World Economy

Cushy Government Jobs Over in (P)GCC States

In May oil workers in Kuwait went on strike against a proposed overhaul of the public sector payroll system.In May oil workers in Kuwait went on strike against a proposed overhaul of the public sector payroll system.

Ahmed, a Qatari civil servant, used to arrive at his office at a government ministry in Doha late in the morning and leave for home after lunch, collecting a monthly salary of 40,000 riyals ($11,000) and a generous housing and travel allowance.

But last month a government official made a surprise spot check on the ministry’s offices and found dozens of employees absent, Reuters reported.

“Punctuality is a duty,” said a letter Ahmed received from the minister’s office. “Qatar expects the best of its citizens.”

For a country whose tiny population is the world’s wealthiest per capita and which sits upon its largest natural gas reserves, increasing the productivity of its 90,000 public employees might seem like a needless task.

But it is part of a trend across the six (Persian) Gulf Cooperation Council Arab states (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman) as economies there try to lessen the burden of costly public sectors.

Arab states have for decades used their energy wealth to provide millions of citizens with cushy government jobs, part of a social contract by rulers that rewards political acquiescence and educational attainment with employment for life.

But high-paying public sector jobs that demand little of workers have led to bureaucratic inertia and an absenteeism culture that governments turned a blind eye to during the (Persian) Gulf’s boom years.

In 2011 a Kuwait government report found that half the country’s state employees were absent from work between January and March, costing the country’s treasury more than 10.5 million dinars ($35 million).

Since oil prices plunged in 2014, however, Arab monarchies have curbed subsidies and laid off staff as they try to trim budget deficits and build economies less reliant on hydrocarbons.

In the wealthier (P)GCC countries of Kuwait, Qatar and the United Arab Emirates, where populations are small, more than 75% of employed nationals work in the public sector, according to the IMF.

The ratio is also high in oil-giant Saudi Arabia—which racked up a record budget deficit of nearly $100 billion last year—while in Oman, about 50% of employed nationals work in the public sector.

Bahrain has the lowest proportion of nationals working in the public sector, at 35%.

 Shake Up Time

In one of the most dramatic efforts to shake government agencies out of their slumber, the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, carried out an early morning spot check on the city state’s management in August, found empty desks, and sacked nine senior officials.

Qatar, in an apparent effort to codify the responsibilities of government employees and get them working harder, last month passed a law that raised pay for workers who have achieved higher levels of education and enforced a merit-based promotion scheme.

The nation’s young emir has warned citizens that the state “can no longer provide for everything” and local newspaper editorials mock lazy civil servants referred to jokingly by Qataris as “people of the couch”.

Neighboring Saudi Arabia in September scaled back financial perks for public sector employees in one of the most drastic measures yet by the oil-rich kingdom to save money at a time of low oil prices.

But today austerity is unnerving citizens for whom affluence and stellar growth are the norm.

Reforms are proving sensitive—politically consequential even—and there are fears that further cuts to sumptuous welfare states could heighten public anger.

In May oil workers in Kuwait went on strike against a proposed overhaul of the public sector payroll system. An election last month filled the country’s parliament with opposition lawmakers opposed to wage cuts and taxes.

Omani medics from state-funded colleges in November held a two-week strike after their salaries were cut.

Ending the legacy of public sectors being an engine of job creation, analysts say, is vital to avoid rising unemployment in years ahead if oil revenues decline again and nationals are still not working in the private sector.

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