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Volume :6 Issue : 23 1980      Add To Cart                                                                    Download


Auther : By: May Ziwar Daftari


The oil rich Gulf States form a unique pattern in the process of development generated by an unusual factor endowment.

Contrary to most of the developing countries, these States have experienced an erratic rise in their financial capital alongside a small labour force restricted by the paucity of their populations. Their potential in agriculture is meager due to aridity of land and scarcity of water. Whilst technology is relatively easier to import, facilitated by the rising oil revenues in these States, the existing constraints to technological adaptation is common to developing countries in general.

The exorbitant rise in oil revenues, since 1973, and the subsequent investment in infrastructural and industrial development are increasing the demand for labour. Consequently, the rise in returns to labour alongside a relatively in-elastic indigenous labour-supply are inducing further the influx of immigrants. Expatriates form significantly a larger share of the total labour force, e.g. 70 percent in Kuwait and 80 percent in Qatar, approximately. Both Kuwait and Qatar, with different degrees of development, share similar basic manpower problems which are becoming more acute with the growing need for the development of alternative source of income to oil and the expansion of their economic base in order to sustain growth in the future. The core of the following discussion will be concentrated on the following discussion will be concentrated on analyzing two of the more crucial manpower problems.

    • The low participation rate of locals.
    • The lack of co-ordination between economic policy and the employment structure.

Employment figures and some tentative estimates for 1975 show that the local crude participation rate of the indigenous population is 19.5 percent and 18.4 percent in Kuwait and Qatar respectively, which is significantly low when compared to the I.L.O. average participation rate 40 percent for developing countries.

The demographic restrictions are obvious in these States, e.g. small and youthful populations. The size of the total population in 1975 is estimated to be around 180,000 in Qatar and 9994,837 in Kuwait, where locals comprise 67,850 in the former and 472,088 in the later. Moreover in both States over 40 percent of the population are under 15 years of age. On the other hand the existence of other more flexible constraints effecting the employment structure are also apparent; the low local female activity of indigenous female population (although less acute in Kuwait, yet not exceeding 3.2 percent) reflects the disutilization of a significant source of labour. Also the low share of locals in manual jobs illustrates the social distaste of locals to manual employment as well as the lack of effective incentive in the economic system.

Hence a potential does exist in increasing the pool of local labour by further investment in educational planning, encouraging female employment, and correcting locals’ attitude to manual employment.

Next, looking at the economic policies, especially those related to industrialization and enlarging the economic base, they do not altogether agree with the present sectoral distribution of labour. In general the sectoral distribution of labour tends to change with the degree of development. As growth takes place, the proportion of labour tends to fall in the primary, and rise in the secondary and tertiary sectors. Even though both States do not have a significant potential in agriculture, due to aridity of land and shortages in water supply, the employment figures in agriculture and fishing, of about 4.3 percent in Qatar and 2.5 percent in Kuwait, are considered very low, even when compared with comparative figures for the developed countries where they are usually low, averaging 7 to 8 percent.

In analyzing the share of employment in the secondary and tertiary sectors figures are more pessimistic from the viewpoint of co-ordination between the policy of industrialization and the structure of employment. The figures are relatively low in the first sector and unusually high in the later. The percentage of distribution of labour in the secondary sector tends to be low for both States, especially if we consider the production line workers which form from around 20 per cent in Kuwait and slightly higher in Qatar. What is of more significant is the domination of construction and manufacturing sectors by expatriates reaching over 90 percent in each of the two States.

The most alarming employment feature in these States is the enormous expansion of the tertiary sector. Total employment in this sector in 1975 is over 70 percent and 60 percent in Kuwait and Qatar respectively. The employment percentage is highest in services, e.g. 53.7 percent in Kuwait and around 40 percent in Qatar, with government and administrative jobs forming the largest share.

Hence percentages of the above magnitude compare with or even surpass counter figures in developed countries where they are usually highest.

From the above scenario we can conclude the following:

Firstly, that the existence of structural bottlenecks is constraining the optimum utilization of human resources, as well as the efficient application of economic policies proclaimed by these States.

Secondly, that there is an apparent danger arising from the continuity of the exorbitant expansion of employment in the Services sector, if permitted to increase, will most probably lead to further structural imbalances in the future, especially if oil is depleted before the enlarging of the economic base and the development of an alternative source of growth.

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