Paid to do noth­ing A ghost army of work­ers in the Gulf

Huge pub­lic wage bills a del­i­cate dilemma for Arab rulers

Sunday Times - - Careers -

● Show up, swipe in. The rou­tine is fa­mil­iar to of­fice work­ers ev­ery­where. In Kuwait, it proved too much to ask.

Last year, try­ing to trim a wage bill that eats up more than half its bud­get, the gov­ern­ment re­quired pub­lic em­ploy­ees to check in on a bio­met­ric reader ev­ery day. The next quar­ter, 5 000 quit. Many of them rarely if ever turned up, and feared they’d be caught un­der the new rule, ac­cord­ing to Khal­ifa Ha­mada, the un­der­sec­re­tary at Kuwait’s Fi­nance Min­istry.

All Per­sian Gulf monar­chies have some ver­sion of this prob­lem. Gov­ern­ment is the em­ployer of first re­sort — even when it has noth­ing much for its em­ploy­ees to do. That’s part of a tacit agree­ment: ci­ti­zens may not get a say in how their coun­tries are run, but at least the rul­ing fam­i­lies look af­ter them.

Now, af­ter years of lower crude prices, and aware that the oil will run out one day, rulers are seek­ing to re­pair pub­lic fi­nances. The wage bill is an ob­vi­ous place to start. But it’s be­come a kind of third rail, only ap­proached at high po­lit­i­cal risk.

The his­tor­i­cal guar­an­tee of gov­ern­ment jobs “is be­com­ing un­ten­able”, said St­ef­fen Her­tog, a pro­fes­sor at the Lon­don School of Eco­nom­ics. At the same time, he said, “touch­ing the pub­lic pay­roll means tin­ker­ing with the core of the Gulf so­cial con­tract”.

The dilemma is es­pe­cially acute in Saudi Ara­bia. The gov­ern­ment, which em­ploys about two-thirds of ci­ti­zens who work, is chip­ping away at a bud­get deficit that bal­looned to al­most 16% of GDP af­ter the oil shock of 2014.

About 70% of Saudis are be­low the age of 30 and some 1.2 mil­lion will have joined the work­force by 2022. Un­der Crown Prince Mo­hammed Bin Sal­man’s post-oil plan, job cre­ation should fall to the pri­vate sec­tor.

Like other Gulf rulers, he be­gan his cost­cut­ting drive by scal­ing back in­vest­ment projects. Next were sub­si­dies for fuel and util­i­ties, while VAT was also im­posed. But when he took aim at state-em­ployee al­lowances, he had to make a U-turn a few months later. He gave them a monthly $266 (about R3 650) cost-of-liv­ing award — eras­ing sav­ings achieved else­where.

And those Saudi civil ser­vants aren’t nec­es­sar­ily busier than their Kuwaiti peers.

One em­ployee at a Saudi min­istry, who asked not to be named, says her boss has been on an un­of­fi­cial three-day week for years, and didn’t change that even when swip­ing-in was man­dated.

When a min­is­ter vis­ited her depart­ment, sev­eral peo­ple she’d never seen be­fore turned up for work.

Track­ing tech­nolo­gies like fin­ger­print­ing, swipe-cards and cam­eras can iden­tify these “ghost work­ers”. But such meth­ods won’t help elim­i­nate jobs whose hold­ers are fine to show up ev­ery day — but have lit­tle to do. Nor will they ad­dress the fun­da­men­tal dis­tor­tions in Gulf labour mar­kets.

Many grad­u­ates have been happy to re­buff pri­vate com­pa­nies and wait for a gov­ern­ment open­ing, while lower-paid, pri­vate jobs are mostly taken by for­eign­ers.

Gulf gov­ern­ments have been try­ing to change this. The Saudis, for ex­am­ple, have forced com­pa­nies to em­ploy more lo­cals, banned ex­pat work­ers in some in­dus­tries, and in­tro­duced taxes on them and their de­pen­dants. But push­ing for­eign­ers out could just re­sult in lower em­ploy­ment. Many busi­nesses would go bust if they had to take on a lo­cal, at pay rates com­pet­i­tive with gov­ern­ment work, to re­place each for­eigner.

What’s more, belt-tight­en­ing by gov­ern­ments — es­pe­cially on in­vest­ment projects —

Touch­ing the pub­lic pay­roll means tin­ker­ing with the so­cial con­tract

St­ef­fen Her­tog

Pro­fes­sor at the Lon­don School of Eco­nom­ics

has slowed job cre­ation in pri­vate sec­tors that are still largely state-driven (Dubai is a par­tial ex­cep­tion).

Nader Kab­bani, di­rec­tor of re­search at the Brook­ings Doha Cen­tre in Qatar, said these regimes needed to “al­low ci­ti­zens to ac­cess the coun­tries’ wealth in ways other than jobs”. He cited Alaska, where a state fund dis­trib­utes oil prof­its among res­i­dents.

Pro­pos­als for a uni­ver­sal ba­sic in­come have gained ground even in coun­tries like Italy that don’t have en­ergy riches to fi­nance it. In the Gulf, Kab­bani said, Kuwait — the most demo­cratic of the monar­chies — would be the best place to start. “The prob­lem is, this con­ver­sa­tion isn’t hap­pen­ing.”

Pic­ture: Reuters

The Saudi gov­ern­ment em­ploys about two-thirds of ci­ti­zens who work.

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