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Qatar wage hikes: Et tu, Qatar? 7, September 2011

Posted by thegulfblog.com in Qatar, Random.
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Qatar has raised the basic salary for Government employees by 60% and for Armed Forces employees by 120%. Pensions and social allowances have also been hiked up. Qataris have the Crown Prince, Tamim bin Hamad Al Thani to thank for this.

It is disappointing to see Qatar follow the terrified GCC crowd on this topic. The Qatari leaders have nothing to fear from their citizens. Unlike some government in the region that need to buy them off, the Qatari elite are, generally, a popular bunch.

So why have they done this given that it will:

  • Hike up inflation, which is already showing signs of being a problem.
  • Arguably create the expectation in the future of similar rises as part of the basic ruled-ruler bargain, which, at some point, Qatar will not be able to afford.
  • Decimate any notion of succeeding with Qatarization. Private companies will have a nightmare  – more of a nightmare – in attracting well qualified Qataris if they have stratospheric pay in the public sector to compete with. Either Qataris will simply work for the public sector, that notorious bastion of efficiency, or private companies will have to hike their pay, slashing their margins and further bumping up inflation.

So why then?

  • Reward for the armed forces for their involvement in the Libyan crisis. And the public sector have been rewarded with half as much because it’s difficult to give to one and not the other.
  • To kill off grumblings in Qatar? Sure, some people have not been wildly happy about Qatar’s involvement in Libya while others bitterly complain about the state of roads in Doha or that Education City is a waste of money or that there’s not enough fruit in the local supermarket…of course there are grumblings, there always are. But these are – unless I’m missing something huge – not serious at all.
  • The Crown Prince wants some gratitude. He gave out the cash, he will receive the plaudits. But again, he’s not an unpopular fellow and it is a potentially dangerous path to follow to link one’s popularity with wage hikes or something of this nature.

The key problem with these hikes is that they reinforce the rentier nature of Qatar. All Gulf countries are fighting the difficult battle whereby productivity and work more generally is just not related to wages. The link between the labor and the fruits thereof is bust.

Encouraging the private sector is meant to help alleviate the worst of this rentier problem. Why Qatar is so catastrophically undercutting this goal is a mystery. Methinks it is partly due to the nature of decision making in Qatar and the Gulf – at the elite level, perhaps with not that much consultation – and partly because there are no real consequences to ponder right now. The difficulty with this whole rentier question comes as oil and gas rents pare down, which is not for some time yet.

Thinking of home from abroad 7, September 2011

Posted by thegulfblog.com in UK.
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One of my key peeves in this part of the world is moaning ex-pats. Don’t misunderstand me, there is plenty to be angry, exasperated or get fed up about in this part of the world, and I indulge in long tirades at times with my friends and family. But, I realise perfectly well that the UK, home, in my case, is not a bed of roses. I feel that many ex-pats forget this.

To them, ye olde England is a place of lush, green meadows, where children frolic, fish for tadpoles in streams, eat marmalade and say ‘blimey’ a lot. Such an England, I hardly need to note, has never existed.

But it is difficult, as one must not go too far the other way: castigating sunny England as some kind of ‘gone to the dogs’ slum, which comes with the obligatory sentiment that

It were never the same in ma’y day

Such sentiments really quite annoy me. People have been making these comments, that the ‘youth of today’ are a disgrace, since Roman times. Specifically in an English context, I think it was a monk in Jarrow well over a thousand years ago who  jotted these sentiments down.

Certainly, when one reads horrific stories such as this one, where a student who asked a group of youths to stop throwing conkers at him was stabbed and killed, everyone surely has a natural impulse to hail the return of the death penalty as the simple, swift and sensible answer (or is that just me?) or one sees this bunch of rabid, unrepresentative misfits in the ‘English Defence League’, it is all too easy to admonish England as ‘gone to the dogs’ but, as they say in these parts, shway shway.

Yes, England has its issues. But name me a country on earth that doesn’t. True, right now with belts-a-tightening and all that, things are looking grim, but Blighty will survive, as she always has.

So, to reach an earth shatteringly dull and obvious conclusion the answer, as ever, lies in moderation and in, dare I say it for fear of appearing grey and dull, in the middle.