GRM 2010 GRM 2011

Abstract Details

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Title of Paper:
Economic Diversification and Nationalisation Strategies: Challenges, Experiences, and Practices in the GCC and in Singapore/Malaysia
Paper Proposal Text :
The proposed paper analyses the entangled connectivities between the endeavours of economic development and diversification on the one side, and the social, political and economic challenges of nationalisation strategies on the other side. The focus is on Qatar and Oman as representative members of the GCC, and Singapore and Malaysia as representatives of the ASEAN group of countries.
Both regions have had to tackle similar challenges due to rapid modernisation and a high dependence on foreign imported labour and expertise. The GCC countries are additionally trying to diversify the economic revenues to reduce the high dependence of the hydrocarbon sector. Since the mid-2000s the relationship between Singapore, in particular, and the Middle East has grown both in scope and depth and has led to a steady increase in the areas of economic cooperation between them. As a consequence a corresponding improvement in relations at all levels between the GCC’s countries and Singapore and Malaysia has been observed.
Qatar and Oman are chosen as characteristic GCC-members at either end of the spectrum in terms of foreign labor participation in the workforce. Qatar has the highest percentage of foreign workforce in the GCC (86,5% of the total population), and is thus amongst the top 10 immigrant destination countries worldwide. Whereas in Oman immigrant workers account for only 28,4% of the population, one of the lowest rate of foreign workforce among the GCC countries (WORLDBANK: Migration and Remittances Factbook 2011, p.25).
Considering the political challenges, since 2011 the Omani leadership, for instance, has made a number of policy changes in response to local claims for greater rights of employment for nationals and a reduction in the recruitment of foreign labour force, especially for professionals, in the private sector. In response the Government increased the minimum Omanisation rates in specific sectors of the private economy including, e.g. insurance, banking and real estate. However, regardless of these initiatives, the dependence on international professionals, particularly in the management and higher educational sector, the strategically important oil and gas-sector, and in the entire medical field is still high in all GCC countries and continues to challenge acceptance and in a further step societal integration of the foreign workers by the local population.
Hence, the paper examines the societal and political strategies of the GCC in coping with the diverse challenges of combining the needs of a significant foreign workforce with the demands for greater employment opportunities from national populations – and the emerging and still existing main difficulties.
By way of comparison, Singapore and Malaysia will be taken as examples for two developed economies that have only recently undergone a similar rapid process of modernisation as the oil-producing GCC-countries, and where the labour markets also heavily depend on a foreign expatriate workforce. In light of the very different economies and institutional environments of the GCC nations and Singapore and Malaysia, such a comparative study also provides a fruitful opportunity for comparing and exchanging experiences in managing foreign labour. Given the current emphasis of the Gulf nations to diversify their economies and to promote job creation, it will be indispensable to also set up an environment that fosters creativity and economic freedom within the realms of a very service oriented economic structure. Initiatives that both Singapore and Malaysia have managed to develop.
Furthermore, the example of the increasing number of companies from the GCC either partnering with Singaporean companies, or using Singapore as a place to base of operations shows the attraction of Singapore for the GCC countries. Singapore’s position offers a strategic connection to the heart of the Asia-Pacific market. It can also add experience with Islamic banking along with highly efficient logistical capacities and a friendly business environment to its many attractions for GCC companies (s. AL-SUDAIRI 2013, p.2) – factors, which can serve as the basis for sharing experiences with the Gulf Nations.
The proposed paper will in particular address two of the suggested themes in the call for papers: “policy challenges and conditions for successful economic diversification” and “global best practices and the need for a new mode of diversification in the GCC”.

Al-Sudairi, M., 2013, Saudi-Singapore Relations. Middle East Insights, No. 106, Middle East Institute, National University of Singapore.
The World Bank, 2011, Migration and Remittances Factbook 2011. Washington.