When times get tough, the tough…leave? In this situation, maybe.
For many expatriates living in the Middle East today, particularly in the Gulf Cooperation Council (GCC) countries, this is the dilemma they face. Whether it’s the threat of ISIS (Daesh), falling oil prices or changing immigration laws, expatriates in the GCC may soon experience a little more hardship in the region.
The Kingdom Of Saudi Arabia, arguably one of the more historically “stable” Middle Eastern countries, has experienced two terrorist attacks in one week by Daesh sympathizers. The second attack, on Friday, May 29, occurred in the populous city of Dammam, close to the heart of where many expatriates reside in compounds around Dhahran and Al-Khobar. For many, these attacks resemble those from the early 2000s and may offer a glimpse of things to come. Or at least, create an illusion of threat.
What is an expatriate?
For the GCC in particular, the term expatriate refers to people who are working in a country of which they are not permanent residents or intend to be permanent residents. They are working under a temporary work visa that may be extended (some stay for more than 20 years).
The GCC countries do not allow for permanent immigration, therefore all foreign workers are temporary under the kafala system, but only those working in highly skilled professions are referred to colloquially as expatriates. “Third Country Nationals” (TCNs) or “migrants” are often the colloquial terms used for expatriates who work in the so-called unskilled job market such as construction, care giving, retail, gardeners etc, which in and of itself is a tragic misrepresentation and class divide. For the purpose of this piece however, the term expatriate will refer to all foreign workers in the GCC.
GCC Reliance on Expats or Foreign Workers
Expatriate population in context
The graph above illustrates the stark majority of non-nationals living in the GCC in comparison to nationals. The UAE and Qatar in particular have large numbers of non-nationals (which includes expatriates, as well as other groups such as refugees) among their populations, 87% and 85% respectively. In comparison to countries such as the United States and Canada, this is a large difference in population demographics.
Primarily, expatriates working in the GCC make up a majority of its private industry, while the nationals work primarily in the public sector or government. This is exemplified in the graph below from an International Monetary Fund (IMF) 2013 report.
The majority of foreign nationals or expatriates working in the GCC are low-skilled laborers. This is shown in the graph below. The UAE has the lowest number of high-skilled foreign workers (65%), while the other GCC countries share relatively similar numbers of low-skilled labor. Averaging at 86%.
Analyzing these two graphs together, it is evident that there is a significant amount of low-skilled labours in the GCC working primarily in the private industry. A majority of these workers come from Bangladesh, India, Nepal, Pakistan, the Philippines and Sri Lanka as reported by the IMF. Private companies tend to hire foreign labor over national labor because it is cheaper, while many nationals (low-skilled and high-skilled) prefer the public industry.
The Causes For Flight
If the security threats facing the region, particularly Saudi Arabia, which rests on the border of Iraq, Jordan, and Yemen, continue to grow, there will be significant numbers of expatriates leaving. The GCC region was previously at its most insecure during the Gulf Wars (1990-1991), in which over 600,000 people left Saudi Arabia alone, a majority of whom were expatriates.
The Riyadh Compound Bombings in 2003 serve as a stark example of what could potentially convince expats to once again flee the country. In this attack 35 people were killed and over 200 injured, including many expats. Following this attack, thousands left, particularly those from Western countries. An article from the Telegraph in 2003 reported, “airlines reported a flood of bookings for flights from Saudi Arabia to Britain and America…” In certain cities such as Khamis Mushayt, located in the southern part of the country, the number of expatriates living in the area never returned to what it once was. Hundreds of compound houses remained empty for years.
The economic state of the GCC countries also has a large impact on the expatriate population. As evident in the map to the right, migration to the GCC countries soared following its economic growth, particularly after the mid 1990s.
If these countries face economic instability in the future, due to plummeting oil prices, they may be forced to cut back lucrative tax breaks and subsidies for expatriates and foreign companies. They, in particular, will affect high-skilled worker’s decisions to continue working in the region. Changing immigration laws and policies will also influence expatriates’ decisions to stay. In Saudi Arabia for example, “Saudization,” a process by which the government hopes to employ more Saudis in the private industry, will constrain businesses from hiring more expats or retaining them on additional contracts. Over time, this may change the make-up of the workforce in Saudi Arabia to resemble countries such as Canada or the United States.
So, Will They Stay or Will They Go?
A report from 2012, showed that expatriates living in Saudi Arabia, Qatar and the UAE were more likely to leave after only a few years, with an average 30% saying they would want to leave the country now, compared to only 13% of expatriates globally.
In a recent study, I asked several Foreign Defense Contractors (FDCs) working in Saudi Arabia now if they would leave due to the security threats in the region. The overall conclusion is no, they wouldn’t, unless of course the economic benefits were to erode alongside emerging security threats. However, they did state they would have their families leave for their own safety.
It is very difficult to predict whether a mass exodus will occur – but I can say with certainty that if attacks similar to the bombings in Riyadh happen again and more consistently, then many Western expatriates will leave. As my father once told me, “It’s just not worth it.” If that happens, then these countries may be strained economically, especially the UAE, as it relies most heavily on foreign workers.
I lived in Saudi Arabia for several years, and there were minor threats made against the expatriate community that forced our compounds or schools to be “locked down” during that time. In reality, similar threats happen in the West as well. School shootings serve as a terrible example. Therefore, why so much concern now? While speaking with a friend about the attack in Dammam, a city located near our old high school, she insisted that if these types of events are not prevented by the Saudi security system, then it will have an impact. Many expatriates, including low-skilled workers, feel especially at risk in the region as foreigners. She also indicated that if something along these same lines happened in the UAE especially, then expatriates will lose faith in the region and its stability. In other words, it’ll all be over.
I’m not that pessimistic. The Saudi government, along with the other GCC countries, has proved effective in preventing further major Al-Qaeda-inspired attacks on its soil following 2003-2004, and I believe it will prevent Daesh as well. Perhaps, however, I’m being too optimistic and not recognizing the very new and unusual threat that Daesh, as well as the insecurity in Yemen, presents.
The psychological reaction of fight or flight in response to a perceived threat will be at the forefront of the decision-making process for expatriates within the next few years. Does it make sense to stay in a region that appears to be plummeting into instability, both economically and socially, all for a dollar?