Young, Educated and Dependent on the Public Sector: Diversifying Qatari and Emirati Labor Markets

On December 15, 2010, the Brookings Doha Center hosted a policy discussion to explore and recommend solutions for labor market diversification in Qatar and the United Arab Emirates. The panel featured Zamila Bunglawala, Visiting Fellow at the Brookings Doha Center, and Sheikha Aisha bint Faleh al-Thani, member of the Supreme Education Council of Qatar and founder and director of the Faleh Group.

Presenting her research into Qatari and Emirati labor markets, Bunglawala introduced her findings by citing troubling statistics regarding employment trends for the two wealthy Gulf states. With over 80 percent of their populations working in the public sector, Qatar and the UAE have amongst the highest levels of public sector employment in the world. For countries attempting to manage their significant wealth and plan ambitiously for the future, Bunglawala asserted that the governments of Qatar and the UAE must correct this public sector employment concentration in order to ensure sustained growth, innovation, and productivity.

In searching for causes and possible solutions for the public sector saturation, Bunglawala interviewed forty students and recent graduates across Qatar and the UAE in order to assess their attitudes towards work, reasons for preference, approach to job search, and insight into labor market diversification. She found that the interviewees, both male and female, are keen to enter the labor market after completing their education and hope to contribute their skills within their countries rather than abroad. However, labor market access in both countries is undermined by underdeveloped and underutilized career counseling. University students, despite possessing in-demand skills, are not sufficiently equipped with the knowledge to translate their education into employment. According to one student Bunglawala interviewed, “I don’t know what my career prospects are. My teachers keep telling me I have skills that are in demand but I don’t know which employers would hire me.” Compounding the lack of awareness, students often rely on connections through friends and family to secure employment. Since an overwhelming majority of their contacts work in the public sector, students are disproportionately led into public sector employment.

In addition to the private sector’s recruiting difficulties, nationals tend to favour public sector employment due to perceptions of higher pay, greater job security, and job prestige. Misunderstandings also factor into this preference: many nationals are unaware of the pension plans offered by private sector companies and also believe that these companies terminate their employees with little cause. On the employer side, Bunglawala discovered a private sector that is facing difficulties connecting with young nationals whose career  expectations often clash with the private sector environment. One official of a multinational company in Qatar commented that “we are committed to recruiting nationals but are finding it hard. We have to be clear that we’re not into giving out big titles or big salaries to new graduates.  We have a career development plan and salaries are progressive but promotions have to be earned.” Bunglawala also found that many of the strongest private sector careers, such as retail and hospitality, are seen as inferior by many nationals. Furthermore, nationalization campaigns designed to increase diversification have not been as successful as originally hoped. Some private sector employers  have reportedly  hired nationals solely to meet a  national target, not to provide them meaningful, necessary work.

Bunglawala ended her presentation with recommendations to increase labor market diversification. She stressed the need for greater labor market connectivity and mobility, through which educational institutions raise awareness of employment opportunities, better educate their students on the work environment, require student internships before graduation, and bolster their career advising efforts.  Bunglawala also suggested the creation of a Strategic Advisory Committee, which would open dialogue between economic, social, educational and labor market researchers and policymakers to help advice on policies for the labor market and economic growth more effectively. Additionally, Bunglawala stressed that the government must identify ways to level the playing field between the public and private sectors through addressing salary levels, performance-related pay, and working hours.

Following Bunglawala’s presentation, Dr. Sheikha Aisha Al-Thani provided her insight into labor market diversification. Al-Thani commented that such a disparity and dependence on foreign workers is not only economically unsustainable but can even lead to violence, as it has in Bahrain. Having spent much of her career in education, Al-Thani has observed a multitude of reasons that contribute to the bloated public sector. From an educational standpoint, Qatari enrolment in higher education is not as high as it should be and internship and training programs are not well publicized or understood. Additionally, students do not learn the necessary skills that would prepare them for a private sector environment. Al-Thani also noted that the government hires more employees than it needs, and offers benefits that the private sector cannot match.

In addressing the lack of labor market diversification, Al-Thani remarked that the government has woken up to the problem. But ongoing efforts, including nationalization campaigns and privatization of K-12 education, are not enough. Al-Thani’s recommendations to increase diversification emphasized that the government must use a more holistic framework, encompassing education, labor market strategy, and a sounder, better organized Qatarization policy. She asserted that educational institutions, spurred by government policies, must better focus on vocational training to prepare students for in-demand careers. In making these careers more attractive, Al-Thani also raised the possibility of government subsidized wages. In addressing the cultural divides between expatriate run private companies and Qatari and Emirati nationals, Al-Thani highlighted the need for advisory boards that advise companies on the cultures and customs of the country.

The presentations were followed by a spirited question and answer session that addressed the role of mixed sector organizations in promoting diversification, the drawbacks of Qatarization, and different methods to reduce public sector employment levels.