INSUBCONTINENT EXCLUSIVE:
The routine is familiar to office workers everywhere
In Kuwait, it proved too much to ask.The government was trying to trim a wage bill that eats up more than half its budget -- an outlandish
share even by Gulf standards
Last year, it required public employees to swipe their fingers on a biometric reader every morning
The following quarter, about 5,000 quit
Many of them rarely if ever turned up, and were worried they'd get caught under the new rule, according to Khalifa Hamada, the
undersecretary at Kuwait's Finance Ministry.All Persian Gulf monarchies have some version of this problem
Government is the employer of first resort -- even when it has nothing much for its employees to do
That's part of a tacit agreement between ruling families and citizens
The latter may not get a say in how their countries are run, but at least they get looked after.Now, after years of lower crude prices, and
increasingly aware that the oil will run out one day, Gulf rulers are seeking to repair public finances
The wage bill -- by far the biggest spending item in most cases -- would be an obvious place to start
But it's become a kind of third rail, only approached at high political risk.The historical guarantee of government jobs "is becoming
untenable," said Steffen Hertog, a professor at the London School of Economics
At the same time, he said, "touching the public payroll means tinkering with the core of the Gulf social contract."The dilemma is especially
acute in the biggest Gulf Arab nation, Saudi Arabia.Kuwait or Qatar, with much smaller populations and higher energy earnings per capita,
can afford to take some time figuring out a solution
About 70 percent of Saudis are below the age of 30
Some 1.2 million will join the workforce by 2022 -- four times the total number of Qatari citizens.Under Crown Prince Mohammed Bin Salman's
ambitious post-oil plan, the crucial role of finding jobs for them is supposed to fall to the private sector.The government, which employs
about two-thirds of Saudi citizens who work, is chipping away at a budget deficit that ballooned to almost 16 percent of GDP after the oil
shock of 2014.Like other Gulf rulers, Prince Mohammed -- known as MBS -- began his cost-cutting drive by scaling back investment projects
Next on the list were subsidies for fuel and utilities, while a value-added tax was also imposed. Under Crown Prince Mohammed Bin Salman's
post-oil plan is to fall to the private sectorBut when the crown prince took aim at the allowances paid to state employees, he was forced
into a U-turn a few months later, amid rumblings of public discontent and signs the economy was stalling
He proceeded to give them all a monthly $266 cost-of-living award -- erasing savings achieved elsewhere.MBS and other Gulf rulers are
ducking the big fiscal challenge, according to Monica Malik, chief economist at Abu Dhabi Commercial Bank
"There's a limit to how much they can cut back on capital spending," she said
"They need to tackle the wage bill."Those Saudi civil servants aren't necessarily busier than their Kuwaiti peers.One employee at a Saudi
ministry, who asked not to be identified by name, says her boss has been on an unofficial three-day week for years, and didn't change that
habit even when swiping-in was mandated
When a minister visited her department, several people she'd never seen before turned up
She discovered they'd been on the payroll for years.Tracking technologies like fingerprinting, swipe-cards and office cameras can identify
the absentee "ghost workers." Dubai's ruler tried another tack two years ago, making a surprise visit to government offices at the start of
the working week -- and encountering a lot of empty chairs.But such methods won't help eliminate jobs whose holders are fine with showing up
and swiping in every day -- but have little to do in between
Nor will they address the fundamental distortions in Gulf labor markets
"We're advocating for structural reforms,'' said Natalia Tamirisa, IMF mission chief for the United Arab Emirates
"We don't see that happening yet."Many graduates have been comfortable rebuffing offers from private companies and waiting for a government
Pay is higher, hours shorter, vacations longer, and allowances or bonuses are plentiful
Walid Al Said, a consultant in Kuwait, once headed a government department and recalls interviewing a 22-year-old job-seeker whose first
question was: "What age can I retire"Attitudes are gradually shifting, Al Said says
Still, lower-paid private jobs are mostly taken by foreigners
Gulf governments have been trying to edge them out
The Saudis, for example, have forced companies to employ more locals, banned expat workers altogether in some industries, and introduced
taxes on them and their dependents.A residential neighborhood in the Al Satwa area of Dubai, United Arab Emirates.But pushing foreigners out
could just result in lower employment
Many businesses would go bust if they had to take on a local, at pay-rates competitive with government work, to replace each foreigner
Malik calculates that 466,000 expat jobs were cut in Saudi Arabia last year, while only 103,000 Saudi citizens got hired.What's more,
belt-tightening by governments -- especially on investment projects -- has slowed job-creation in private sectors that are still largely
state-driven (Dubai is a partial exception).Foreign inflows are supposed to pick up the slack
McKinsey Co., which helped draft the Saudi economic plan, estimated that $4 trillion of investment would be required to create 6 million
jobs by 2030.But foreign direct investment in Saudi Arabia slumped more than 80 percent last year, according to a U.N
Companies may have been deterred by MBS's proclaimed crackdown on corruption, which saw dozens of Saudi executives and princes detained and
stripped of their assets without due process.Gulf Arab regimes need to "allow citizens to access the country's wealth in ways other than
jobs,'' according to Nader Kabbani, director of research at the Brookings Doha Center in Qatar.He cites Alaska, where a state fund
distributes oil profits among residents
Proposals for a universal basic income have gained ground even in countries like Italy that don't have energy riches to finance it
In the Gulf, Kabbani says that Kuwait -- the most democratic of the monarchies, with an elected parliament -- would be the best place to
"The problem is, this conversation isn't happening,'' he said.Instead, Kuwait's Hamada has watched public employment balloon
The Finance Ministry had about 700 employees when he joined in 1987
There are 3,500 now -- but "the workload didn't increase by even 10 percent.''(This story has not been edited by TheIndianSubcontinent staff
and is auto-generated from a syndicated feed.)
