IMF on the Gulf Region / Labor market reform would boost jobs

A new paper by IMF staff says that comprehensive labor market reforms are needed to reorient the Gulf Cooperation Council (GCC) economies toward greater employment of nationals in the private sector, improve productivity, and support progress toward economic diversification.

With a rapidly growing youth population poised to enter the work force, more private sector job creation for GCC nationals will be essential if unemployment is to be contained, the report notes.

The growth model in GCC countries has delivered substantial improvements in living standards over several decades. Access to foreign labor has supported rapid growth in the non-oil sector and low inflation. However, the costs of the current model—particularly the limited employment of nationals in the private sector, the relatively high public sector wage bill, and weak productivity growth—are becoming a concern.

“Based on current projections, new private sector jobs will only cover a fraction of labor force entrants,” said Padamja Khandelwal, the lead author of the report. “Even if public sector hiring continues at its recent pace, without reforms, unemployment is likely to rise.”

Chosen excerpts by Job Market Monitor. Read the whole story at 

via IMF Survey : Labor Market Reform Would Boost Jobs, Productivity in Gulf.