Kuwait’s 4.4% private sector employment sparks concerns

• There are more than 377 thousand Kuwaiti employees in the government, constituting a burden on the state budget and posing a real crisis that may worsen without a radical solution.

• The public sector in Kuwait has hidden unemployment despite job security beliefs; Kuwait relies on foreign workers for productivity.

• Many graduates in Kuwait wait years for jobs, often in unrelated fields, fueling hidden public sector unemployment.

Given the public sector’s limitations in accommodating new job opportunities and the economy’s challenge in employing 300,000 young individuals entering the labor market in the next decade, creating a robust private sector becomes imperative. This sector must actively generate job opportunities for citizens, a feat achievable only with government support. This support can take various forms, including tenders, workforce development, and labor assistance.

The percentage of Kuwaitis working in the private sector, which amounts to only 4.4% of the total number of employees in that sector, reflects shocking and alarming figures. This data indicates citizens’ reluctance to work in the private sector and their preference for government jobs. The total national employment in the private sector stands at about 72.3 thousand employees out of 448.8 thousand citizens working in both the private and public sectors.

The numbers indicate that there are more than 377 thousand Kuwaiti employees in the government, constituting a burden on the state budget and posing a real crisis that may worsen without a radical solution.

Al-Qabas highlighted the private sector’s role in employing Kuwaitis, especially as their percentage in the private sector is shockingly low and does not align with Kuwait Vision 2035. It met with several specialists to discuss this issue.

Huda Al-Baqshi, Director General of the Federation of Kuwaiti Industries, stated, “The industrial sector faces challenges due to inadequate infrastructure and investor support. There has been an exodus to local factories.

The Kuwaiti market is small, projects are stalled, and local products lack preference until factory operations are ensured. Government support is crucial through purchasing local products to sustain Kuwaitis’ wages.”

Al-Baqshi emphasized the need for a dedicated workforce in the private sector, with allowances varying based on the industry. For instance, factory workers receive industry-specific work benefits, highlighting the sector’s limitations in providing extensive benefits due to market constraints.

She further stated, “While the private sector prioritizes Kuwaiti talent, it struggles to match the perks offered by the public sector.”

Al-Baqshi confirmed that the government sector faces hidden unemployment due to the societal belief that it offers unlimited job security. Moreover, there’s a lack of accountability, evaluation, and a reward/punishment system for distinguishing between productive and unproductive employees.

She explained that Kuwait doesn’t suffer from unemployment or a shortage of job opportunities; however, there’s a reliance on foreign workers for productivity. Additionally, societal norms hinder Kuwaitis from taking up technical roles, often deeming them unfit for their capabilities. This cultural legacy limits Kuwaitis to specific sectors while avoiding others.

Al-Baqshi added, “The absence of a clear plan and strategy guiding young individuals towards specific technical roles in the private sector has resulted in disguised unemployment within the public sector.” She elaborated, “The remedy lies in crafting job descriptions and recruiting personnel based on sector-specific requirements, and reforming the state’s policies regarding appointments and assessing job seekers. It’s unreasonable to hire a Kuwaiti solely because of their nationality.”

Government support

Secretary-General of the Kuwait Insurance Federation, Adel Al-Rumaih, mentioned, “Working in the private sector is challenging due to contractual obligations. Young people entering this sector must meet these challenges and achieve set goals amid stiff competition, as evidenced by successful Kuwaiti youth working in local and international companies.”

Al-Rumaih emphasized that government entities should prioritize employing Kuwaiti youth, particularly those with unique skills. He stressed the importance of aligning educational programs with labor market needs, focusing on practical skills such as applications and artificial intelligence.

He added, “Laws must be enacted to promote nationalization and ensure stability in this sector.”

He stressed the need for the government to support the private sector in expanding the employment of Kuwaiti youth. He pointed out that government support should be contingent on companies’ performance and their ability to employ citizens.

He continued, “As a union, we communicate with the Public Authority for Manpower to train graduates seeking employment for specific jobs that insurance companies require, such as internal auditing and risk management.”

Labor market imbalances

Dr. Shamlan Al-Bahr, Professor of Economics at Kuwait University, highlighted the labor market’s imbalance with education and the economy’s lack of diversification causing disguised unemployment. He criticized the state’s persistent unsustainable policies since the 1960s, leading to government employment being the sole means for citizens to access wealth distribution.

Al-Bahr noted disguised unemployment in the private sector, citing the creation of fake jobs for labor support. He attributed this to government sector slackness, hiring beyond necessity, resulting in unnecessary employees and bureaucratic issues.

Al-Bahr added, “The private sector’s inability to create job opportunities is due to Kuwait’s lack of economic diversification, leading to disguised unemployment.” He noted that government policies lack incentives for the private sector to rely more on local labor, as subsidies and tenders aren’t tied to economic diversification or national employment goals.

Al-Bahr continued, “A significant disparity exists between the public and private sectors. The public sector offers attractive benefits like vacations and working hours, leading citizens to prefer government jobs over private ones.”

He highlighted that the Civil Service Commission treats university graduates equally, without prioritizing exceptional graduates.

Productive economy

Saleh Al-Sulami, Chairman of the Board of Directors of the Union of Investment Companies, stated that when the Kuwaiti Constitution was drafted in 1961, the Kuwaiti population was significantly smaller compared to the present.

Article 41, which guaranteed the right to work and choose one’s profession for every Kuwaiti, was commendable at the time. However, with 62 years having passed since the constitution’s inception, Al-Sulami suggested that the article should be amended as per the constitution’s explanatory memorandum. This memorandum mandates a revision of the constitution every five years to enhance freedoms and rectify existing shortcomings.

He added, “The solution lies in Kuwait’s transition from a rentier economy to a productive one.” He explained that the government’s practice of hiring excessively and providing salaries without regard for productivity has resulted in political hegemony and increased disguised unemployment, which is counterproductive.

Economic power

Observers noted Kuwait’s robust economy and exceptional young workforce, earning Kuwaitis the moniker “market makers” in some Gulf sectors. This underscores Kuwaiti society’s maturity and modernity, evident in projects originating from Kuwait and expanding regionally and globally.

They urged the government to allocate productive industrial lands fairly to Kuwaiti youth, avoiding nepotism and favoritism seen in past land distributions. This move would significantly boost job creation and drive economic growth.

Their conclusion stated, “The private sector boasts numerous projects across real estate, industry, logistics, banking, investment, and restaurant management, which have distinguished Kuwait with their contributions to the Arab world. This highlights the diverse opportunities available to young people across various sectors.”

20,000 Kuwaitis enter labor market annually

Al-Bahr stated that in the next 15 years, the bloated government sector needs to create two-thirds of its current jobs, adding to the challenge as 20,000 Kuwaitis enter the labor market annually, a third of the current private sector jobs, showing the private sector’s inability to address this issue.

Difficulty recruiting

Al-Sulami emphasized that hiring every Kuwaiti is a mistake, given the state’s struggle to ensure jobs for all citizens. He noted that many graduates wait years for employment, often in unrelated fields, fueling hidden unemployment in the public sector.

Solutions to eliminate disguised unemployment

Al-Baqshi said that the solution to eliminating disguised unemployment begins with:

1. Applying the strategic alternative, unifying the salary ceiling for all state institutions. This creates a state of balance and stability for recent graduates.
2. Applying the principle of reward and punishment, eliminating current employees who are not performing well, and retaining only the best.
3. The state’s hiring policy should be revised, including changing legislation that prevents the dismissal of non-compliant and reckless employees.
4. Develop job descriptions for each employee.
5. Divide working hours into different shifts and offer evening services to boost employee productivity.