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Gulf rentier expectations 16, August 2010

Posted by thegulfblog.com in Saudi Arabia, The Emirates.
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Further to my post yesterday about Kuwait and their pernicious rentier state mentality, just so people don’t think that I’m being overly mean to Kuwait, I thought it best to share out the loftily biting remarks. And as luck would have it, two articles popped up in my Reader that allow my to lecture the UAE and Saudi too.

A recent study undertaken by a Dubai based market research firm found – shockingly – that Emirati teenagers spend nearly four times the international average per week: some $71 compared to $21. [Interestingly only Norwegian teenagers spent as much, though I suppose that this has more to do with higher tax and prices in Norway.]

This is not exactly ground-breaking news. Nor is it, in and of itself, a problem. However, speak to Emiratis of an older generation and I’d bet that their reaction would be exactly the same as those in Kuwait: they fear that the younger generations that were brought up in such luxury simply do not have the same values or work ethic as their forefathers.

This conclusion was mirrored in an op ed on unemployment in Saudi Arabia by Abdul Rahman Al-Rashed, the former head of Al Arabiyya.

However I was informed that this unemployment is not all as a result of a scarcity of jobs. I was told that there are a huge number of jobs available, but that job-seekers reject these because they do not meet certain specifications with regards to the nature, location, or salary, of the jobs desired. These job seekers want to be employed in air-conditioned offices or in the military, and they consider service industry or manual labour jobs to be shameful. The other issue is that these job seekers want to be employed in their city of residence, and refuse to take jobs that require them to move to a different location. They also want to start any job in question with a high position and a good salary. This is why the vast majority of companies prefer to employ foreigners, which prompted the government to open the door to foreign employment.

This kind of rentier mentality is well documented. As oil goes, as Bahrain is finding, these kinds of indulgences and inefficiencies need to go. Yet Bahrain ‘suffered’ from some level of a rentier society for, say, half a century. What will happen to the Emirates and Emiratis when they too realise that they need to alter their parameters of what is acceptable after another few generations of the rentier lifestyle? How will they make the transition?


1. AbuArqala - 16, August 2010

You may have seen about the recent passing of المرحوم Ghazi AlGosaibi, Saudi poet, diplomat, and Minister of Labor.

Sometime in 2007 or 2008, he worked half a shift in a fast food joint in Jeddah to show Saudi youth that there were jobs and that there was no shame in honest work.

2. Paul Vincent - 16, August 2010

Could you expand on Bahrain?

davidbroberts - 16, August 2010

That’s a nice point.

3. AbuArqala - 17, August 2010

I’ll jump in on Bahrain.

There are Bahrainis working at Alba – in an aluminum smelter. Lunch pails, hard hats, and enjoying the benefits of being in the working class – breathing toxic fumes from the plant.

It’s probably fair to give credit to the merchant elites of the GCC states who discovered that they could employ foreign workers for much less than locals – and that by a luck of geography they could draw from the rather large labor pools in rather poor countries – so that the workers would be not only cheap but docile.

I read an account once about how at one point all the carpenters, plumbers, electricians, etc in Bahrain had been locals. And that such jobs were considered good honest work. And apparently it was not so much the oil boom that eroded this but merchants grasping for that additional and all important extra five fils of profit.

davidbroberts - 17, August 2010

That’s a very interesting point, thanks.

Was Bahrain’s ‘rentier mindset’ ever as entrenched as it is in Kuwait or the UAE? When it became necessary for Bahrainis to drive taxis etc, was this a difficult wrench ‘oh the shame’ etc. Or had they had ‘the easy life’ for a short enough period of time that ye olden days of hard work were within living memory and ergo somewhat easier to return to?

I came across some fantastic figures yesterday that I’ll post in a bit. They were the levels of Gulf nationals in the public sectors. Qatar was the highest with 88% (of Qataris working in their public sector). The Emirates was second with 85%, Kuwait third with 82% (surprisingly good, I thought ceteris paribus) and Bahrain dead last (in a very good way) with an impressive 30%. That highlights the key difference right there.

4. AbuArqala - 17, August 2010

A very quick reaction: the public sector numbers for Bahrain sound too low.

Official LMRA stats put Bahrainis at 85.8% of public sector employment. http://blmi.lmra.bh/2010/03/data/lmr/Table_A.pdf

So are the press reports wrong? Or alternatively, what is the basis for the NBK (and IBQ) study? Where did they get their numbers?

I know there are significant numbers working for the MOI and similar functions. Usually the Arabs in these are naturalized. And even if one assumes there are certain “dark forces” (pun intended) off the official books, they’re not likely to be in the 110K range.

Also more stats from the LMRA which show the wage gap and overall Bahraini/Non Bahraini employment.


You can see the cost disadvantage Bahrainis “labour” under.

davidbroberts - 17, August 2010

Hang on a minute, surely to work out the % of Bahrainis in public sector employment one ought to divide that by the total of Bahrainis working? No? That would give 47,565 (Q1, 2010) divided by 138,356 =(*100)= 34%.

5. AbuArqala - 17, August 2010

A valid point.

I misread your comment and thought you were referring to Bahrainis as a percentage of the public sector workforce. Not Bahraini public sector employment to total Bahraini employment.

davidbroberts - 17, August 2010

Err…yes. I think that’s what I was referring to. Perhaps. Hopefully. Inshallah.

6. Graham - 18, August 2010

Hi, Just wanted to point out that, to my knowledge, Abdulrahman Al Rashed is current head of Al Arabiya, rather than former. (I work with Al Arabiya)

davidbroberts - 18, August 2010

Thanks for that; my mistake.

You work with Al Arabiyya: interesting…so, whilst I don’t want to put you on the spot or anything, how’s the censorship? And what’s your 2 cents on Al Jazeera? 🙂

7. Graham - 19, August 2010

Whilst all News organisations follow editorial guidlelines, from my perspective Al arabiya remain as unbiased as is possible broadcasting from the UAE where ‘self-cencorship’ is the norm. I am not aware of any story being pulled for political reasons, though I am not on the editorial side.

Check out the article below- it may be of interest to your blog. (Al Arabiya is one of our many channels including MBC1)


davidbroberts - 19, August 2010

Thanks for your thoughts and the link.

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