New Regional Views
GCC labour markets absorb shocks
Photo: Arabia Monitor
The pandemic, coupled with the oil crisis have inevitably forced MENA countries to slash their budgets. This in turn has prompted layoffs and an outflow of foreign workers from expat-dependent GCC countries. While it presents an opportunity for GCC to accelerate their worker-nationalisation programmes, the rapid departure of foreign labour, including skilled professionals, is expected to slow the post-pandemic recovery in the GCC, at least for the short-to-medium term. It will take time for the expatriates to be replaced.
This week we analyse the double-edged sword of an expat exodus on the GCC. While departures have not been as high as expected given travel restrictions, we discuss the repercussions that lower expat figures can have on vulnerable sectors that are highly dependent on foreigners. We also highlight the impact on remittance flows and the pressure on consumer spending. We expect GCC labour policies to change as the pandemic continues to provide a bleak outlook this year.