KUWAIT CITY - "Kuwait, an oil-rich country, is seriously assessing its labor market prospects. Like other Arab Gulf states, it is constrained by a small indigenous population and work force and suffers from a critical shortage in manpower. Foreign labor and skills are the catalyst of accelerated growth, while the nationals represent about 40 per cent of the population and only 22 per cent of the nation's workforce," says Dr Sulaiman Al-Qudsi, winner of the 2003 prestigious award from Kuwait in the field of economics on the issue of education and labor market in the Arab world.
In a lecture organized by Kuwait Economic Society (KES) Wednesday, Al-Qudsi stressed the importance of studying the composition of the Arab labor market. "Studying the composition of the labor market to develop a good understanding of the basic elements and the essential role it plays in determining the level of labor supply in the Arab world is an added value to the regional economy," he explained.
Pointing out that the GCC economies are entrenched in the social contract that has created dual labor market structures in which natives cluster in the public sector while foreign workers engage in private sector jobs, Al-Qudsi said the ability of the government to continue providing employment for nationals in the public sector has been curtailed by receding oil revenues and by the high built-in expectations of nationals. "Most of the temporal job creation has occurred in the private sector in low-skilled and low-wage occupations that do not attract nationals," he added.
Rising
"Underneath the rising long-term unemployment, the GCC economies feature a complex structure of disaggregated unemployment rates across gender, age, education, space and health. The paper showed that majority of the unemployed citizens in the GCC are those that become jobless for the first time and the transition from school to first job embeds the influence of mismatch between educational qualification and labor market requirements. In their efforts to strengthen the links between education and employment, GCC policy makers may wish to consider Germany's dual system of partnership between firms and schools at the secondary education and beyond. Through its apprenticeship system, the German model focuses on ensuring that young people have a training place and a suitable employment. In addition to private companies, the system relies on the support of many organizations such as employer associations, industrial and commercial chambers, and unions as well as state and federal governments. The system offers participants great opportunities to learn, get a degree and find a job in the companies that trained them and concurrently enjoy job security and possibilities for advancement," Al-Qudsi opined.
Monitoring
Al-Qudsi pointed out a key recommendation arising from this research is that a common framework for monitoring labor market statistics and especially for accurately measuring unemployment and labor market conditions is critically needed in the GCC countries. "As much as possible, the GCC countries should adopt common definitions and measurement approaches. High-quality and accurate labor market statistics become all the more important, given the rapid structural changes that economies of the world are undergoing. To ensure robustness of various data sets on unemployment and other measures of labor market tightness, statistical agencies in the GCC countries should also open up their books and create partnerships with research institutes in the academe, private sector and government agencies," he suggested.
Emphasizing the need to commission detailed micro-level data from specialized field surveys on a regular (quarterly or monthly) basis, Al-Qudsi said data integrity should be enhanced. He asserted coverage of these surveys should be expanded to include information on schools that polled cohorts attended, (their types, subjects of study and quality as well as grades received). More information should also be gathered on firms and experience in economic establishments that cohorts worked at. Following the recent experience of Arab statistical agencies in Egypt, Jordan and Yemen, the socio-economic background of surveyed GCC households should be expounded too."
Worth
Is the exercise worth the efforts and resources? Al-Qudsi stated the answer is categorically in the affirmative. He cited advanced country experiences that amply demonstrate data banks and their integrity are critical for research and development proven to be a strong determinant of economic growth and of job creation as well.
Al-Qudsi is the chief economist of Arab Bank and is an internationally recognized author in the fields of energy, labor and macroeconomic-financial market interactions. He leads research teams in studying global and regional financial markets and their inter-linkages with the regional and global economies. He is also the senior editor of the refereed academic journal Arab Bank Review and the author of numerous Arab Bank publications including Arab Bank Weekly Economic Monitor (ABWEM). He has implemented many consultancy projects for the World Bank, Harvard Institute for International Development, OAPEC and the International Labor Office.
In addition to serving as a referee for many journals, Al-Qudsi is one of the founding members of the Cairo-based Economic Research Forum of Arab Countries, Iran and Turkey (ERF) and is the recipient of several grants and honors including best TA award from U.C. Davis (1977), a prize from The Arab Bank for the Best Young Arab Economist (1988), a DOE grant (1995) and a prestigious prize from Kuwait (2003).
By Rena Sadeghi
© Arab Times 2009
