Major policy changes must take place in the GCC's labor to tackle the growing dependence on the public sector as the main job creator, a study conducted by Booz & Company's Ideation center published on Sunday said. “With unemployment levels of nationals reaching double digits in all GCC countries, despite rapid economic growth over the past decade, the region must effect wide-scale changes in order to reverse the problems of unemployment,” the study said. Cultural and legal issues were among the factors that affect the employment policies in the GCC region, the study said. “An education system not well aligned with the needs of modern industry; citizens conditioned to expect that governments will always take care of them; and often-ineffective policies in areas such as immigration and retirement,” the study pointed out. The influx of expatriates to the region since the 1970's has helped keep some critical industries running, but it has also created problems that cannot be resolved easily, such as threats to cultural identity and heritage,” said Hatem Samman, chief economist in Booz & Company's Ideation center who took part in preparing the study. The study suggests implementing wage support to encourage private sector to hire nationals, and apply legal restrictions on foreign workers through quotas and fees. The study also suggests revising the Kafeel system. The study also looks into the impact of social welfare policies in the GCC region. “The social safety benefits that exist (mostly cash handouts) are hampered by a mind-set that social welfare is most important as a form of sustenance for the disadvantaged, rather than as a way of getting them to return to the workforce,” the research explains. The study revealed the huge difference in the size of women employment in various GCC economies. “The GCC's average workforce participation rate for women was 33 percent in 2005--a year of torrid economic growth-and ranged from 18 percent in Saudi Arabia to 50 percent in Kuwait,” the study showed. The news comes a week after the National Assembly in Kuwait revised the restrictions imposed on women's labor in certain professions, which could stipulate a bigger share for female workers in the country's economy. The study recommends taking a holistic approach to tackle various labor challenges. “The first is expanding the economic base and creating additional jobs in strategic sectors in which GCC countries have a competitive advantage and can provide sufficient income for nationals. The second is developing the workforce by reforming the education system and upgrading labor skills to create a generation of skilled nationals to match economic requirements. The third is putting in place effective labor and immigration policies by remaking the system and increasing national labor participation,” the study noted.
