this situation is typical for the region. Meanwhile, in the countries of the Organization for Economic Cooperation and Development, the figure, on average, is about 21% (although the definition of the public sector in the Persian Gulf and the OECD is different). The state guarantees of employment also keep employees from leaving to the private sector; only 0.1% of the Kuwaiti population are self-employed. "The main problem here is mentality: 95% of young Kuwaitis believe that it is safer to build a career in the civil service," - said Mr. al-Neda Dehaene, advising local startups.

source: wsj.com