The Gulf Will Always Need Migrants

Forecast

• Slumping remittances sent by migrant workers in the Persian Gulf to their homes in the developing world will rebound when oil markets stabilize and Gulf diversification plans pan out.
• But to appease and employ their growing local populations, Gulf states will edge out some white-collar expatriates in favor of citizens.
• Since the burden of new taxes will fall on foreign workers, Gulf states will have to rely on public relations to maintain migrant flows.

Analysis

Oil is the foundation of the Persian Gulf’s wealth. But the recent collapse in oil prices has made the six members of the Gulf Cooperation Council painfully aware of the risks of relying on such a volatile commodity. Now, Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the United Arab Emirates are working to leverage their existing wealth to diversify their economic bases — an effort requiring painful measures that risk upsetting the existing political order, as has already been seen in Kuwait’s nascent wage reforms. The coming transition will also take more labor, since workers will be needed for massive infrastructure and construction projects and to staff growing tourism, financial and retail sectors. Yet historically, Gulf state residents have been uninterested in working in the private sector; instead, they prefer the more lucrative public sector jobs.

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