04 July 2017 | Doug Bandow | The American Conservative
“..Estimates of the share of expatriates are rough but striking. Up to 90 percent (some estimates are a bit lower) of the residents of the United Arab Emirates are foreigners. Roughly 85 percent of Qatar’s population is foreign.
Kuwait comes in at 70 percent.
Bahrain’s expat share is 55 percent.
Both Oman, the least visible of the Gulf nations, and Saudi Arabia, the most populous of the six, fall in at 30 percent. In the latter even the smaller percentage means there are upwards of eight million foreigners in the Desert Kingdom. In sharp contrast are Iran, Iraq, and Yemen, which have followed a different path.
Money obviously can buy comfort, if not happiness. It seems to have worked for the Gulf States. But the fall in oil prices has put the Gulf model under severe stress. Once addicted to free spending, the countries are facing deficits and being forced to borrow to maintain current outlays. Yet even the latter is no longer easy. Bahrain and Oman have seen their credit ratings downgraded to junk status.
Kuwait, with a democratically elected National Assembly, has faced popular resistance to retrenchment, particularly reductions in social benefits and economic subsidies. Roughly half of the Assembly members elected last November formed an unofficial opposition.
Even the most dictatorial of the Gulf States, Saudi Arabia, feels the pressure. The deputy crown prince led efforts to trim expensive social benefits and subsidies as well as government salaries last fall, but the monarchy recently reversed those cuts. This will exacerbate the underlying economic problems.
Another austerity target is expat labor. For years governments have officially committed to labor force nationalization, without great effect.
Some recently launched new efforts to reduce reliance on expats: taxes on hiring foreigners, requirements for domestic hiring for particular occupations, and employment quotas in some industries. A few have even rounded up and deported some expats. But an increased cash crunch may provide the most powerful incentive of all to change.
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