Economists in response to what was published yesterday, under the title ‘316,700 expatriates failed to renew their residence permits’ say this situation has seriously affected the investment property in terms of proceeds from rents and several apartments lying vacant all over the country.
This is in addition to hurting the consumer activity and to a large extent has the impact on the local market — retail markets, cooperative societies, central markets, shops and clothing stores, restaurants, cafés and other outlets.
Some expect the replacement of these workers with others or the return of some of them on new visas to meet the needs of the market, especially contractors and some companies, while some believe that the impact of the ‘fall in the number of residence permits’ is determined by the extent of the market needs in their respective trades, and that there may be a great demand for an AC technician, for example, compared to a company manager, or other professions.
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 while they were unable to return 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.
Al-Ghanim told Al-Anba that this negative impact is self-evident, especially that there has been an expansion that took place years ago, which is currently offset by a contraction. He said a testimony of this is the drop in apartment occupancy.
Former Dean of the College of Commerce, Economics and Political Science at Kuwait University, Dr. Sadiq Al-Bassam said that the fall in the large numbers of expatriate workers’ residencies 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.
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 varies 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 that the cost of the livelihood of this segment is small and does not represent a large percentage of the total income.
Al-Sumait added, “The majority of companies, during the Covid 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, noting that the companies did not dispense with their effective elements, but rather kept them and renewed their residency.”
He pointed out that the economic sectors were affected, but in a slight way, for example, the real estate sector, which witnessed a decline in the rental value of apartments and commercial units, especially after 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 on the list of factors which 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.”