Mass layoffs are dangerous ... and UAE companies are most dependent on expatriates from Qatar in Kuwait.
The "Bloomberg" agency explained that the shock of the oil price collapse, along with the Corona epidemic, is forcing the Gulf states to rethink their policies towards the expatriates, who make up most of the workforce in the private sector.
The agency noted in a report that the deepest recession in the world since 1930 has threatened millions of jobs occupied by expatriates in the region, which cost $ 1.6 trillion of the total cost of jobs in the Gulf economy, which will harm the situation of expatriates, especially in the ability to open an account A banker, renting an apartment, or obtaining a phone line, as all of this often requires the employer's permission, and almost all foreign workers do not have a clear path to obtain permanent residency or citizenship.
For its part, Karen Young, a researcher at the American Enterprise Institute in Washington, explained that mass layoffs pose a great danger, especially in countries such as the UAE and Qatar, where the entire local economy in the services sector depends on the consumption of expatriates.
Young explained that how to deal with expatriates in terms of their exit time, or try to renew contracts, or obtain end-of-service payments, will determine the future attractiveness of the labor market, especially for higher-paying jobs.
According to data released in 2017, the private sector in the UAE is the most dependent on expatriate workers in the region, followed by Qatar, then Kuwait, Bahrain, Oman and Saudi Arabia.
According to "Bloomberg", the Gulf economies benefited from their oil wealth to inflate their population with foreign workers, and to build active consumer societies, indicating that for many expatriates, the shift towards the Middle East region has become an unprofitable project with the prospects of achieving this fading amid the crisis in the budgets of the countries of the region , Closing most shops, suspending travel and postponing construction.
For his part, Ziad Daoud, chief economist for the Middle East in the Bloomberg Agency, stressed the importance of the aim of policymakers to prevent companies from collapsing due to the implications of Corona and protecting workers in the most affected sectors, pointing out that the tool to achieve this must be centered through Public spending, not lending programs, noting that no country wants to get out of this crisis by losing airlines, transportation, hospitality, and operating services, and no country will be better off after migrant workers migrate.
According to "Bloomberg," even as the Gulf states put tens of billions of dollars in stimulus measures aimed at helping companies and banks survive the slowdown, most of the initiatives target employers and not workers, indicating that workers who receive low salaries will have difficulty in covering their expenses.