Economists and citizens voiced different views on the economic impact of tens of thousands of expatriates who have had their residence permits rescinded, due to their inability to renew them on time.
The opinions were based on recent media reports which cited the Ministry of Interior as saying that 316,700 expatriates did not, or were unable to, renew their residence permits. While some people said the sharp decrease in such a large number of expatriates would impact various segments of the economy, others voiced the view that many of those who failed to renew their residency permits were marginal workers, whose impact on the economy would only be marginal.
Those who said the economy was badly affected pointed to the repercussions being felt on the residential and commercial property markets, as well as on the retail sector, including cooperative societies, central markets, shops and clothing stores, restaurants, cafés and other outlets.
Real estate expert, Qais Al-Ghanim, said the large numbers of expatriate workers in the country, who were unable to return to the country because their residence permits expired due to restrictions imposed on travel by the COVID-19 pandemic, will harm many sectors, whether real estate, commercial, consumer movement and various other economic sectors in general.
Former dean of the College of Commerce, Economics and Political Science at Kuwait University, Dr. Sadiq Al-Bassam opined that the large fall in numbers of expatriate workers in the country negatively affected all economic sectors, noting that the ‘employment’ is an important segment of the Kuwaiti population. He pointed out that the fall of these residence permits resulted in a rise in the price of labor, and in turn, a decline in apartment prices due to the lack of demand versus supply.
For his part, the former minister of Housing and former member of the board of directors of the Kuwait Petroleum Corporation, Yahya Al-Sumait, said the expected impact of the residency of thousands of residents to vary according to the type of workers who left the country, pointing out that marginal employment will not affect in any way the economic system, especially given that the cost of the livelihood of this segment is small and does not represent a large percentage of the total income.
He added that the majority of companies, during the COVID-19 crisis, were unable to pay the salaries of employees, forcing them to lay off their employees, especially those who did not greatly influence the performance of the institution. At the same time these companies did not dispense with their essential and effective workers, but rather kept them and renewed their residency.
He agreed that some economic sectors were affected to a limited extent, such as the real estate sector, which witnessed a decline in the rental value of apartments and commercial units following the exit of a large number of companies from the market. He said that the exit of a large number of resident families from the country was also a factor that affected the decrease in the value of monthly rents.
For his part, Deputy Chairman of the Board of Directors of Arabi Holding Company Hamed Al-Bassam said that the exit of expatriate workers from the Kuwaiti market during the past period will not have any effect, especially if the labor was unproductive and violators of residence laws in the country.
Al-Bassam added, by saying: “The exit of unproductive workers from the labor market will not leave any impact on the economy, as I see that the market will witness a sifting process that will reflect positively, and that the nation’s interest is more important than the interest of traders and stakeholders.”
