Only 12000 Qataris working in private sector: IMF

(MENAFN- The Peninsula)

By Satish Kanady

DOHA: Qatar’s ratio of nationals to expats in private sector jobs is markedly lower than other GCC nations. Saudi Arabia’s nationals have a larger share of private employment than in the other GCC countries.

An IMF working paper which focuses on private sector employment for nationals and expatriates in the GCC region released yesterday noted that the ratio of nationals to expatriates in the private sector is less than 1-to-5 in the region. “Saudi Arabia’s nationals constitute a larger share of private employment than in the other GCC countries. Qatar’s share is strikingly low and Kuwait’s is almost as low despite a recent rise. The growth rates of expatriates exceeded the nationals in three out of the five countries and overall”.

Data sourced from five GCC countries (UAE not covered) shows as of 2014 total number of Qataris employed in the country’s private sector is a little more than 12000 the lowest in the region. Kuwait with 91000 nationals has the second lowest representation in the private sector followed by Bahrain and Oman. With a total of 1656000 Saudi has the biggest national presence in its private sector workforce.

However between 2006 and 2014 the Qatari representation in the private sector jobs grew by 248 percent the highest in the region.

The IMF data suggests that nationals in private sector across the region represent just 12 percent of the total workforce where as expatriates account for 62 percent. Nationals in public sector account for 22 percent and expatriates represent 4 percent in this sector.

Recent trends point to a large number of nationals entering the labor force in coming years. At the same time fiscal positions have been aggravated by the fall in the oil price by half thus reducing the potential for public sector hiring to continue at its recent pace.

Labour force projections indicate an aggregate GCC growth rate of almost 4.5 percent per year or 2 million labour market entrants between 2014 and 2020.

Based on these projections the number of private sector jobs would be only one-third of the entrants.

According to the research note the GCC’s public sector hiring an estimated 4.5 percent per annum would create 1.2 million public sector jobs by 2020. This would leave the share of nationals’ private-sector employment in nationals’ total employment below 35 percent and barely unchanged from 2006.

Moreover another 175000 people would be unemployed.

The recent fast pace of public hiring is not fiscally sustainable. Having been a feature of GCC economies since the 1970s public employment rose following events associated with the 2011 Arab Spring in neighbouring countries. Together with pay increases the hiring burst inflated GCC public-sector wage bills to around 10percent of GDP in 2014. Indeed as shown in most GCC country staff reports and in IMF GCC spending was well above optimal levels despite the large fiscal surpluses enjoyed by most of its members when oil prices averaged about $100 per barrel in 2011- 2014.

With the sharp fall in oil prices in late 2014 and early 2015 fiscal positions have weakened and addressing the jobs shortfall through public hiring is therefore not feasible the report noted.

THE PENINSULA