Monday, December 08, 2014

How the Economy of Kuwait Correlates to Foreigners: Anonymous 6:12

So I have a very long-winded response to someone who commented on the 5-year Residency Bill post below.  (And thank you for commenting, Anonymous 6:12, because it got me thinking a lot.) My response is far too long to place in the comments section, so I am posting his/her comment first, followed by my response.  S

Anonymous said...

The proposal will only affect low-skilled migrant workers with an inadequate level of education and poor literacy rate.

Kuwait is not trying to emulate the economies of UAE and Qatar. The UAE and Qatar do not have sustainable economies. Expats are 90% of the populations of UAE and Qatar. Qataris and Emiratis work in the public sector more than Kuwaitis work in the public sector. Do you have any idea how unsustainable that is?

Kuwait is not the UAE/Qatar and any comparison between those countries is invalid for the following reasons:

1. 60% of Kuwait's population is Arab (including Arab expats). Kuwait's population has always been predominantly Arab in its composition whereas most people in the UAE and Qatar are non-Arabs (South Asian migrant workers).

2. Kuwait has suffered from extensive terrorist attacks and war. The UAE and Qatar were never victims of terrorism and war. In the 1980s, many terror groups bombed various part sof Kuwait, hijacked Kuwaiti planes, kidnapped Al-Sabah sheikhs and attempted to assassinate Emir Jaber via suicide bombings. Then in 1990, Iraq invaded Kuwait and obliterated Kuwait's infrastructure. Kuwait's infrastructure megaprojects were postponed for 10 years until Saddam's fall because what's the point in building amazing infrastructure if it's going to get bombed by Iraq again? Saddam threatened to invade Kuwait many times up until his death.

3. In the 1960s, 1970s and 1980s, Kuwait was the most developed and most advanced country in the Gulf region and Middle East. In the 1960s, 1970s and 1980s, Kuwaitis were usually 40% of the total population. Right now, Kuwaitis are only 30% of the total population and Kuwait is deteriorating. This means that an increase in expat population is not positively correlated to Kuwait's development, it only makes things worse because Kuwait City was not built to accommodate 4 million people. Kuwait City is overpopulated. The rapid rise in the expat population was not meant to happen, it happened because of the recent Arab Spring and illegal visa trafficking. Emiratis and Qataris have always been 10%-15% of their country's total populations. Kuwaitis are usually 40% of the total population.

4. Kuwait's economy is structured differently from the economies of the UAE and Qatar - and that's a good thing. Kuwait's economy has always been structured differently from the economies of the UAE and Qatar, before the Gulf War Kuwait was making great strides in economic diversification. Everything went downhill after the Gulf War but Kuwait is currently experiencing a renewed period of growth and the projects market is rapidly rising.

December 7, 2014 at 6:12 PM

First, I thought this was very well-written.

But next:  I haven’t seen or heard anything that states that this bill refers to low-paid and/or uneducated workers.  From everything I have heard, it applies to all – including people in professional jobs that are long-term residents of Kuwait.  If you could help clarify this point and cite references, I would really appreciate it because honestly, it would set my mind at ease; and most likely keep me for looking at houses during my Christmas vacation in the States.  I would rather be drinking eggnog, kicking back with my family in front of the fire.

Ok, here goes my incredibly long-winded reply:

While I agree with you in some ways (yes, Kuwait has been the target of terrorist attacks and an invasion), I disagree in others.

The US (and other countries, but I’m American so let me give you a few examples from my own country) has had several very large terrorist attacks in history (a presidential assassination, several other attempts..), but American people (which were all formerly foreigners from other countries, unless they are native American Indians) have UNITED numerous times throughout history and rebuilt and become stronger.    After Pearl Harbor - no problem rebuilding and strengthening the economy after a war that depleted most resources. Americans united for a cause.   US after 9/11 - again, rebuilt and it didn't affect our economy. It unified people into a common cause that many Americans were willing to fight and give their lives for.  (Regardless if you believe that the war was about oil or not, people I knew believed in doing the right thing and were willing to sacrifice for it).

Yes, Kuwait started rebuilding after 2003 when Saddam was ousted, but it has been a slow, cumbersome, and frustrating process with a distinct lack of emphasis on urban planning:  Very large buildings and skyscrapers are still being built without regulations for underground parking, for example. Traffic circles – that add to the traffic problem – have been replaced by more traffic circles.  There is no safe, clean public transportation.  There are no HOV (high occupancy vehicle) lanes on the highways.  Problems are TALKED ABOUT but rarely resolved.  Rather than fixing, people blame others.

The people of Kuwait are not unified. That was lost around the time of the Invasion.  Without national unity and pride, not much is going to be accomplished by the citizens.  (People don’t TALK about the Invasion of Kuwait.  Kuwaiti children are not taught about it in school – there is nothing to UNIFY them for a cause.)   You don’t hear most Americans say, “I’m Irish” or “I’m Polish” or “I’m Indian” or “I’m Bangladeshi”.  Because of the unity and the rights that the country has offered them, they state, “I’m American.”  In Kuwait, what is it, “Bedu” “Hather” “Shiite” “Sunni”…  There are divisions within Kuwaiti society themselves.  And almost every public address in Kuwait stresses Unity (but laws – like this one - are not being drafted to reflect that). 

Now there are potential terror threats to Kuwait (ISIS/DAESH) and rather than unifying people together to fight against it, very little is said in the national media.  Unite and do something about it.

If people LOVE Kuwait (as I do), allow them to love the country and be at peace here.  I would love to buy property here.  Allow foreigners (many who consider themselves adopted Kuwaitis as I do)  to stay and do good for the country.  Allow them to bring their families and be proud to be (at least) a resident of Kuwait.  What is the difference between me and a low-paid worker who has resided here for many years (as long as that person is not held here through indentured servitude)?  Wouldn’t it be possible for that person to love Kuwait as much as I do?

Your point #3 is mute as Kuwait could have chosen to continue on the same path of PROGRESS. And during those years (60-early 80’s), alcohol was legal in Kuwait and there was actually a tourist industry in the country. Boosting the economy – and foreigners were welcome. 

Let’s not forget that the economy of Kuwait was largely built on trade with foreigners.  In fact, the national currency of Kuwait was previously the Indian Rupee.  Foreigners were welcomed then (and there was actually a level of hospitality and goodwill) and get this - the economy did well.  Foreigners helped Kuwaitis find oil.  Imagine that.  Low-paid workers worked in the oilfields and even assisted in putting out fires started by Saddam.  

There is so much PRIDE in what foreigners have accomplished here.  And why not cultivate that pride and unity to develop Kuwait's economy?

As for Kuwait's megaprojects being halted for 10 years until Saddam was out of power:  That just isn't true because most of those megaprojects were developed only within the past 10 years.  And most are still stagnant.

6:12 said, "The rapid rise in the expat population was not meant to happen, it happened because of the recent Arab Spring and illegal visa trafficking."  Mmmmm... no.  The rise in the expat population has blossomed since 2003, when people felt it was safe again to return to Kuwait.  Kuwait was witnessing an economic boom - not only because Kuwaitis were re-investing in their own country, but because there were very large military contracts in Kuwait.  In order to accommodate the massive influx of Western expats, real estate developers built more apartments (and depended on labor to do that).  Large real estate projects started and most of the skyline of Kuwait today developed between 2003 and 2006.  Who worked on those projects?  Foreign labor.  Sevice and commodity industries also did well.   I certainly don't believe that the Arab Spring had anything to do with it and I think that illegal visa trafficking had only a minimal affect on how many foreigners came to Kuwait.  People (of all classes) came here because Kuwait was re-opened for business after the threat of Saddam no longer loomed and Kuwait sprung up from 5 story buildings to 50.

6:12 stated, "This means that an increase in expat population is not positively correlated to Kuwait's development, it only makes things worse because Kuwait City was not built to accommodate 4 million people.  Kuwait City is overpopulated. "  Well, you got me there, because most cities globally are expanding.  Kuwait is not alone.  If real estate prices were regulated in Kuwait, perhaps Kuwaitis could afford to buy homes further away from the city (which only makes up an area of 1/3 of the country).  If every Kuwaiti household had to pay minimum wage for a driver and maid, it would limit the number of cars on the roads and/or foreigners.   If proper labor housing areas were established then Kuwait City would not be overpopulated.  (Seems like there is a whole lot of desert out there.) Again, this relates to urban planning, not a problem of foreigners in the country.  You don't blame the worker if he's not being properly managed.  Blame the management.

6:12, you also stated that,  "Qataris and Emiratis work in the public sector more than Kuwaitis work in the public sector. Do you have any idea how unsustainable that is?"  I disagree.  (From my personal experience), both Qataris and Emiratis working in the public sector  have a work ethic and develop their countries - side-by-side, if I might add with who?  Foreigners.  However, your thought process validates my next paragraph.

Of note is that everything you have stated that is positive to the Kuwaiti economy was in the past. That's just it - in.the.past. Nothing now. No amount of foreigners is going to change the complacent mindset. No amount of foreigners are going to ruin the economy (many other countries are melting pots of cultures, religions, races and classes just as Kuwait is now, so I don't find your argument valid).  It is a mindset.  An attitude.  It is pervasive here:  IF many Kuwaitis chose to work hard with a dedicated work ethic (like their forefathers who were fisherman, pearl divers, tradesmen and herders) in their own country (instead of investing outside – like in Dubai, for example!), Kuwait would flourish with Kuwaiti manpower. I don't see that happening in the near future.  (And I admit that I am making a broad, sweeping generalization, but I don’t see the unity).  The young study overseas only to come back to limited possibilities.  Try to open a business - AS a young Kuwaiti person without wastah.  Further,  the difficulties Kuwaitis face in the private sector are much worse than their Qatari and UAE neighbors.  Many just fall into the same mindset because “that’s the way it is.”  

If you don’t like “the way it is” – change it.

There is indeed a little change:  Kuwaitis are moving to the US, buying property, adding to our economy.  Welcome, friends!  We’ll make it easy for you to invest and hey – even get a driver’s license without a university degree!  Within a few years, they’re calling themselves, “American”.  Imagine that!

(Sidebar:  I have noticed within even the past 5 years, however, that there are many more grass-roots volunteer groups started by and working with young Kuwaitis to make change.  Outstanding!)

6:12, while I think some of your theories are nice - in theory - they have only been put to practice in.the.past. Kuwait is stagnant. No implementation. No enforcement. No desire to make it better.  And if there is a desire to make it better, committees are formed to TALK about it and then THINK about it and nothing is accomplished.  And you are correct – that is indeed quite different than the economies of Qatar and UAE:  They act.  They also "maintain" (which seems to be a word foreign to Kuwait - if you will).  Even when new projects are implemented (ok, so we have had a few new roads, new road expansions, etc.), within a few years, you notice how dilapidated they become because no one maintains them.  Go to any public area in Kuwait and look around.  You can quite literally say in many areas of the country, "Kuwait is crumbling".  

And I do agree with you 100% that Kuwait’s economy IS different from UAE and Qatar:  there is much more corruption in Kuwait.  It goes back to a lack of unified enforcement and equal justice under the law.  But, alas,  that is an entirely different subject. 

What I see Kuwait doing is blaming rather than uniting.  As the saying goes,  “divide and conquer.”  Well, stagnation is conquering while the divisions within Kuwait progress.  

That's the way I see it.

10 December - Hey check out this cool article (that appeared in a UAE paper) on young Kuwaitis who want change.  Just when I was on a rant!  

The new voices of Kuwait eager for change

The National, December 9, 2014


Anonymous said...

Took a lot of words right outta my mouth, DG! :)

As a former expat in Kuwait a long time ago, I really did like the place, but let's just say that the natives made it quite clear in many ways that my affection and loyalties were neither acknowledged, returned nor even considered in their plans for the country's future. For that reason alone, after growing up in Kuwait and knowing it as my home for the first 18 years of my life, when the time came for me to prepare for and start a career I didn't consider Kuwait as an option.

But that doesn't mean I'm in denial about the happier experiences in my past there, and that's the reason why I still sometimes read up on current affairs in Kuwait, and also care enough to drop a comment every now and then to a blog or news article that strikes a chord. :)

I may be wrong, but IMO, too many Kuwaitis are happy to pay foreigners to get their work done, they just don't want to have to actually respect them as well, especially if they are Asian. Sure, they should weed out illegals and excess workers who got there through corruption, but if they make the proposed legislation a sweeping one without well-thought out exceptions I think they're only going to be shooting themselves in the foot really badly.

Anonymous said...

wow....couldn't have it better!

AmericanGirl said...

Brilliant and very well put.

However, I would like to add something. Anonymous states that Emiratis and Qataris work in the public sector more than Kuwaitis. That's incorrect. Yes, Emiratization and Qatarization both require a minimum of 15% local workforce in all public sectors and this is enforced. Well, since we all know neither an Emirati or Qatari are big fans of spending 8 hours a day in the office we resolved this issue by doing what is called 'ghosting'. They are carried on the books, given an offer letter, paid a (very hefty) salary, and appear to be an 'employee' when in fact if they show up twice a year that's generous. They can often demand pretty much ANY salary they want (and get it) because companies are in competition to employ the locals to ensure they're meeting the guidelines set forth by the government. Since there's not enough locals to go around and they're only allowed ONE job, they name their price. I admit, it's well played.

Furthermore, the economy in the UAE is referred to as 'circular' for this reason... " the native Emiratis are outnumbered in their own country at a ratio of 11 to 1. They now make up only 9% of the population whereas foreigners make up 91% of the remaining population. Under Article 8 of UAE Federal Law no. 17, an expatriate can apply for UAE citizenship after residing in the country for 20 years, providing that person has never been convicted of a crime and can speak fluent Arabic". The Emirati government is smart enough to KEEP expats in the country, offer them citizenship after 20 years hard labor and low wages WITH conditions, and in return... the expat has something to look forward to, lives and works in the country until death, and spends every single penny they earn in said country. Because they're issued visas for their family members, the expat keeps their income within the UAE -- groceries, rent, school fees, uniforms, car, etc. Who benefits from this? Well, the UAE of course.

Not sure why Kuwait thinks this 5 year thing is a good idea but they might want to revisit the pros and cons.

Desert Girl said...

Thanks youse guys.

AG - I have worked for Kuwaiti companies (no names) and all have done ghosting to fulfill the quota for Kuwaitization. At company, it seemed as though they had a small army of prostitutes (totally judgmental - just judging the book by the cover; or lack thereof). They would roll in every once in a while. Fascinating.

I think that like everything else, there is a loophole. Kuwait is basically a welfare country for Kuwaitis (and trust me - a club that I WISH I could join!). Unless they completely strip citizens of all socially-provided benefits, and there becomes a cost/value issue, there probably won't be a change in the way Kuwaitization takes place. Although - it should be interesting when Kuwaitis demand high salaries for being ghosts. That will rock the boat a bit.

HateThatILoveYouKuwait said...

The rest of the Khaleej/Gulf and Kuwait are different in only one way . The amount of social benefits kuwaitis get and the amount of benefit the rest of gulf gets is not even on par . Kuwaitis think they are high and mighty and socially above everyone else . Well 90% do , the rest have moved to america due to the suffocation cause here .

Kuwaitis are ruining their own country from within like a termite . Its like an elite club which will last until the oil lasts . I remember the lines " How the mighty will fall " . They call themselves an islamic state and forget the basic tenants of equality .

Anonymous sounds like one of those kuwaitis who has been brain washed by the politicians who think all the problems are due to expats . Well let me tell you this if the expats all of them just take an unannounced holiday from work for just one day , kuwait will be how it was years before oil , a dry desert . It will cease to function .

I challenge anonymous to try to function just one day in his/her personal life without depending on an expat . The house maid , driver , the person who fills your petrol , the haris and the list goes on .

Anonymous said...

Its like you said all I was thinking and put it up in much more better and intelligent way.

About the ghosting,used to happen a lot in my dad's company and now where my hubby works.There were a few employees at my dad's company who came in once in a blue moon and drank coffee and after 3 hours left and were paid a high salary.AT my hubby's workplace, they come in and sit and play online the whole day and leave and are still paid high salaries.

I think a country to think about making itself self sustainable in terms of workforce and people.

Like I read in a news article, the writer was speaking on behalf of the expats but the last sentence was...It said...we need to respect the expat force or the end..."they are here to serve us."

unboricuaenq8 said...

I have to say that I agree with both parties on this. What I think is that we should be careful when we make statements like no unity among Kuwaitis. Sure Kuwaitis have divisions like Badu and Hauther or Arab and non Arab but when it comes down to it I have seen them unite behind the fact that they ARE Kuwaiti. Now I have lived in both southern and northern states within the USA. There is a lot of division there as well. When I lived in the northern states I knew many who identified themselves as Irish, Italian, Polish, and German. These were people whose great grandfathers immigrated to the US. In the south I met Spaniards and French all whom identified themselves as such yet whose family have been in the US for generations. How about the fact that we still have labels like African American, Hispanic American, Arab American and my favourite Muslim American. These are all signs of division. All of the social injustices that we find here in Kuwait towards the Asians and Africans are no different that what South Americans face in the USA. The difference is simple. Kuwait is smaller and everyone likes to talk about how bad Kuwait is and how the Kuwaitis are unjust. Lets be honest though, when it comes to paying foreigners to do their work and not actually respecting them is no different then what immigrants suffer in the US and other countries. This is the plight of ALL immigrant, expats, foreigners or how ever you want to classify yourselves. I came to Kuwait not for the money as the majority of the foreigners who come to Kuwait do. I did it so that I may live in a Muslim country where I would not be persecuted for being religious. My first job in Kuwait paid 120kd a month and I was happy for it. I worked hard until I was able to get to where I am at now. I am not rich but I have my own business (yes I have a contract so I don't get screwed over) and am doing better than I was in the US and when I was in Egypt.
That said, I would not mind if it was easier for foreign investors and for foreigners to own land. Permanent residency would not be too bad either. I am not saying that we should be given handouts or anything of the sort. I mean lets be realistic here, all countries depend on foreigners to do work that either the native population feel they are above doing or that they do not have the proper skills. My aunt is a Medical Doctor in the US and she makes less than regular female doctors and less than American doctors due to the fact that she is Hispanic.

Desert Girl said...

unboricuaenq8 -

You're right. There are divisions in the US, but when it comes to common causes (like war and standing up for what is right/just), (most) American people unite to fight against/combat whatever it is. I don't see it happening here. (Although there are starting to be waves with the youth movement of Kuwait...)

Kuwaitis were divided even when it came to the Invasion. And that continued when people who had left the country returned.

Kuwait is more transparent (in terms of being able to see divisions in the population) because it is roughly the size of New Jersey.

I think Kuwait's labor laws are MUCH better than in the US. I love the KLL. I wish it was better enforced for everyone but - it was only renewed in 2010.

You said, "Lets be honest though, when it comes to paying foreigners to do their work and not actually respecting them is no different then what immigrants suffer in the US and other countries" I disagree. Germany has VERY strict labor laws. The US has hotlines and posters and enforces employer infractions through fines and jail time. There's no enforcement in Kuwait. No comparison between Kuwait and other Western countries.

I too didn't come to Kuwait for the money, however. I came because I love Kuwait. I took a 2/3 pay cut to live here. (However, back in 1996, my little salary gave me a pretty good quality of life. Now it is more of a struggle as the cost of living has increased so much.)

Anonymous said...

The most renowned American scholar on Kuwait, Jill Crystal, confirmed that Kuwait has the strongest national identity in the Middle East region. This was strengthened during the Gulf War due to the underground resistance movement, which consisted of Kuwaitis from all backgrounds

By the way, 70% of Shia Kuwaitis are originally from Iran (Persians)

Everything is relative. You don't see the divisions in Emirati society because the UAE lacks freedom of press and political freedom. The federal structure of the UAE also helps cover up those divisions

You should also bear in mind that Kuwaitis and Bahrainis are the most diverse locals in the GCC. Emiratis and Qataris are more homogeneous

Anonymous said...

Most Kuwaiti people were united against Iraq.

The Gulf War began at summer when everyone was vacationing abroad. At the time Iraq invaded, most Kuwaitis were on summer vacation abroad

The Kuwaitis who were inside Kuwait during the Gulf War were all united in their fight against Iraq

Anonymous said...

You're right unboricuaenq8, we should be careful when we make statements like no unity among Kuwaitis.

Desert Girl said...

Guess I touched a nerve, December 15.

Jill Crystal is not the "Most renouned American scholar on Kuwait." She may be one of them, and an author, but not "the most". Perhaps that is your perspective. There are many other people who have written about Kuwait, the GCC, the economies, yada.... Including quite a few Kuwaitis.

But again, this is all my perspective (as I've stated) and my blog. While I respect the comments of others (often anonymous), I don't always agree with them. Case in point.

Thanks for commenting.

jjj said...

Kuwait is not more corrupt than the UAE and Qatar.

This isn't an opinion, but fact.

Highly recommend Michael Herb's new book, ''Wages of Oil: Parliaments and Economic Development in Kuwait and UAE''

The book is a best seller
on Amazon