- Expatriates will continue to dominate private sector employment.
- Citizens give up many professions due to low wages and working conditions.
- Consumer demand will recover next year with the return of population growth.
Kuwait City, Sep 19: The Economist Intelligence Unit of the British Economist magazine stated that the reluctance of Kuwaiti citizens to participate in the labor force is a problem that outweighs the problem of unemployment, which rose slightly among Kuwaitis to 7.2 percent in the first half of 2021.
In its report, the unit noted a decline in the number of Kuwaitis working in the private sector by 1.5 percent, stressing that it is evidence that the government has so far failed to achieve any significant success in increasing Kuwaiti employment in that sector.
They expected population growth to return next year with the impact of the pandemic on job opportunities receding, which will lead to a recovery in consumer demand, but economic imperatives and government policy deficits mean that foreign workers will continue to dominate employment in the private sector.
On the other hand, “The Economist” reported that the population of Kuwait shrank by 0.9 percent to reach 4.63 million in the first half of 2021, with the net number of departing expatriates continuing to exceed the net number of births in the country, according to official data of the Public Authority for Civil Information published by the company Al Shall Economic Consulting in early September.
They added that the percentage of Kuwaitis in the labor force rose slightly to 16.3 percent at the end of last June, noting that 80 percent of these are public sector workers, pointing out that the departure of 56 thousand expatriates followed the departure of 120 thousand in 2020 (when it contracted The total population (2.2 percent) was primarily a result of the Corona pandemic.
Endeavors and challenges
The Economist indicated that there are expectations that the number of expatriate workers in Kuwait will begin to increase with the easing of residency restrictions in light of the modest economic recovery, but it ruled out that the number of foreign workers will return to its pre-pandemic levels when foreigners made up about 79 percent of the total number of foreign workers. Population, indicating that the current data highlights the challenges the government is facing in its endeavors to replace the foreign labor force in the private sector.
They pointed out that the lack of financial sustainability in the current situation, where public sector salaries absorb most of the state budget, was apparent in 2020, with the collapse in oil income, which led to a fiscal deficit equivalent to 39 percent of GDP, and by the end of last June, the percentage of workers in the government accounts for about 17 percent of the workforce of 2.8 million, noting that some politicians suggested using blunt means to regulate the supply of labor, such as setting a “quota” for nationalities and controversial measures such as preventing the renewal of residency for those over the age of sixty without a university degree holders, However, the reluctance of citizens to work in many professions in the private sector due to low wages and working conditions means that such measures will hinder the growth of the non-oil economy, which prompted the executive authority to resist these initiatives.