Browse

You are looking at 1 - 10 of 134 items for :

Clear All
Mr. Raphael A Espinoza, Ms. Ghada Fayad, and Mr. Ananthakrishnan Prasad

Abstract

The countries of the Gulf Cooperation Council (GCC) have gone through considerable changes in the last decade, spurred by high oil prices and ambitious diversification plans.1 The changes have affected literally all sectors of the economy. Large-scale immigration has provided the labor force while capital inflows and financial development have leveraged oil wealth to finance diversification. Regional integration plans are advancing although it is not clear yet what the prospects are for monetary union.

Mr. Raphael A Espinoza, Ms. Ghada Fayad, and Mr. Ananthakrishnan Prasad

Abstract

The member countries of the GCC have changed considerably over the last thirty years. The fast development of the region has spurred the creation of new cities, the development of infrastructure, and the expansion of new industries that have attracted capital and a new labor force from around the world. The growth of these economies has been considerably higher than that of advanced economies or other oil exporters as the size of the GCC economies has more than doubled since 1986 (see Table 2.1). However, economic development has been accompanied by very large inflows of foreign workers and the population has increased by more than 80 percent in the GCC (with the exception of Kuwait). As a result, real Gross Domestic Product (GDP) per worker, a measure used to assess the improvements in worker productivity, has declined in Bahrain, Kuwait, and the UAE and improved at very low rates in Saudi Arabia, Oman, and Qatar (last column of Table 2.1).

Mr. Raphael A Espinoza, Ms. Ghada Fayad, and Mr. Ananthakrishnan Prasad

Abstract

The dominance of foreigners in the labor force of the GCC countries is a very peculiar characteristic of these economies and one that has many macroeconomic consequences. Migration in the region has been steadily increasing, reaching extreme levels recently with non-nationals constituting over 90 percent of the labor force in Qatar and the UAE in 2011, 50 percent of the labor force in Saudi Arabia in 2009, and 77 percent of total employment in Bahrain in 2010. Recent efforts to “nationalize” the labor force aimed at limiting the supply of foreign workers and increasing the demand for national labor in the private sector. Nevertheless, by 2010 the GCC was the third region of immigration in the world after North America and the EU, this remaining true despite a shortage of statistics about, and hence likely underestimation of, migrants in this region.1

Mr. Raphael A Espinoza, Ms. Ghada Fayad, and Mr. Ananthakrishnan Prasad

Abstract

The activities of the government have a heightened importance in the Gulf countries because oil revenues accrue to the government and the way they are spent or saved affects the whole economy. Parts of the receipts from oil exports are saved in sovereign wealth funds or central bank reserves, and the remainder is spent and therefore channeled to the economy via a large public-sector wage bill, via public infrastructure, subsidies for industries, and subsidies and provision of services for nationals. The diversification process has also required large amounts of government money as structural and development policies remained based on government intervention. Thus, the overall bill for the public sector is high, between 36 percent and 74 of the economy (excluding the oil sector; see Table 5.2 in Chapter 5) and above what is common for either emerging or advanced economies.