Qatar “cannot afford” to impose strict limits on foreign workers

Author: Kirsty Tuxford | Date: 13 Jan 2016

HR expert says vital organisations would shut down if expats left

The number of Westerners choosing to work in Qatar is falling as domestic governments tighten their tax regimes for expatriates, negating the previous draw of a tax-free income – and that could be potentially troublesome for the country’s long-term outlook, according to a leading regional economist.
“The large-scale reduction in skilled expatriate labour from the region should not be underestimated,” says David Jones, labour market economist, founder and managing director at the Talent Enterprise. “One senior official within one of the public healthcare systems in the region recently stressed that they would not be able to run a single clinic or hospital with national staff, without the continued support of qualified professionals from other regions.
“In the case of a major natural disaster, a diplomatic incident or region-wide conflict, which may cause the expatriate population to leave, within a few days airports would close down, power would cease to be generated and food would not be delivered.
“If only from a risk management perspective, it is clear that local populations becoming more self-reliant and expatriates becoming more permanently committed to their lives in the Gulf would have many benefits for all,” he adds.
An issue for the GCC's labour market as a whole has been revealed by research showing that foreign workers tend to adopt a risk-averse and defensive position, rather than taking calculated risks and operating at peak productivity , as many are driven by a fear of losing their job.
“There's also a common phenomenon of ‘expat failure’, with return rates in the first year of appointment as high as 30 per cent in some industries in the region,” says Jones. “Even with those who remain, there still may be significant issues, such as in Qatar, where overall labour productivity levels for both nationals and expatriates are at exceptionally low levels compared to international benchmarks.”
In Qatar, as in the UAE, there is a push to encourage more locals into the workforce. “To our knowledge, there is a formal policy around Qatarisation – though there isn’t too much publicly available information on quotas or sectors,” says Radhika Punshi, director of innovation at The Talent Enterprise. “Some sectors, such as aviation don’t have a very strict mandate at the moment, due to the difficulty in achieving sector-specific nationalisation quotas.”
The figures demonstrate how important expats are to the region. They hold more than 80 per cent of private sector jobs across the GCC, and this increases to more than 90 per cent in the UAE and Qatar.
“In Qatar, between 2004 and 2010, more than a million non-Qatari workers boosted the population from 700,000 to 1.7 million, and dependence on foreign workers is expected to continue,” says Jones. “This is placed into sharp focus when you consider that the number of Qatari graduates is between 3,000 and 3,500 every year, insufficient to meet the current demand in most sectors.
“This has far ranging implications. Arguably, the challenge for policy-makers in Qatar is to increase local representation in the local job market while managing this growth.
“Qatar cannot currently afford to implement strict limits on the employment of expatriates in order to meet its growth ambitions. Yet a rapid decrease in the expatriate working population could have serious consequences for economic growth and the country’s standard of living,” he says.