UAE, Saudi Arabia crack the code on development and job creation

By Business Reporter
There is a direct correlation between development and employment rates, which typically moves inversely to that with unemployment rates. Enhanced development curtails unemployment numbers, which explains why joblessness rates fluctuate over time within the same country and differ across countries.
Nations with precisely implemented development programs usually maintain healthier employment rates, and which is independent of their natural resource wealth. Conversely, the lack or inadequacy of such projects results in heightened unemployment, leading up to a crisis of economic and living standards.
The Gulf’s experience provides a valuable lesson in development and labour market dynamics. Between the 1970s to mid-90s, GCC countries embarked on extensive development and infrastructure projects. These spanned various disciplines and professions, necessitating the recruitment of a significant number of foreign workers due to a notable shortage of local manpower. The massive influx of foreign labor was crucial to meet the swift development demands of that period, fueled by substantial increase in oil revenues.
UAE shows the way on job creation
As the new millennium unfolded, variations in economic expansion and the execution of strategic projects led to differing unemployment rates among countries, highlighting the need to examine the successful strategies of nations that minimised unemployment through effective project implementation. It’s crucial first to address a more pressing matter concerning the types of projects and their contributions to the local economy.
Published data from GCC countries show commendable growth in GDP, including contributions from non-oil sectors, underscoring the significance of diversification. Yet, the nature of this growth varies, with some nations witnessing a surge in their manufacturing and advanced technology. These sectors offer substantial employment opportunities by harnessing the synergy of knowledge-based tangible and intangible outputs.
Conversely, this momentum appears to taper off in other nations, particularly as the services sector, including financial services, increasingly leans on technological solutions. It has led to the shuttering of numerous bank branches and a reduction in available jobs within the sector.
When it comes to advancing the physical production sector alongside cutting-edge technologies, the UAE and Saudi Arabia have emerged as trailblazers. Over the past decade, they have undertaken significant projects in industrial, renewable energy, and technology, resulting in a notable increase in the material economy’s contribution to GDP and creation of hundreds of thousands of jobs. Consequently, unemployment rates have plummeted to a minimum in the UAE.
Similarly, Saudi Arabia has achieved remarkable strides, with unemployment dropping from 14 per cent to 4.9 per cent for Saudis and non-Saudis over the past seven years. Moreover, women’s participation in the labour market has surged from 15 per cent to 38 per cent.
Saudi Arabia’s impresses having women in jobs
The ILO praised the shift by saying: “Saudi Arabia has made impressive progress on women’s participation in the workforce. This transformation is ongoing, with the private sector playing a pivotal role in employing manpower after being provided with conducive conditions for its activities. This has contributed to curbing the bloating of administrative apparatus in these countries.”
These two innovative experiences from the Gulf offer valuable lessons applicable not just regionally but also internationally, demonstrating that merely enhancing economic value is not significantly effective in creating job opportunities.
To effectively tackle this challenge, it’s imperative to focus on developing the material economy by integrating production with knowledge, enhancing worker qualifications, fostering innovation, and promoting scientific research.
Fortunately, all GCC countries possess the necessary capabilities to implement these development strategies, which not only attract investments but also stimulate both local and foreign private sectors.
Leveraging the advanced infrastructure established over past decades can further support these efforts, particularly in reducing unemployment rates and creating more job opportunities. Ultimately, economic expansion remains the most viable solution to this dilemma.