Kuwait May Deport 360,000 As Gulf’s Expat Exodus Continues

Dominic Dudley Contributor
I write about business and politics in the Middle East and beyond

Workers in the Mahboula district of Kuwait City on their way to their jobs after the lifting of ... [+]

Kuwait is preparing to force as many as 360,000 foreign workers to leave the country, according to local press reports, in the latest sign of how the Gulf expatriate labor force is bearing the brunt of an economic slowdown caused by low oil prices and the coronavirus crisis.

According to the Kuwait Times, the government and parliament are getting close to an agreement on a plan “to drastically cut the number of expats in the country”. Those being targeted include many of the most vulnerable. The newspaper cited MP Osama Al-Shaheen, a member of the National Assembly’s Manpower Resources Development Committee, as saying those at risk of being deported include 90,000 marginal and poorly-educated laborers, 120,000 undocumented workers and 150,000 expats aged over 60, with the latter group including employees, dependents and those suffering from chronic diseases.

As yet there is no clear timetable for this exodus, but it could take several years. At the same time, the government is trying to reassure the country’s own citizens they will not suffer from the economic downturn. On Monday, Finance Minister Barrak Al-Sheetan told the official KUNA news agency the "government has not taken any decisions that impact the pockets of nationals, their salaries or their rights."

Coronavirus jobs crisis

As has been the case in countries around the world, the Gulf has suffered badly from the coronavirus pandemic, with businesses pulling down the shutters and sending their staff home.

The problems have been exacerbated by the collapse in oil revenues this year. But the unusual nature of Gulf societies means the pain has not been evenly distributed. While local citizens tend to be well protected from salary cuts or redundancies, the region’s large expat workforce has few defenses to a recession.

In the past, the oil-rich Gulf was a place where people from all over the world went to look for work, from low-paid laborers toiling in often unsafe conditions, to executives looking for a lifestyle unavailable back home.

Now the tables have turned. A combination of low oil revenues and the debilitating effects of the coronavirus lockdowns means a lot of jobs in the region have evaporated in the hot sun and many people are now leaving, some out of choice, others by compulsion.

In Saudi Arabia an estimated 300,000 have already left this year, according to local investment bank Jadwa Investment. That may just be the tip of the iceberg though. Jadwa says it expects around 1.2 million expat workers to leave the local labor market over the course of 2020.

Back in Kuwait, Prime Minister Sheikh Sabah Khaled Al-Hamad Al-Sabah said earlier this year he wanted to see the proportion of expatriates in his country drop from 70% to 30%, implying some 2.5 million people would have to leave.

That target may be unachievable but, even so, many are going. According to local media reports in Kuwait, some 110,000 expats left the country in a three month period from mid-March to mid-June, although some of those were visitors rather than migrant workers.

Events in Kuwait and Saudi Arabia are being echoed around the rest of the region. More than 113,000 foreigners have left Oman since the turn of the year, according to data from the country’s National Centre for Statistics and Information.

Overall, the country’s expat population has shrunk by 262,000 – more than 12% – since its peak in April 2017.

In Bahrain, there was a slight fall in expat workers between June 2018 and June 2019, with a 1% drop to 594,944 at the end of that period, according to the most recent data on the website of the country’s Labor Market Regulatory Authority.

Remodeling the labor market

As the figures from Bahrain and elsewhere suggest, the economic crises of this year have accelerated a trend which had been underway for some time, as governments have tried to encourage more local citizens into private sector jobs (where expats have generally worked) and away from the public sector.

That push has had limited success though. In Saudi Arabia, for example, unemployment among locals remains stuck at around 12% despite a decline in expat numbers in recent years.

Events this year mean the pace of expat departures is picking up around the region. What is not is clear is whether many of the people now leaving will come back if and when oil prices rebound and the coronavirus crisis abates. If not, that will leave the economies permanently smaller and with significant labor and skills gaps.

There are knock-on problems for other countries in the region and beyond too. Many of those leaving would have regularly sent money back to their home countries. Such remittances play a vital role in the economies of many poorer countries within the Middle East as well as Asia and Africa. As jobs have disappeared, so too have those cross-border payments.