Low oil prices and it's effect on an overbloated, lazy and entitled public service in the Gulf

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By Tom Finn | DOHA

Ahmed, a Qatari civil servant, used to arrive at his office at a government ministry in Doha late in the morning and leave for home after lunch, collecting a monthly salary of 40,000 rial ($11,000) and a generous housing and travel allowance.

But last month a government official made a surprise spot check on the ministry's offices and found dozens of employees absent.

"Punctuality is a duty," said a letter Ahmed received from the minister's office. "Qatar expects the best of its citizens."

For a country whose tiny population is the world's wealthiest per capita and which sits upon its largest natural gas reserves, increasing the productivity of its 90,000 public employees might seem like a needless task.

But it is part of a trend across the Gulf as economies there try to lessen the burden of costly public sectors.

Gulf states have for decades used their energy wealth to provide millions of citizens with cushy government jobs, part of a social contract by rulers that rewards political acquiescence and educational attainment with employment for life.

But high-paying public sector jobs that demand little of workers have led to bureaucratic inertia and an absenteeism culture that governments turned a blind eye to during the Gulf's boom years.


In 2011 a Kuwait government report found that half the country's state employees were absent from work between January and March, costing the country's treasury more than 10.5 million dinars ($35 million).

Since oil prices plunged in 2014, however, Arab monarchies have curbed subsidies and laid off staff as they try to trim budget deficits and build economies less reliant on hydrocarbons.

In the wealthier Gulf Cooperation Council (GCC) countries of Kuwait, Qatar, and the United Arab Emirates, where populations are small, more than 75 percent of employed nationals work in the public sector, according to the IMF.

The ratio is also high in oil-giant Saudi Arabia - which racked up a record budget deficit of nearly $100 billion last year - while in Oman, about 50 percent of employed nationals work in the public sector.

Bahrain has the lowest proportion of nationals working in the public sector, at 35 percent.

In one of the most dramatic efforts to shake government agencies out of their slumber, the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, carried out an early morning spot check on the city state's management in August, found empty desks, and sacked nine senior officials.

Pictures of Sheikh Mohammed wandering the sparsely populated offices of the Land Department were widely published in local newspapers.

Qatar, in an apparent effort to codify the responsibilities of government employees and get them working harder, last month passed a law that raised pay for workers who have achieved higher levels of education and enforced a merit-based promotion scheme.

The nation's young emir has warned citizens that the state "can no longer provide for everything" and local newspaper editorials mock lazy civil servants referred to jokingly by Qataris as "people of the couch".

Neighboring Saudi Arabia in September scaled back financial perks for public sector employees in one of the most drastic measures yet by the oil-rich kingdom to save money at a time of low oil prices.

Lured by a generous salary and his own office overlooking the Arabian Gulf, 26-year-old Ahmed, who declined to give his second name, joined Qatar's ministry of transport last year after graduating from Qatar University.

On his first day, Ahmed said, he was surprised to find colleagues without clear responsibilities carrying documents from one office to another. "Many workers, even managers, were engaged in watching television or sleeping," he said.

One colleague advised him to get to know the "tea boys" - Nepali waiters who deliver tea to offices - so he could find out when his boss had left and do the same.

Other skiving tactics included leaving a jacket on the back of his chair so a casual observer would assume he was first to arrive at the office and programming e-mails to send themselves in the afternoon so managers thought he was still at work.

But superiors started to clamp down on those evading work, Ahmed said, after Sheikh Tamim bin Hamad al-Thani, Qatar's emir, called on Nov 1 for Qataris to move off social welfare and "into action" in the face of low energy prices.

PUBLIC ANGER

After Arab spring protests in 2011, rich Gulf states spent billions of dollars raising salaries and investing in subsidies and infrastructure in part to ensure quiet at home.

Wars and social turmoil spurred efforts in countries like Saudi Arabia to boost employment of their citizens and crack down on illegal hiring of foreign workers.

But today austerity is unnerving citizens for whom affluence and stellar growth are the norm.

Reforms are proving sensitive - politically consequential even - and there are fears that further cuts to sumptuous welfare states could heighten public anger.

In May oil workers in Kuwait went on strike against a proposed overhaul of the public sector payroll system. An election last month filled the country's parliament with opposition lawmakers opposed to wage cuts and taxes.

Omani medics from state-funded colleges in November held a two-week strike after their salaries were cut.

Ending the legacy of public sectors being an engine of job creation, analysts say, is vital to avoid rising unemployment in years ahead if oil revenues decline again and nationals are still not working in the private sector.

But Gulf youth may still expect to be entitled to a share of the national wealth whether in the form of public sector jobs with high wages or breaks from future taxes.


(Additional reporting by Fatma Alarimi in MUSCAT; Editing by William Maclean/Jeremy Gaunt)
 

Thegoodshepherd

Galkacyo iyo Calula dhexdood
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The Gulf countries, starting with Saudi Arabia, have had at least 50 years to develop some industry. Any kind of industry that was competitive globally and would last after oil was gone or worthless. It is now 2016 and probably too late, path dependency has set in. The Gulf countries are in for a rude awakening in the next few decades. Most of them don't matter because their populations are too small, what is very scary is Saudi Arabia, the environment there cannot support 30 million people without the oil revenues. There is literally no way to feed 30 million people in SA without oil.
 

Apollo

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The Gulf countries, starting with Saudi Arabia, have had at least 50 years to develop some industry. Any kind of industry that was competitive globally and would last after oil was gone or worthless. It is now 2016 and probably too late, path dependency has set in. The Gulf countries are in for a rude awakening in the next few decades. Most of them don't matter because their populations are too small, what is very scary is Saudi Arabia, the environment there cannot support 30 million people without the oil revenues. There is literally no way to feed 30 million people in SA without oil.

Native Gulf Arabs (non-migrants) are seriously stupid. On global education rankings their secondary school pupils always ranks below that of impoverished Latin American countries.

These guys totally lucked out with oil. They have no talents whatsoever.
 

Thegoodshepherd

Galkacyo iyo Calula dhexdood
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Native Gulf Arabs (non-migrants) are seriously stupid. On global education rankings their secondary school pupils always ranks below that of impoverished Latin American countries.

These guys totally lucked out with oil. They have no talents whatsoever.

True. But it is almost as if Saudi Arabia became a machine for turning oil revenues into babies. It seems like their only accomplishment has been exponential population growth and the radicalization of Sunni Islam.
 
Why do they pay their workers so much tax free income and on top of that their housing costs? They can live comfortably with a third of what they're making now even after putting a roof over their heads themselves.

I know KSA gets 80-90% of their government revenue from oil. They should consider a sales and income tax as a first step.

@Amun is right; they are very stupid people. I knew a couple of Saudi diplomat's kids in the capital and they would pay students to do their homework for them while they were smoking shisha and watching soccer matches during the day. They were never in school. Whatever classes they end up failing, they would pay to register again and do their same routine.
 
Why do they pay their workers so much tax free income and on top of that their housing costs? They can live comfortably with a third of what they're making now even after putting a roof over their heads themselves.

I know KSA gets 80-90% of their government revenue from oil. They should consider a sales and income tax as a first step.

@Amun is right; they are very stupid people. I knew a couple of Saudi diplomat's kids in the capital and they would pay students to do their homework for them while they were smoking shisha and watching soccer matches during the day. They were never in school. Whatever classes they end up failing, they would pay to register again and do their same routine.

I love how Somalia gets a front row seat at watching the Arab league burn.

In Saudi Arabia the word "Work Ethic" in the dictionary displays a Bengali. Everything in the country is hired out to someone else. I love how Malaysian culture skips this, they work fuckin hard! You will see a Malay do kitchen and security work, they are called the "BumiPutras" meaning: sons of the soil. Malays get tax breaks and exclusive minimum wages, but it won't stop them for working hard.

All I'm worried about is the audacity of Saudi governments ability copy cat China in Africa and bring ZERO value to the table. Ain't a god damn thing "Made in Saudi Arabia". The whole GCC is set for a shake up.

Other than Oman, I have zero pity for the gulf council.
 
@AbdiJohnson What exactly does Canada produce again? The biggest industry outside of big oil and resource extraction is an inflated and bloated real-estate industry being propped up by a low-interest rate environment. Other than that, what innovation and subsequent industries actually exist in Canada? Nortel failed. RIM is on life-support, along with Bombardier. The few people who can produce things of value get siphoned off to the US after they graduate by the major corporations there.

The point is, don't throw stones from a glass house. Most countries, just like the one you are in, are largely banana republics that produce nothing of value. Even China largely produces junk and is more of an environment for sweatshops and low-skill manufacturing work. As an example, China's the world's largest automanufacturer and I have yet to see anyone driving around a made-in-china Car.
 

Bernie Madoff

Afhayeenka SL
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I love how Somalia gets a front row seat at watching the Arab league burn.

In Saudi Arabia the word "Work Ethic" in the dictionary displays a Bengali. Everything in the country is hired out to someone else. I love how Malaysian culture skips this, they work fuckin hard! You will see a Malay do kitchen and security work, they are called the "BumiPutras" meaning: sons of the soil. Malays get tax breaks and exclusive minimum wages, but it won't stop them for working hard.

All I'm worried about is the audacity of Saudi governments ability copy cat China in Africa and bring ZERO value to the table. Ain't a god damn thing "Made in Saudi Arabia". The whole GCC is set for a shake up.

Other than Oman, I have zero pity for the gulf council.
Omanis are much different from the gulf I seen alot omanis even driving taxis
 
Wallahi I'm not surprised, lazy fucks get everything handed to them by the government

@AbdiJohnson the education there is atrocious. I managed to ace several classes even with my struggle arabic tch
 
@AbdiJohnson What exactly does Canada produce again? The biggest industry outside of big oil and resource extraction is an inflated and bloated real-estate industry being propped up by a low-interest rate environment. Other than that, what innovation and subsequent industries actually exist in Canada? Nortel failed. RIM is on life-support, along with Bombardier. The few people who can produce things of value get siphoned off to the US after they graduate by the major corporations there.

The point is, don't throw stones from a glass house. Most countries, just like the one you are in, are largely banana republics that produce nothing of value. Even China largely produces junk and is more of an environment for sweatshops and low-skill manufacturing work. As an example, China's the world's largest automanufacturer and I have yet to see anyone driving around a made-in-china Car.

How can you compare Canada's economy with the Gulf countries? Cars and car parts is Canada's largest export, not oil. It is among the top 10 exporting countries and is tied with the U.K. The energy industry is between 5-8% of the country's GDP. The economy is very diversified, one of the most diversified in the world.

It's easier to get venture capital in the U.S. which is why many Canadians end up going there for their start-ups. Also, salaries are higher there in some industries.

The software industry has increased by 25% in the past 5 years. Top 3 gaming industry in the world. Top 5 aerospace industry. Top 10 Forbes Global 500 companies. There are dozens of foreign TV and movie productions going on in your own city as I type this.
The list is endless. The energy industry can disappear tomorrow with minimal impact or it could not and still be among the world's largest exporters of oil. You do know there are more people in Canada who work directly in green energy than in the oil sands right?
 
How can you compare Canada's economy with the Gulf countries? Cars and car parts is Canada's largest export, not oil. It is among the top 10 exporting countries and is tied with the U.K. The energy industry is between 5-8% of the country's GDP. The economy is very diversified, one of the most diversified in the world.

Manufacturing is dead in Canada sxb. Why do you think BoC is either leaving the already extremely low-rate unchanged or cutting it further? It's to jumpstart the manufacturing industry.


Bank of Canada weighs further interest rate cut amid sluggish exports


Bragging about auto-parts is exactly helping my point. It's nothing more than low-paid, low-skilled work that takes advantage of the relatively low corporate tax-rate environment we live in. There is no Canadian ingenuity involved and no R&D is done in the country. These auto manufacturers could just as easily shift manufacturing to Mexico and not lose anything fundamentally. In fact, it's currently happening and been happening for decades now:

Carmakers say adios to Canada as Mexico shifts into higher gear

The facts do not agree with your propaganda, sadly.

Real estate GDP now represents half of Canada's economic growth

It's an uncontested fact that Canada's economy is being propped up by the real estate industry and its associated industries (home renovation). That is why governments are so hesitant in intervening in the wild housing markets. If housing frenzy collapses, the Canadian economy is going to tank along with it. This industry along with the resource-extraction sector is what has driven Canadian GDP for the past 2 decades. Manufacturing has not been relevant since the mid-1990s.


It's easier to get venture capital in the U.S. which is why many Canadians end up going there for their start-ups. Also, salaries are higher there in some industries.

You are so clueless it hurts. :mjlol:

No damn Canadian grads are going to the US and starting corporations. Most of them are actually scouted by the big tech companies in SV. It's gotten so bad that Canadian CEOs are calling for punitive government action against graduates seeking greener pastures in the US. :russ:

There should be consequences for Ontario grads leaving Canada: CEOs



The software industry has increased by 25% in the past 5 years. Top 3 gaming industry in the world. Top 5 aerospace industry. Top 10 Forbes Global 500 companies. There are dozens of foreign TV and movie productions going on in your own city as I type this.
The list is endless. The energy industry can disappear tomorrow with minimal impact or it could not and still be among the world's largest exporters of oil. You do know there are more people in Canada who work directly in green energy than in the oil sands right?

I have to give it to you, you're a good spin-doctor. A 25% increase on what is essentially 0 is still practically 0. A tiny gaming corp that employs less than 100 people is not something to brag about. I would love to see who placed Canada's aerospace industry in the top 5, especially considering the only manufacturer in the country is on the verge of collapsing and will take the aerospace industry with it.

So, what happened in Alberta and across the entire country since the collapse of oil in 2014? The country still hasn't recovered from the massive job losses and economic shocks that were the byproduct of tumbling oil prices. :bell:
 
I remember watching somalidaduunka snapchat about somali girls teaching in saudi arabia. One of the girls showed a class room completely empty with just her and other teacher chatting away and laughing. she even said no student turned up lol.
 
@jubbaman

Is Canada is so hopeless, why does it have the wealthiest middle class in the world?

For decades, the United States boasted the honor of having the richest middle class. However, as of 2015, Canada has the wealthiest middle class of any country in the world.

China only became the U.S. largest trading partner last year as a result of low oil prices

U.S. Commerce Department data show trade in goods with China hit $441.7 billion US in the nine months to September, up 3.7 per cent since last year.

But Canada's trade with the U.S. was $438.1 billion for the same period, down 11.6 per cent from the previous year.

Most of that drop was because of crude oil, with the price being half what it was in 2014.

The fact that China (1.3 billion) and Mexico (150 million) in just the last year came slightly ahead of Canada reflects poorly on them due to their cost advantage, not tiny Canada (30 million). They are just sending their cheap junk to Wal Mart.

IMG_20161214_170034.jpg

Also some job losses in Alberta, a place with a smaller population than the city you live in (metro) is not significant.

OTTAWA — In a tough year that saw the economy recoil over its first half, the country’s job market still produced its best result in three years, Statistics Canada data has revealed.


On Friday, the federal agency released a 2015 review of its labour force survey that showed national employment rose by 0.9 per cent over the course of the year.

The numbers say the economy bulked up by adding 158,100 net new jobs — and 95.5 per cent of those gigs, or 151,000, were full-time positions.

The gaming industry does not employ 100 people. It employs more than direct oil sands jobs

Canada has the third largest video game industry in terms of employment numbers following the USA and Japan, with 20,400 employees and 472 companies and 329 studios

We're doing fine. I'd go on and on with you with more stats, but I'm using my phone
 
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