Kuwait Vision 2035 calls for a greater involvement of the private sector in the economy and in creating new jobs for nationals. However, new statistics reveal that the number of employees, both citizens and expatriates, joining the private sector has been falling steadily in the last couple of years.
In its latest report to the National Assembly, the Ministry of State for Economic Affairs disclosed that the private sector has been failing to attract workers over the last many years. The report showed that there are currently around 1.7 million workers in the private sector and that the number of new entrants has been falling steadily. In 2016, around 100,000 expatriates newly joined the private sector, in 2017 only 86,000 foreigners joined the sector, in 2018 the number fell still further to 33,000 and so far this year, only 24,000 have joined the private sector.
Despite Kuwaitization and emphasis on hiring Kuwaitis in private sector, the fall in number of expatriates recruited to the private sector was not compensated by a corresponding increase in the number of nationals opting for private sector employment. In fact, according to the available figures, the number of citizens working in the private sector fell from 72,549 in 2018 to 71,013 in 2019. Apparently, the government’s push to have more citizens join the private sector is not having the desired result — a total of 1,539 Kuwaitis ended up leaving the private sector in just one year.
The reasons for private sector failing to attract employees are manifold. In the case of expatriates, the main reason is the decline in economic activity over the last many years, which has led to large scale retrenchments, salary cuts, and fall in offered pay scales. In addition, the government’s decision to cut subsidies on utilities and impose higher charges on most services has led to a rise in cost of living for the average foreigner in the country. Consequently, many expatriates have decided to either leave the country or at least send their families away.
In the case of Kuwaitis, the private sector has traditionally failed to provide them with an equivalent pay scale or perquisites offered by the public sector. Many Kuwaitis choose to sit at home without work while waiting for a vacancy in the public sector, rather than join the private sector.