Q & A – Zafiris Tzannatos

The GCC is failing to cultivate its greatest resource: its people

The nationalization of the private sector is at the center of the Gulf Cooperation Council governments’ employment policies. Executive asked Zafiris Tzannatos, advisor for the Arab states at the International Labour Organization (ILO), to discuss this endeavor.

E  Is the private sector in the GCC creating enough jobs?

Employment in the private sector in the GCC countries has been expanding much faster than the increase in the national labor force for many decades. In the mid 1970s there were 50 percent more national workers than migrant workers (1.7 million versus 1.1 million). Now there are no more than 6 million national workers compared to nearly 14 million migrant workers. This means that the number of migrant workers – mostly in the private sector – increased by 14 times in the last 35 years. 

E  Is the problem in the GCC one specifically of  youth unemployment?

The problem in the GCC is not confined to youth unemployment though it registers as such because older workers are gradually absorbed into the public sector. 

E  What are the socioeconomic risks of having a population that is reliant on foreign labor?

The proven outcome by now, has to do with the lack of diversification, as the economy is locked into a low productivity/low wage equilibrium. 

On the social side, given their expectation to get a job in the public sector, nationals under-invest in their education. Also, opportunities for women to work depend more crucially on education than for men. In some GCC countries, for every male university student there are three females. 

E  Is it important to tie the nationalization of the labor force with economic diversification?

Nationalization of labor is very important both for economic diversification and… changing the course of the economy from a rentier state to one based on legitimate profit seeking. For example, it may not be an exaggeration to say that if GCC countries had capital intensive techniques and knowledge-based economies, productivity and wages would increase, thus making jobs in the private sector more appealing to nationals.

E  How successful have investments in education been? 

Why should nationals spend time and effort to learn English or get accustomed to work in complex environments when jobs in the public sector are guaranteed as a right deriving from citizenry rather than from merit and hard work? The problem here lies more on the demand for education by nationals than on the supply of education – schools and universities. In this case offering a high quality education may resemble offering a luxurious meal to someone who already had his dinner.