Saudi and Kuwait may fill locals in skilled jobs handled by migrants

Sub : IR

Sec: Places in news

Context:

A recent study examined migrant labour trends in Kuwait and Saudi Arabia, focusing on Indian workers. Published in Structural Change and Economic Dynamics, it analysed current and future employment patterns of migrants in these countries.

Decline in job opportunities:

The study indicates a potential decline in job opportunities for Indian workers in the GCC countries.
The growing trend of upskilling the local workforce in Saudi Arabia and Kuwait may result in the replacement of high-skilled migrant labour with nationals. This could significantly impact Indian workers, who have traditionally filled many of these roles.
Unlike Western countries facing labour shortages, the GCC still has a growing working age population.
The study noted that reliance on expatriate labour for low-skilled jobs will continue unless significant automation is introduced.

Impact on India:

According to the study, this trend presents a medium-to-long-term risk for countries like India as Indian labourers will get replaced in the long term.
A reduction in employment opportunities for Indian workers in GCC countries could affect remittance inflows, which are an important source of income for many families in India.
The Indian government may need to focus on providing employment opportunities for migrant workers in other regions or sectors to mitigate potential job losses in the GCC.

Wage Disparity:

The study found that wages for migrant workers in the GCC are significantly lower than those of native workers.
However, this wage gap is largely due to policy distortions rather than market forces.

Higher Productivity of Migrants:

Despite earning lower wages, migrant workers exhibit higher productivity levels than local workers in both Kuwait and Saudi Arabia. This productivity advantage, combined with lower wages, leads to a notable difference in labour costs between migrant and national workers.
This makes it difficult for firms, especially in the private sector, to replace migrant workers with nationals.