Labour reforms will help accelerate private sector employment for Kuwaiti nationals

Titled Increasing Private Sector Employment of Nationals in the GCC; Labour Policy Options to the Rescue, the paper by TICG, a joint company of Oliver Wyman, Kuwait Investment Authority (KIA) and Kuwait Fund for Arabic Economic Development (KFAED), provides insights into pressing labour market issues affecting the GCC economies.

In Kuwait, around 23,000 nationals enter the labour force every year. Historically, close to 80 per cent of them have entered the public sector, favouring the job security it provides, lower working hours and higher entry-level compensation. According to the report, the workforce’s transition into the private sector will reduce the burden of the wage bill, providing the Kuwaiti government with more leeway to reform its economy towards further sector diversification.

“Labour market reform is now a key pillar in Kuwait’s Economic and Financial Sustainability Plan, and we see ample opportunities for Kuwaiti nationals to shift into the private sector through short-term initiatives by the government. Labour market policy affects nationals, businesses and governments, where each party has different and often opposing interests. Sustaining high levels of human capital productivity and a flexible and dynamic labour market, which can adapt to technological change, is fundamental for global economic integration among Kuwaiti Nationals,” said co-author Jeff Youssef, General Manager at TICG and Partner, Oliver Wyman Middle East.

To reduce the pressure exerted on government finances by a large civil servant workforce, there needs to be a concerted effort to transition Kuwaiti nationals to higher private sector employability levels, says the report.

“This requires an extensive and far-reaching reform plan, across the labour market, the economy, and the education system,” added Youssef.

The report emphasises on the significant steps Kuwait and the wider GCC must take to increase the number of nationals in the private sector, in order to lessen their dependency on the public sector.

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