Gulf Economic Growth

Source: Internet

By Naveed Qazi | Editor, Globe Up Front

Gulf countries continue to enjoy a sustainable economic growth than the global average, due to a growing surge in oil prices. In 2013 alone, Qatar lead the economic growth in the region, while Kuwait saw the lowest growth. 

Contrarily, when we talk of crude oil prices, it has been the biggest determinant of business and employment. The GCC region in 2014 is vulnerable to a drop in oil prices. As several major international events like Dubai Expo and World Cup are years away and in the construction process, it is uncertain how things will progress and it may further give a rise to inflation. As the currency of high populated countries like India is getting devalued, gulf recruiters may find it hard to recruit employees from western regions. Regional politics like the Arab Spring is affecting the business environment, like Iran's case of lifting of sanctions, that will affect the economy of Gulf countries.

According to Economic Intelligence Unit, the factors which are helping the growth of economies in gulf countries are non- oil and gas sectors, including construction and banking. There is also a growth in the tourism and hospitality sector and the recovery of real estate sector, particularly in the United Arab Emirates. Countries like Oman are spending hefty sums on infrastructure and welfare, while Bahrain is recovering from its political tensions and helping their inclusive oil economy. Saudi Arabia on the other hand, is investing in infrastructure, retail and transport sectors, with a slight dip in oil output. 

When we talk of political developments, Syria and Iraq have been hot-spots for armed conflicts. There also have been public demonstrations in Yemen, industrial disputes in Oman, and a coup in Egypt. All these factors have affected economic growth. However, countries like Qatar and United Arab Emirates are preparing to host major economic events which may likely boost investment and employment. The Dubai Expo 2020 was awarded in November 2013 in UAE which is expected to attract millions of visitors to Dubai and boost business through investment and tourism.  This is the first time that an Expo will be hosted in Middle East. World Cup 2022 is expected to happen in Qatar, and it may drive construction growth in the country.

In terms of job creation, Saudi Arabia leads in the gulf, with over 62% of companies willing to increase headcount, while Bahrain has the lowest rate of job growth. Qatar, on the other hand, has a lower rate of job creation compared to 2012, as projects are entering into execution phase, and due to country's recent leadership succession.

The impact of Arab Spring has been such that visa restrictions against the Arab expats have been increased. Visas for Egyptian, Syrian, Jordanian, and Lebanese candidates frequently get denied for no reason, particularly in UAE, Kuwait and Qatar. Egyptians are looking to work on less salaries. This has created average salary expectation in the market d0wn as they are ready to work for less.

In terms of salaries, Oman enjoys the region's highest pay increase, followed by Saudi Arabia and Qatar. Finance professionals enjoy the highest pay increase, followed by expats working in the construction industry.  Cost of living is highest in UAE and Qatar, followed by Saudi Arabia.

According to a regional survey, Dubai and Abu Dhabi lead in terms of popularity amongst candidates to find work, followed by Doha and Jeddah. The United Arab Emirates is enjoying a huge retention rate, as the overwhelming majority of expatriates wish to stay in the country. Qatar remains the least popular country in terms of that, due to laws which dont allow expats to switch jobs quickly. 


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