Partners in progress

WHEN visiting the Gulf, a traveller, Peter Lienhardt, wrote: "Most Kuwaitis I talked to about the immigrants...assumed they would soon be on their way. The labourers would have to return home once the construction work was finished, while young Kuwaitis now at school or in universities abroad would soon be able to take over the work of the better educated...it would not be many years before most of the population would again consist of Kuwaitis."

By Nitin Gogia

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Published: Mon 17 Apr 2006, 10:46 AM

Last updated: Sat 4 Apr 2015, 5:34 PM

The ideas expressed seem unremarkable —until one realises that the words were written about a trip made some 50 years ago.

Expatriates are clearly not likely to vanish from the Gulf Cooperation Council countries in the near future. Indeed, the 12.5 million of them constitute 70 per cent of the bloc’s labour force. Many governments in the region worry about their numbers, and have taken steps to limit and diversify expatriate populations. However, they also know that the presence of foreign workers is necessary if they are to develop their economies and give opportunities to their own nationals. Countries in the region are therefore looking to maximise their future potential for growth without drastically upsetting existing structures.

One solution would be to offer all expatriates who have stayed in the GCC countries for over 15 years the right to permanent residency, subject to certain conditions being fulfilled. The expatriates in question should, for instance, hold university degrees, have certain minimum savings, and have no criminal record.

One of the Gulf countries’ main concerns is the volume of remittances expatriates send to their home countries. Between 1993 and 2002, for instance, expatriates sent a staggering $240 billion to their home countries —nine per cent of the combined GDPs of the GCC countries over that period. Taxing currency outflows would not only add to inflationary pressures, but shatter the GCC countries’ reputations as free economies, thereby frightening investors. It would therefore be infinitely preferable for expatriates to invest of their own accord, something that they are far more likely to do if given permanent residency.

The reasons for this are twofold. First, many expatriates come to the GCC with a simple goal in mind —they wish to save up enough money to be able to build and furnish a comfortable house in their home country, before retiring or returning. Needless to say, their savings are far more likely to remain in the region if they were allowed to retire in the GCC countries.

Second, because they plan to leave the Gulf at the end of their working lives, many expatriates don’t feel that they have a direct stake in the region, and thus don’t feel motivated to invest in its future. Such an investment need not be purely financial in nature —expatriates would be more willing to do everything from training nationals to organising environmental clean-ups if they could see how their contribution would better their own future as well.

Bahrain has already led the way in this respect. It offers long-term residency and self-sponsorship to expatriates who have worked in the region for 15 years and wish to retire. However, such residents are not allowed to take on jobs. The Gulf countries could greatly benefit if Long-Term Residents were given certain new privileges:

First, a system could be set up allowing LTRs visa-free travel in the GCC countries. This would help boost trade and tourism inside the bloc. It would also encourage entrepreneurs to look for opportunities outside the country in which they are based. They would have the added advantage of being familiar with norms of the region and having contact networks.

Second, LTRs could be given a more privileged position than outside investors in the region’s stock markets. For instance, existing rules regulating what percentage of companies can be owned by non-nationals could be loosened to take into account their special status.

Third, LTRs could be allowed to personally sponsor a limited number of visit visas every year, in order that they can meet extended family members. It should be kept in mind that it is better for the Gulf economies to have visitors come in than for expatriates to travel abroad to meet relatives. For similar reasons, LTRs could also be allowed to sponsor their parents’ residence visas if the latter have retired, regardless of whether any family support system is in place for them in their home countries.

Fourth, LTRs could be given increased mobility in the local economy. They could also be allowed to switch jobs without visa bans from their initial employers. This would increase the competitiveness of local companies without any substantial detriment to them, as the workers would have been at their companies long enough to offset the costs of any visa fees. LTRs, who have lost their jobs, could also be allowed to stay in the region for six months to look for new ones if they can prove that they have sufficient savings to support themselves. This would allow for greater flexibility in the local labour market, and ensure that the benefits of their experience in the region are not lost unnecessarily.

Fifth, LTRs could be allowed to set up their own businesses without local sponsors on the condition that a certain percentage of their employees were nationals. The single sponsor of a business —often a sleeping partner —would then be replaced by several qualified employees. This would greatly increase the private sector job opportunities available to GCC nationals and, again, improve competitiveness in the economy.

Sixth, expatriate children who have studied in the Gulf for at least 10 years, or who have obtained university degrees in the Gulf, could be allowed the benefits of more lax visa regulations. For instance, if students who are financially capable of supporting themselves are given six months to look for jobs after graduating, they would be more likely to choose to study in the region. The advantages of this would be twofold. First, each of them would spend tens of thousands more dollars in the Gulf economies while studying, instead of having this money diverted abroad. Second, the rapidly growing Gulf economies will have access to a large pool of prospective workers who are already familiar with local conditions and market demands, and will not need to import and train them.

The GCC countries could thus benefit greatly by tapping into the skills and resources of expatriates already residing within their borders. Given how small changes could harness the potential of so many people, the interests of the GCC countries would be better served by encouraging those already on their shores to work more closely with them for their mutual benefit.

Nitin Gogia is an assistant researcher at the Gulf Research Center in Dubai


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