Global crisis may block GCC nationalisation drive

Ambitious job nationalisation plans by Gulf oil producers could become the latest victim of the global financial turbulence as private sector retrenchment policies would scare off citizens, according to a key Kuwaiti bank.

Nationals in the six-member Gulf Co-operation Council (GCC) already prefer working in the public sector and any plans by governments to accommodate their fast-growing numbers mean a further enlargement in the public sector, which runs against stated objectives of expanding the private sector role in the economy, the National Bank of Kuwait (NBK) said.

“With the ongoing discharge of workers taking place in the GCC private sector, it is feared the existing preference of nationals for public sector employment will gain momentum, putting recent gains at risk,” it said. To prevent this, serious measures are required to restore confidence in the private sector,” NBK said in a study, referring to progress made by GCC countries in job nationalisation through setting quotas in the private sector.

Several companies in the GCC have been reported to have sacked employees or have plans to sharply cut their workforce within a new retrenchment strategy triggered by the global crisis.

Emirates Business 24/7