After working for more than 15 years as a legal advisor at a private firm in Kuwait, Egyptian Hassan Ebrahim has recently returned home. “I had no other choice other than having my salary cut by up to 40 percent, which I found too much,” said the father of four. “I decided to leave after securing all my financial rights and return to my family especially as the economic damage caused by the coronavirus has left no sector intact,” the 58-year-old Egyptian added. “The virus is radically impacting expats in the Gulf.”
Ebrahim is among tens of thousands of foreign workers who have left the Gulf countries permanently for home countries as some Gulf states revive plans to replace foreigners with nationals in the labor market.
As many as 11,921 expatriates have left Kuwait, mainly for Egypt and India, in just two days this week aboard a flurry of repatriation flights. In a similar vein, over 7,300 Filipinos from the UAE have flown home since April.
Foreign nationals make up the majority of the population in the GCC countries mainly in Kuwait, Qatar, Bahrain and the UAE, according to the International Labour Organisation (ILO). In Saudi Arabia, the biggest Gulf country, foreigners account for about 10.5 million of the country’s overall 34.8 million population. Expatriates in the GCC states account for over 10 percent of all migrants globally, while Saudi Arabia and the UAE host respectively the third and fifth largest migrant populations in the world, the ILO says. Migrant workers have long been part and parcel of the Gulf and its vibrant economies.
But, over the past few months, tens of thousands of migrant workers have left or applied for repatriation from the Gulf countries aboard emergency flights launched with regular air travel being halted as part of precautions to curb the spread of the highly infectious disease. The majority of returnees are Indians, Pakistanis, Egyptians and Filipinos, who form the largest foreign communities in the Arabian Gulf.
The expatriates’ exodus could result in a fall of around 13 percent in employment in the Gulf, according to recent research by Oxford Economics. The drop could include the loss of nearly 1.7 million jobs in Saudi Arabia, the report said.
“Dependence on expat workers in vulnerable sectors means the burden of job losses will fall on the expat population,” Scott Livermore, chief economist at Oxford Economics Middle East, said. “Combined with visas depending on employment and lack of a social safety net, an expat exodus is likely as travel restrictions are eased. This could result in the population declining by between 4% in Saudi Arabia and Oman, and around 10% in Qatar,” he added.
Expats in Saudi Arabia will most likely feel the economic fallout from the COVID outbreak. A many as 1.2 million foreign workers could leave Saudi Arabia this year, according to a report from Jadwa Investment Company.
Foreign employees in hospitality, food services, administrative and support activities, travel agencies, security and building services, will be among those in the frontline to lose jobs, the report predicts.
Austerity package in Saudi Arabia
Last month, Saudi Arabia, the top global oil exporter, announced an austerity package due to the economic and financial impact of the coronavirus. The austerity measures included tripling the value-added tax and halting the cost-of-living allowance offered to government employees.
The kingdom has allowed private sector businesses maximum cuts of 40 percent in salaries and even to terminate employment contracts to help mitigate the economic impact of COVID, but has made the procedures hinge on strict steps to be followed by employers. Foreign workers will likely bear the brunt, though.
From Kuwait, Qatar to Bahrain, there have been reports about layoffs, mainly among expatriates. Last month, Kuwaiti media reported about terminating the service of about 50 percent of the country’s foreign municipality workers amid increased calls for reducing the numbers of expatriates in order to redress the demographic imbalance in Kuwait.
Foreigners account for nearly 3.4 million of Kuwait’s 4.8 million population. In recent weeks, several Kuwaiti public figures have demanded to curtail numbers of expatriates, mainly the unskilled labour, in the country, accusing them of straining the country’s health facilities and increasing the COVID-19 threat. Kuwait said this month it would no longer employ expatriates in its oil sector.
Quota system proposed in Kuwait
Last month, a number of Kuwaiti lawmakers tabled a draft bill suggesting a quota system for employing foreigners as one way to redress the demographic imbalance in the country.
According to the proposed quota system, the numbers of Indian workers should not exceed 15 percent of the overall Kuwaiti population while those of Egyptian expatriates should stand at a maximum 10 percent. Indians and Egyptians are among the largest foreign communities in Kuwait.
The authors of the draft said that the demographic imbalance in Kuwait has spawned problems in recent years, becoming more conspicuous and serious since the virus outbreak. In April, the Kuwaiti government announced a pardon plan for illegal migrants in the country to encourage them to depart. The pardon offers the illegals exemption from punishment and free home return flights. Thousands have reportedly applied to be covered by the amnesty and ensuing repatriation.
About 80 percent of an estimated 26,500 foreign illegals, mainly Indians and Egyptians, have already left Kuwait, taking advantage of the pardon scheme.
Migrant protests in Qatar
In Qatar, where expatriates account for 2.3 million of the emirate’s total population of 2.7 million, the COVID-19 outbreak has come to compound the economic impact of a three-year boycott by a Saudi-led quartet. Qatar has recently seen migrant protests against overdue wages. The virus spread in the country has triggered economic repercussions that have hit the emirate’s migrant community. Thousands of laborers have become jobless, with some forced to beg for food, according to media reports.
Bahrain’s trade union federation has, meanwhile, sounded the alarm over increasing layoffs due to the economic aftermath of COVID-19. More than half of Bahrain’s population of 1.7 million are foreigners. The General Federation for Bahrain’s Trade Unions said this week that it received complaints from Bahraini and foreign employees set to lose their jobs with a government support package due to expire later this month. “The companies may embark on a wave of mass layoffs after the end of the support period,” the federation warned, according to the Bahraini newspaper Al Bilad.
Stimulus package in Bahrain
The Bahraini government unveiled a $11 billion stimulus package to aid the private sector is grappling with the fallout from the COVID-19.
Thirty-five members of the 40-strong Bahraini parliament this week called for extending the package until the end of September in an attempt to stabilize the labor market and head off mass layoffs.
But for Egyptian Ebrahim, such steps will primarily come to the aid of national workers. “As for expats, their good old days in the Gulf are coming to an end,” he said. “They are mainly the ones paying the economic bill of the corona.”