Qatar to cut wages of foreigners; Kuwait to freeze recruitment of non-nationals in the oil sector
Qatar’s Ministry of Finance has instructed government-owned entities to cut employment costs of non-nationals by 30% starting from 1 June 2020.
A Ministry circular stipulates these cost reductions can be achieved by slashing monthly wages and benefits or layoffs. The circular also requires suspension of certain benefits, including holiday allowances for both Qataris and non-Qataris alike. According to a source who spoke to Doha news, these measures are "temporary and will be re-assessed periodically."
In response to the drop in oil prices and economic recession driven by the COVID-19 crisis, several Gulf states are implementing austerity measures, including cuts in public sector wages. Last month, the Omani government issued a decision to reduce the wages of new government employees by up to 23%, and on 28 May, Oman’s royal court issued circular instructing government entities to eliminate some expatriate contracts upon their expiration.
In Kuwait, Oil Minister Khaled Al-Fadhel said recently that migrants will no longer be hired in Kuwait’s oil sector and that contracts with migrants will be reduced. This follows last week’s statement by Kuwaiti Prime Minister to reduce the expatriate population 70% to 30%.
It’s unclear if and how these policies will be implemented. But given the small local populations in the Gulf countries, falling infertility rates, and limited technical training in a variety of sectors among nationals, such policies could have negative and long-lasting implications. According to Kuwait researchers Shaikha al-Hashem and Geoffrey Martin, “Even if Kuwaiti nationals become more prominently employed in the management of megaprojects, the population is simply too small and still requires a lot of technical training and education to begin to develop the economy without expatriate involvement.”