There are currently long passenger lines at airports in Dubai, Kuwait, Qatar, Bahrain and Saudi Arabia. They’re not foreign tourists or locals taking advantage of a resumption of airline service that was curtailed by the coronavirus pandemic. Instead, they are foreign workers from India, Pakistan, Afghanistan, Bangladesh, as well as Britain, the United States and Australia, who are being forced to leave, sometimes after living in the Gulf region for many years. They now find themselves out of work, deprived of an income and in many cases without a government social safety net to get on by during the pandemic.
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Saudi Arabia is hoping to expel 1.2 million of the 11 million foreign workers in the country by the end of the year. So far about 300,000 have left and another 180,000 are registered as departing. The Kuwaiti prime minister has declared his intention to reduce the number of foreign workers in his country by half, at which point they will represent “only” 30 percent of Kuwait’s residents. Of the 4.8 million people living in Kuwait, 3.4 million are foreign nationals. The government there is providing amnesty to anyone illegally in the country and providing free flights out to encourage them to leave.
The oil company in Bahrain, the Bahrain Petroleum Company, has rescinded hundreds of employment contracts and is working to expel thousands of other foreign workers. A survey conducted by the consulting firm Oxford Economics revealed that the United Arab Emirates is expected to lose about 900,000 workers, or about 10 percent of the country’s residents.
This is not something limited to the Persian Gulf. The International Labor Organization has reported that more than a billion workers around the world are expected to lose their jobs as a result of the coronavirus pandemic, but in Gulf states such as Kuwait, Bahrain and the UAE, where the number of foreign workers exceeds that of the countries’ citizens, such a mass exodus could have major implications on local economies and societies.
The phenomenon is not only affecting blue-collar workers. There is the risk that the entire middle class in these countries could collapse. Some of the foreign nationals work in government offices (including Kuwait, for example, where about 100,000 government employees are foreigners). Some foreign nationals also work in management positions – including senior positions – in service activities such as the health sector, hotels, aviation and education – that could now face major personnel shortages. Many foreigners had opened small and medium-sized businesses that could now face closure, cutting off a revenue stream for thousands of suppliers, importers and distributors.
Media outlets in the Gulf have been full of heart-wrenching stories of workers and entire families who have lived for decades in the region and are now busy packing up their households and looking for housing and jobs in their countries of origin. A teacher from Australia who had tried to stay on in Dubai and was now returning to Sydney found some consolation in the fact that in Australia her family would get unemployment compensation and free education for the children. In Dubai, she paid sizeable sums in tuition for her children’s education.
Tuition at good schools in the Gulf runs about $11,500 a year on average, but many students have recently been withdrawn from the schools, not only because they and their families are leaving the country, but also because native families can no longer afford it.
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Some of these schools, which offer education at a high level and prepare their students for future studies at universities abroad, will have to close. The remaining parents will need to register their children at government schools that are not considered as good. That will have long-term consequences when the students seek to enroll in high-demand technology programs at higher education institutionsin the Gulf – or even more so, overseas.
In some cases, the members of the family go in different directions, with the husband, who generally earns a better salary, staying on in the Gulf while the wife and kids return to their country of origin.
A large number of these foreign workers, sometimes more than half, such as in Kuwait, do domestic work or cleaning, or work in childcare or as drivers. Their departure will require societal adjustments and changes in the way of life in the country. Some analysts in Kuwait and Saudi Arabia have expressed the view that it will benefit the countries, because Kuwaitis, Saudis and Qataris will have to start doing the household chores themselves or engage in simpler jobs that they have shunned until now.
But it’s hard to imagine that such a major change, which would redefine social status, would actually occur for the foreseeable future. If it did occur, it would provide a real boost to the poor in the Gulf states, which include religious minorities, such as Shi’ites in Saudi Arabia and Bahrain. It would give them a chance to improve their standard of living and turn themselves into a new middle class.
Admittedly, such a prospect may be too optimistic, because it is not only economics that affects that standing of these minorities but mostly Sunni religious politics, through which these Shi’ites are viewed as a hostile and dangerous population that is tethered to Iran, a majority-Shi’ite country.
The reverse migration is also expected to have severe consequences in many of the migrants' countries of origin. Some countries will have to contend with the return of millions of citizens and their families, who over the years had been helping to support relatives back home and whose remittances fueled the economies in their countries of origin. Now these countries will have to deal the return of a wave of jobless people and the loss of the revenue that they provided.
That, of course, is not the concern of the Gulf states, which are expected to face deficits of 15 to 25 percent, some from the loss of revenues from fees and taxes that the countries had been collecting from the foreign workers. In Saudi Arabia, for example, it is estimated that the revenue lost from foreign workers could be as high as $17 billion. That, along with the plunge in oil prices, has resulted in the tripling of the value-added tax rate and the scrapping of cost-of-living increases.
And all of this has been happening without any firm prospect as to when the COVID-19 pandemic may be over.