JEDDAH: ARAB NEWS
Thursday 20 September 2012
Last Update 20 September 2012 3:41 am
The economic development programs in GCC countries succeeded in raising living standards but failed to create enough jobs to absorb the growing work force entering the labor market.
Results of a study released by Gulf Investment Corporation (GIC) reported rates of unemployment among GCC citizens is steadily increasing; exceeding 10.5 percent in Saudi Arabia, 14 percent in the United Arab Emirates, 8 percent in Oman and Bahrain, 6 percent in Kuwait and 3 percent in Qatar.
Unemployment is notably higher among 19 to 25 year-olds; 30 percent in Saudi Arabia, 28 percent in Bahrain, 23 percent in Oman, 24 percent in the UAE, 23 percent in Oman, and 12 percent in Kuwait.
Based on International Monetary Fund estimates, the next few years will see a continuous increase in unemployed GCC citizens. It is expected the unemployed work force will reach 2-3 million unless measures to create job opportunities are addressed.
The GIC report attributes the unemployment problem to three main elements: economic, educational and demographic. Demographically, the GCC population is growing rapidly, especially the younger generation seeking to enter the labor market.
The GCC economy was based on a public sector ideology since the middle of last century and therefore monopolized economic and investment activities and recruited the national work force at higher salaries.
The private sector firms recruited and depended on a foreign work force at relatively lower salaries creating a significant gap between the public and private sectors.
The GIC study outlines recommendations including the creation of a fund to support small and medium enterprises for young graduates and entrepreneurs.
It recommends GCC governments implement programs for the nationalization of jobs within strict time frames and make the implementation of local hire programs a precondition in the awarding of contracts to international companies.
The GIC study also recommended bridging salary gaps, job benefits and working conditions in the public and private sectors.
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