Assessing skills gaps in a post-pandemic landscape: Insights from Oman and Kuwait

Abstract

Gulf countries must carefully manage the skills composition of their workforces as they move toward a post-hydrocarbon future, with workforce nationalization being a key priority. However, despite years of policies aimed at nationalizing their workforces, migrant workers still represent the majority of the workforce in the six countries of the Gulf. In this paper, we analyze the skills composition of workforces in Oman and Kuwait and compare the policy approaches taken by both countries in response to the COVID-19 pandemic. The analysis relies on published aggregate statistics as well as data collected from enterprise surveys conducted by the International Labour Organization (ILO). The survey findings showcase the difficulties faced by private sector firms in both countries in hiring and retaining both national and migrant workers following the pandemic, with entry restrictions and low wages being the main drivers of the skills gap. The pandemic provided an opportunity for both countries to advance their nationalization policies, with Oman making more progress than Kuwait. Moving forward, nationalization efforts ought to be focused on sectors where the skills of nationals overlap with foreign workers. Indeed, it will be more difficult to replace low-skilled foreign workers who occupy manual work positions. Public policies must align with these constraints if Gulf countries want to ensure a smooth transition and sustained economic growth and prosperity. This paper draws heavily on two reports published in 2022 by the ILO’s Regional Office for Arab States in cooperation with the Oman and Kuwait Chambers of Commerce and Industry.