The coronavirus pandemic and energy market outlook threaten to exacerbate long-standing issues confronting Gulf labor markets. Bloated public sectors continue to employ a disproportionately large number of working-age citizens. Meanwhile, the private sector relies upon an abundance of low-cost, expatriate labor to remain profitable and compete on a global scale. Labor-related immigration from South Asian countries, in particular, plays a crucial role in the demographic composition of Gulf Arab states, which serve as major sources of global remittances. Government officials across the region also view expatriate residents and their employers as a means to generate non-oil revenue and advance economic diversification.
Balancing the socioeconomic concerns of citizens against the commercial advantages of immigration will continue to challenge Gulf Arab states. What labor market interventions have regional governments enacted to mitigate the economic impact of the coronavirus outbreak? How are regulatory changes likely to impact citizens and expatriates differently? How are key industries adapting to the economic crises confronting the region? What measures are being put in place to protect low-income, expatriate laborers? And how are global remittance flows likely to be reconfigured as a result of newfound economic challenges in the Gulf?
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