Pakistan’s challenges in cashing in on changing GCC workforce demands
Pakistan and Saudi Arabia are finally building geoeconomic and geostrategic bridges beyond the China-Pakistan Economic Corridor that were previously not high on the bilateral agenda. Alongside the Saudi surge as a geopolitical and geoeconomic power beyond its Arab hinterland, the country is also going through a complex transformation that is unprecedented.
Vision 2030, which was launched in 2016, aspires to diversify the Saudi economy beyond its current heavy reliance on oil and enhance the local workforce, thus potentially reducing imports of labor, and become a cultural and technological hub.
It is estimated that Saudi Arabia will need 2.2 million private-sector jobs by 2025 to reach full employment.
Besides the ever-growing property sector, a variety of measures for economic diversification — including the promotion of tourism through an e-visa for visitors — will create jobs in sectors ranging from services to industry. The focus of economic diversification remains finding employment for the Saudi youth.
It is estimated that the mining sector alone, which was prioritized in Vision 2030, will create more than 100,000 jobs. Various technical studies have confirmed reserves of uranium, gold, silver, aluminum, iron and phosphate.
In an era of protectionism and reform, Saudi Arabia aspires to stem the outward flow of capital. The Kingdom hopes to reduce by $10 billion the drain of remittances sent overseas. Currently, this remittance outflow totals more than $32 billion a year, sent by 12 million migrant workers to their home countries.
In the past year, hundreds of Pakistanis have returned home for good. Remittances to manpower-exporting nations from the Gulf Cooperation Council countries have been falling since 2017 and this decline will not end any time soon. In the second quarter of the current fiscal year, remittances fell by $8.2 billion, as workers’ wages have not increased to match rising prices, according to market-research reports.
Jadwa Investment, a premier investment-management and advisory firm in Riyadh, noted in a study in November 2017 that outward money transfers by foreign workers had fallen to their lowest levels in four years. While low-paid domestic workers might not be vulnerable to losing their jobs, the increasing cost of living will surely reduce their monthly savings.
Pakistan must focus on enhancing the number and quality of graduates in the fields of mineral exploration beyond oil and gas.
Though normalizing oil prices and increases in Saudi production are helping to replenish the country’s capital reserves, rising defense expenditure limit its fiscal liberty. Friendly countries such as Pakistan therefore have an opportunity to benefit from the Kingdom’s vision by investing in long-term, high-value ventures such as mineral exploration, oil pipelines, refineries and massive storage depots.
During his maiden visit to Riyadh, Pakistani Prime Minister Imran Khan pleaded the case for increasing imports of manpower to the kingdom. The Saudi leadership has been largely responsive to this, with details due to be finalized in October. The construction sector will continue to consume manpower, though increasing imports of automated machinery means a reduced need for manual labor. Meanwhile, plane-loads of Chinese workers are arriving in the country for jobs local workers could easily perform. Khan’s PTI government must also, therefore, negotiate with Beijing to limit its exports of manpower for CPEC-related projects.
If the prime minister wants to smartly address the problem of unemployed youth in Pakistan, urgent and radical measures need to be set in motion. Islamabad must invest in vocational training and grooming schools if workers are to succeed in a competitive job market. With the peak era of the manual labor force over, the fruits of intensive technical training, with good Arabic and English proficiency, could start to emerge within three years.
Quality control in Pakistani educational institutions is expected to improve under the leadership of Higher Education Commission Chairman Dr Tariq Banuri. The Pakistani workforce not only lags in technological know-how, but university graduates also lack fluency in foreign languages and a requisite emotional quotient. The country’s colleges and universities send young graduates out without the necessary personal skills such as communication, writing and managing stress in the workplace.
Pakistan must focus on enhancing the number and quality of graduates in the fields of mineral exploration beyond oil and gas. This is as much of a need for resource-diversifying GCC economies as it is for its own.
• Naveed Ahmad is an investigative journalist and academic based in the GCC with a career in writing on diplomacy, security and governance. Besides other honors, he won the Jefferson Fellowship in 2000 and the UNAOC Cross-Cultural Reporting Award in 2010. Twitter: @naveed360