Kuwait’s government needs around one billion Kuwaiti dinars ($3.3 billion) annually to nationalise all public sector jobs, in order to offset the gap between salaries of Kuwaitis and expatriates, according to a government document obtained by a local newspaper.

The average salary in government positions stands at around 1500 Kuwaiti dinars for a Kuwaiti national, in comparison to 680 Kuwaiti dinars for an expatriate. Thus, Kuwaitization of nearly 96,000 jobs in the public sector would cost the government around 80 million Kuwaiti dinars a month, according to the document seen by Al Anbaa newspaper.

“Disguised unemployment phenomenon plagues Kuwait’s public sector because welfare distribution is still connected to employment in government jobs for political agendas,” Mohamad Ramadhan, a Kuwaiti economist told Zawya in a telephone interview.

Kuwaitis have been reluctant to join the private sector, with many opting to stay unemployed while waiting for a job in the public sector, which offers higher benefits, perks, less working hours and job security.

“Kuwaitis are rarely fired from public sector jobs regardless of their productivity, except in extreme situations like corruption or fraud cases,” Ramadhan adds.

Kuwait's public sector wages bill is one of the highest in the Gulf region, according to the IMF, putting a huge strain to the government’s budget.

“In order for the government to overcome the challenge of an inflating public sector wages bill, employment needs to be separate from the wealth distribution to citizens,” Ramadhan notes. “This creates an incentive for Kuwaitis to pursue productivity in the workplace.”

Private sector expatriate employees earn an average 246 Kuwait dinars per month, which is around 60 percent lower than expats in the public sector. The average monthly salary for a Kuwaiti in the private sector is 1093 Kuwaiti dinars, which is 26 percent less than the compensation in government jobs, the report added.

Efforts to Kuwaitize the private sector is doomed to fail for a variety of reasons, according to Ramadhan.

“It is highly expensive to hire Kuwaitis in the private [sector] as there is a large gap between salaries of expats and Kuwaitis,” he said.

Putting a quota for nationals would not solve the issue either as it would trigger the trend of fake employment of nationals, he noted, adding that there are many professions that can never be filled by Kuwaitis whether in the short-term or the long-term, such as nursing.

“I see the only move that would increase employment of nationals in the private sector is to impose incremental fees for employing expatriates, which would make the cost of hiring foreigners almost close to that of hiring locals,” Ramadhan notes.

Non-Kuwaitis make up around 26.4 percent of the total number of public sector employees, according to the Kuwait Central Statistical Bureau 2016 figures.

“Participation of expatriates in the public sector is higher than officially announced and it is difficult to track. This happens through hiring employees registered in the private sector through contracts with government departments,” Ramadhan notes.

© Zawya 2017