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Aspects of international labour migration in the Arab Near East

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Aspects of international labour migration in the Arab Near East implications for USAID policy
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Birks, J. S
Sinclair, C. A
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Labor mobility -- Arab countries ( lcsh )
Labor supply -- Arab countries ( lcsh )
Emigration and immigration -- Economic aspects -- Arab countries ( lcsh )
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Sudan
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Morocco

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Birks, Stace and Sinclair, Clive.

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Full Text
ASPECTS OF INTERNATIONAL LABOUR MIGRATION IN THE ARAB NEAR EAST: IMPLICATIONS FOR USAID POLICY
Dr. Stace birks and Dr. Clive Sinclair
MAY 1979
Prepared for
Project Analysis and Evaluation Staff Office of Development Planning
Bureau for Near East
U.S. Agency for international Development
Washington, D.C. 20523




ASPECTS OF INTERNATIONAL LABOUR MIGRATION IN THE ARAB NEAR EAST:
IMPLICATIONS FOR USAID POLICY
Dr. Stace Birks and Dr. Clive Sinclair
May 1979
Prepared for
Project Analysis and Evaluation Staff
Office of Development Planning
Bureau for Near East
U.S. Agency for International Development
Contract No. AID/ne-c-1593




FOR EWARD
Dr. Stace Birks and Dr.,Clive Sinclair, the authors
of this study, are affiliated with the Department of Economics.,
University of Durham, England. They have conducted considerable
research on labor migration in the Near East, and have recently
completed a comprehensive series of reports on this topic for
* the International Labour Office (ILO). The present study
provides arn overview of Near East arigratiort, and discusses
the policy implications for the Agency for International Development.
International migration of labor is a key factor influencing
the development of countries in the Near East and North Africa.
Labor Is supplied to capital rich, oil producing countries by
their capital poor neighbors. This migration has made an important contribution to the development of the wealthier
countries. However, the impact of labor emigration on the development of capital poor countries is unclear. Migrant remittances
constitute a potentially important source of foreign exchange.
On the other hand, migration may result In severe shortages
of skilled and unskilled labor in some capital poor countries;
this lack of labor manpower can be an important constraint to development. Also, the return of labor to capital poor
countries, which the authors suggest may increase in the future,
may cause problems of unemployment because national economies
may be unable to expand rapidly enough to absorb sudden increases
in labor supply.
There are a number of Important Issues and questions
concerning labor migration in the Near East. What are current
levels and patterns of migration? How will these patterns change in the years ahead? What are important migration and development
policies for capital poor countries and for international donor
agencies? What policies are needed In the short, medium and
long term? These and other issues and questions ,ve been




skillfully explored by Drs. Birks and Sinclair. Their study provides a useful guide to both increased understanding of labor migration and improved policy and programs for development of Near East countries.
Project Analysis and Evaluation Staff Joan M. Silver, Chief Office of Development Planning Annette Binnendlik, Analyst
Bureau for Near East Richard Rhoda, Analyst
Agency for International Development May, 1979
Washington, D.C.




CONTENTS
Page Number.
Part 1. INTRODUCTION AND SLUVARY CONCLUSIONS vii
IA Preface vii
1B The Form of the Report viii
iC Summarised Conclusions and Policy
Recommendations ix
Part 2. THE ECONOMIC FOUNDATION TO AND GENERAL
PATTERNS OF MIGRANT LABOUR MOVEMENTS IN
THE ARAB WORLD
2A Introduction 1
2B The Distribution of Wealth in the Near 3
East
2C Populations of the Arab States 5
2D The National Labour Forces of the Arab
States 9
E Economic Development in the Capital Rich
States
2F Economic Development in the Capital Poor
States 17
2G The International Transfers of Labour 19
2H The New Scale of Economic Development
Transforms Migrant Labour Patterns 1975 25 21 The Changing Perspective of the Migrant
Receiving Countries 28
2J Formalised Supplies of Indian and Pakistani
Labour 29
2K The Oriental Connection 31
2L Enclave Development in the Capital Rich
States 33
2M Conclusion 38
Part 3. THE LABOUR EXPORTERS COUNTRY REVIEWS AND
POLICY STATEMENTS 40
3A The Arab Republic of Egypt 40
(i) The Number of Egyptians working abroad 40
(ii) The Size and Disposition of the
Egyptian Labour Force 42




Page Number 7
(iii) Egypt's Limited Modern Response to
Labour Exporting 43
(iv) Policies to Facilitate International
Migration for Employment from Egypt 49
(a) The Evaluation of the Marlket for Egyptian Workers overseas 4
(b) Government Action to Increase
Migration for Employment 55
(v) Conclusion 57
3B The Democratic -Republic of the Sudan 58
(i) Introduction 58
(ii) The Rapid Expansion in Sudanese
Labour Exports 5
(iii) Migration for Employment and the
Sudanese Economy 61
(iv) Economic Development and the Sudanese
Manpower Shortage :Implications for 6
Policy 6
(v) The Spontaneous Labour Market Response 6
A Net Benefit 6
(vi) Sudanese Efforts to Utilise Remittances 70 3C The Hashemite Kingdom of Jordan 72
(i) Introduction 72
(ii) Occupational Mobility.: Implications
for Policy in Jordan 74
(iii) The Brain Drain 75
(a) The Scale of Emigration of the
Better Educated 75
(b) Policy Implications of the Brain
Drain 77
(iv) Agriculture and Migration for Employ- 7
ment : Replacements
(v) Remittances : A Predicted Decline 79
(vi) Human Resources Development t53
(vii) Conclusion 8
3D The Syrian Arab Republic 86
(i) Introduction 86
(ii) Disposition of the Workforce 87
(iii) Outmigration of Syrians 88
(iv) Labour Shortages in Syria !
(v) Policy Implications 94
(vi) Conclusion 94




Page Number
3E The Sultanate of Oman
(i) Introduction 9b
(ii) Population and Workforce of the
S ultanate 96
(iii) Migration and Withdrawal of Labour
from the Rural Sector 97
(iv) The Impact on the Rural Sector of
Labour Withdrawals caused by
Migration for Employment 99
(v) Similar Agricultural Transformation
in the Yemen : Crop Substitution 101
(vi) The Future of Labour Migration from
Rural Oman 103
(vii) Government Policies to Arrest
Agricultural Decline 10b
(viii) Immigrant Labour and the Omani
Modern Sector log
(ix) Conclusion 110
3F The Yemen Arab Republic (YAR) 1i1
(i) Introduction 111
(ii) The Number of Yemenis Abroad : Some
Estimates 112
(iii) Migrants and the Domestic Workforce 114
(iv) Impact of Migration on Economic
Development 116
(v) Withdrawal of Labour 116
(a) The Selectivity of Migration 116
(b) Agriculture 117
(c) Policy Implications of this
Labour Withdrawal 19
(vi) Remittances 119
(a) The History of Remittances 119
(b) Implications for Policy 23
(vii) Intangible Acquisitions of Migrants
: Negotiations for more Training L25
(viii) The Future of Yemeni Migration 27
Cix) Conclusion 28




- iv
Page Number
3G The Republic of Tunisia 128
(i) Patterns of Tunisian Migration 128
(ii) Migration to Libya 131
(iii) Migration for Employment and the 133
Tunisian Labour Market
(iv) The Direction cf Tunisian Labour
Exports : Options for Planners 136
(v) Conclusion 138
3H The Kingdom of Morocco .139
(i) Introduction 139
(ii) The Domestic Labour Market ofMorocco 140
(iii) Rising upon Significance of
Remittances 142
(iv) Potential and Policies for Moroccan
Migratim for Employment. 144
Part 4. PROJECTtONS OF THE NEAR EAST LABOUR
MARKET TO 1985 147
4A Introduction 147
4B The Domestic Demand for and Supply of
Labour 147
4C The International Supply of Labour 149
4D The Resolution of Demand and Supply 152
(i) Scenario One Maximum Arab
Penetration of Capital Rich
Labour Markets 152
(ii). Scenario Two : A Selective
Labour Market, less open to
Arab Labour 154
4E Scenarios One and Two : Conclusion 155
4F The Implications of the Projection
Results for Capital Poor States 158
Part 5. CONCLUSION AlM/ BROAD POLICY STATEMENT 160
5A Introduction 160
5B Migration for Employment and Economic
Development of the Capital Poor States 161
5C. The Broad and Temporal Perspectives
within which USAID should Frame its
Policies 166




Rage Num~er
Part 6. A NOM; ON' CObIENTSATION 169
NOTES AND PEFERENCZS 175




LIST OF TABLES
Table No. Page Number
2.1_, Selected Arab States Ranked by Gross
National Product per capita, 1976 4
2.2 Major Near East Oil Producers : Production 5 and Revenues from Oil, 1977
2.3 Major Arab States : Indigenous Populations 6 ranked by size
2.4 Capital Poor States : National Populations and Workforces ranked by size, 1975 10
2.5 Capital Rich States : National Populations and Workforces ranked by size, 1975 10
2.6 Employment by Nationality in Capital Rich 21
States, 1975
2.7- Migrant Workers by Ethnic Origin and Country of Employment, 1975 22
2'8 Arab Migrant Workers in the Arab Region, 1975 23
2.9 Migrant Workers and Domestic Workforces of Labour Sending Countries, 1975 27
2.10 Workforces of Kuwait, Bahrain, Qatar and the United Arab Emirates, by ethnic
origin, 1970 and 1975 29
2.11 Dubai Employment Estimates for Jebel Ali by Occupational Group, 1981-1985 37
3.1 Egypt Disposition of Workforce, 1975 42
3.2 Sudan Demand for and Supply of Professionals, Period of Six Year Plan,
1977/78 to 1982/83 63
3.3 Sudan : Demand for and Supply of Technicians,Period of Six Year Plan,
1977/78 to 1982-83 63
3.4 Sudan : Kidd and Thurston's Estimates of "Minimum Number of Sudanese Working
Abroad, 1976 64
3.5 Jordan : Workforce and Population, 1975 73




-vii
Table No. Page Number
3.6 Jordan : Disposition of Workforce, 1975 73
3.7 Jordan : The Distribution of Educational
Level of (a) Migrants (b) Resident popu- 76
lation, 1975
3.8 Jordan : Agricultural Production, 1972-1976 78
3.9 Jordan : Workers Remittances, Imports
($.Mn.) and Related Indices, 1973-77 82
3.10 Syria : Employment by Sector, 1976 88
3.11 Syria : Syrian Migrant Workers in Oil Rich
States, 1975 90
3.12 Yemen Arab Republic : Disposition of Labour Force, 1975 1.4
3.13 Yemen Arab Republic : Average Duration of Stay of Migrant Workers in Saudi Arabia 115
3.14 Yemen Arab Republic : Balance of Trade and Private Transfers, 1971/72 to 1976/77 119
3.15 Yemen Arab Republic : Per Capita GNP and Remittances, 1970-1977 121
3.16 Yemen Arab Republic : Comparison of Per Capita GNP and Cost of Living index for
Sana'a, 1972-1976 121
3.17 Yemen Arab Republic : Imports as a percentage of Remittances, 1972/73 5o 1976/77 122
3.18 Tunisia : Migration of Toriersby Year and
Country of Destination 130
3.19 Tunisia : Occupational Group of Migrants, 1975 132
3.20 Tunisia : Professional Status of the Population 1975 114
3.21 Tunisia : Income from Workers Abroad as Part of the Balance of Payments, 1970-1976 136
3.22 Morocco : Estimate of Employment by Economic Sector, 977 141
3.23 Morocco : Income from Remittances, 1966-1976 143
3.24 Morocco : Number of Migrants leaving for Europe, 1973-1977 144




- viii
Table No. Page Niumber
4.1 Major Capital Rich States : Total Employ- 148
ment Projected to 1985
4.2 ,Major Capital Rich States : National 149
Employment Projected to 1985
4.3 Number of Arab Migrants Abroad in 1975 and Projected Number for 1985 by Country 150
of Origin
4.4 Resolution of Labour Demand and Supply Maximum Arab Penetration of Capital Rich 155
Labour Markets (Scenario One)
4.5 ResoLution of Labour Demand and Supply : A More Selective Labour Market in the
Capital Rich States Less Open to Arab 156
Labour (Scenario Two).




PART 1. INTRODUCTION, SUMMARY AND ABBPEVIATED CONCLUSIONS
Preface
IA This Report is derived from the research carried out by
Dr. J. S. Birks and Dr. C. A. Sinclair whilst they were codirectors of the International Migration Project. This was a study commissioned by the International Labour Office as part
of the World Employment Programme, Migration for Employment
Project. The aim of the project is to investigate the implications of international migration movements from low-income
to high-income countries for economic and social policymaking.
Supported by the United Nations Fund for Population
Activities, the I.L.O. initiated a wide range of stocktaking and evaluation activities, of which the International Migration Project was part.
The views expressed in this report are not necessarily
those of the International Labour Office, or of any other
international agency or government with which the authors have
been or are associated.
The authors alone are responsible for what is included in
this report.




IB The Form of the Report
The report covers the labour market of the Arab Near
East asfdefined to include the Maghrib, North Africa, the Nile Valley, the Levant and the Arabian peninsula. Mauritania and
Turkey are excluded except insofar as they bear relevance to
the focus of the study.
The main focus is the capital poor labour supplying
countries of : the Arab Republic of Egypt; the Democratic
Republic of the Sudan; the Hashemite Kingdom of Jordan; the Syrian Arab Republic; the Sultanate of Oman; the Yemen Arab
Republic; the Republic of Tunisia; and the Kingdom of Morocco.
The analysis begins with a review of the wealth and
human capital endowments of the major Arab states, and analyses the contrasting forms of economic development that have arisen
from these resource distributions. These patterns have
resulted in high-incme and low-income countries developing at startlingly different rates, and comprise the economic foundations for the system of international migration for employment.
The patterns of migration are then described, and the impact
of the transfers of labour on the shape of industrial development in the oil exporting states outlined.
Part 3 consists of detailed analysis of the nature of and
effects of international migration for employment upon the
Arab labour supplying states. In each case, what appears to
be the most acutely damaging or most beneficial aspect of
labour exporting to the particular country is highlighted within a general framework of discussion.




-xi
The study of each of these individual country assessments
concludes with Statements of suitable policy aims and
directiorswith respect to migration for employment. These
J
serve as guides to possible USAID action in these states.
In part 4, these individual country policy statements are
cast in the overall trends of the Arab region's labour market.
The demand for and supply .of labour are projected to 1985 in
order to demonstrate policy priorities and the rapid rates of
eoncmic;change under which the labour suppliers' policies
have to be shaped and effected.
Part 5 demonstrates the broad regional issues which have
to be faced by the labour supplying states, which hinge around their dependance upon the capital rich countries of employment.
Stemming from this is the temporal, economic and political
framework within which USAID should consider the avenues of
action in the Arab Near East.
Part 6 comprises a note on compensation. Without this,
the report would have been incomplete, in view of the importance of compensation as an issue in the region.
IC Summarised Conclusions and Policy Statements
Most generally two factors are of overriding significance.
(a) The widening gap between capital rich and capital
poor countries, which is not being reduced, but which is probably being aggravated by migration for employment.
(b) The likelihood of large scale unemployment occurring
in the medium term in the capital poor states as
their labour returns home after being discarded by
the capital rich countries of employment.




The authors predict a turn about in the international labour market in the Arab world. This will be of crucia.L significance to the Arab labour suppliers upon which the report is focussed : at the present their chief problems and preoccupations are with labour shortages and problems of effective utilisation of remittances. Although these problems are acute, we assert they are transitory. Opportunites in the capital rich states for Arab labour from the capital poor states will diminish rather than grow. In fact, despite continued economic growth of the oil exporters, employment of Arab migrant workers could fall sharply.
In this event, a new more intractable set of problems
will be facing the capital poor states. They will experience a net return of large numbers of erstwhile migrant workers, and consequently extensive unemployment contemperaneous with declining remittance levels.
As investment for economic growth and employment creation becomes increasingly constrained by foreign exchange shortages, so the existing social and political order in these capital poor states will be increasingly tested.
The authors suggest a regional labour market strategy in an attempt to predict and stabilise labour flows. This is -an essential medium to longterm strategy to ease the impact of vacilLations in demand of the labour markets of the capital poor states. This strategy should be part of an attempt to attain some stability of labour demand. With a fall in inflation this would create a climate within which attempts should be made to engender economic growth and an increase in real incomes in the non-oil endowed states.




- Xiii
In short, the authors feel it essential, because of the rapidity of change in the Near East,. to look beyond the present state of affairs, to the near future, when the labour market will be of markedly different characteristics from those existing today.
Present day problems associated with the role of these capital poor states are, however, not ignored. They are analysed in detail, and the numerous paths of action to minimise the deleterious impacts of migration for employment are described and evaluated.
Efforts must be made to utilise remittances in the national interest rather than individual interest by encouraging use of bank accounts for transfers; instigating development bonds, and storing foreign exchange reserves for the future. Agriculture must be protected in the short term, so as to maximise its longer term potential. Positive government action is recommended to encourage migrants to return, rather than negative efforts to prevent their departure to seek work, for example. The need to monitor economic development in the oil exporting states is stressed. Other such policy details are covered in section 3. The acute shortcomings of schemes advocating compensation for countries' exports of labour are detailed in Part 6.
Above all, though, planners in the region who intend to
aid the capital poor states must not devote themselves t-ctally to the p2ethcra of opportunities for action in the short term, under present day conditions of labour shortage. Much can and should be done to make more effective the ad hoc policies




-xiv
already in train to maximise benefits from migration for employment to all parties involved. Care should be taken, however, that such actions do not make conditions worse for the capital poor states in the future, when their labour is only demanded in much smaller numbers by the oil rich states.




Part 2. THE BACKGROUND TO AND GENERAL PATTERNS OF GRANTT LABOUR
MOVeMENTS IN THZ ARAB WORLD
2A Introduction
J
In 1975 there were over two and a half million Arab
workers and their dependants living in Arab states other than
their own(1). Since then the number of Arab workers living outside their home nation has risen by some 9 per cent; in
early 1979 it is estimated that there were 1,570,CCO Arab workers
iving abroad2).
Apart frm these Arab migrants, in January 1979, the
authors estimate that there were some 975,000 non-Arab migrant wor-kers employed within the Arab world. In total
there were over 2 ,50,CC migrants for employment in the Arab
Near East in 1979.
The sheer volume of migration for employment, its relative
importance within the labour market of the Arab world, the
impact that migration for employment has upon economic development, and the mutual interdependance between nations that
labour exporting and importing brings about have made migrant
labour movements a leading issue of the contemporary Near East.
The concern with labour migration of national governments
within the area has grown as they have perceived the advantageous and deleterious impacts of migration for employment upon economic development. Consequently, international transfers of labour are featuring increasingly in social and economic planning within the Arab world.
Despite a contemporary concern with international migratic
for employment in virtually all countries of the Near East,




there has not yet been any regional or unified approach to
what is acknowledged to be a challenging issue. Even national policies have been slow to evolve beyond a short
term and ad hoc basis. As a result, government action in the Near East directed toward labour movement has been pragmatic, changeable, inconsistent and often contraditory. The only characteristic that policies have shared is relatively ineffective application.
Consequently the patterns of labour movement, resulting from some extra=inazily powerful labour market forces, have become deeply entrenched. The desire of the oil exporting nations to develop rapidly has tended to overshadow other longer term considerations of economic or social planning. As a result, the flows of migrant labour have become, of themselves, a major detezmin-ant of the nature of economic development in both labour supplying and labour importing states.
This significance of labour movement has caused both
countries of origin of migrant labour, and countries in which the migrants find employment in the Arab world to consider international exchange of manpower as one of their most crucial policy issues of the next decade. A range of issues from continued economic development to political stability depends upon answers that planners produce to maximise the returns from migrant labour movements to all governments and individuals concerned.
The importance of evaluation of migration for employment and its impact in the Near East is therefore considerable to all international agencies and aid donors with interests in the area.




-3
2B The Distribution of Wealth in the Near East
The direction, volume and pattern of international
migration for employment are determined essentially by the uneven distribution of oil wealth in the Near East and the
investment of this oil wealth. The exploitation of oil resources,and the investment of royalties to develop the
domestic economies of the oil rich states have led to wide
disparities of economic development and per capital income
between the Arab states. It is this range of per capita
incomes which has determined the fundamentals of international
labour movements in the Near East.
Oil exporting and non-oil exporting states can be referred
at (3)
to as "capital rich" and "capital poor" states respectively
This crucial distinction underlies the migration system.
Capital rich and capital poor states can best be distinguished by reference to gross national product per capital.
Table 2.1 ranks the major Arab states by gross national product
per capita.
The Table shows gnp per capita ranging from almost $16,000
in Kuwait down to $250 for the Yemen Arab Republic(4)
this disparity, exaggerated in effect by the relatively short
geographical distances over which it occurs, that is the
essential motivating force behind migration for employment in
the Arab world. The authors choose to distinguish three
clusters of states according to gnp per capita:
(a) The true capital rich states enjoy per capita incomes
in excess of $4,000.




-4
Table 2.1. Selected Arab States -Ranked_ by Gross National Product per capita, 1976
State Gnp per capita
us $
Kuwait 15,840
United Arab Emirates 13,990
Qatar 11,400
Libyan Arab Jamahiriya 6,310
Saudi Arabia 4,480
Oman 2,680
Bahrain 2,140
Iraq 1,390
Tunisia 840
Syria 780
Jordan 610
Sudan 290
Yemen (PDRY) 280
Egypt 280
Yemen (YAR) 250
Source: World Bank, 1978, Table 1, pp. 76-77 and p. 114.
(b) The capital poor states, falling at the bottom of
the ranked Table, have per capita incomes of less than $1,000 which range from $840 to $250. Four countries listed have a particularly low level of gnp per capita : the Republic of the Sudan, the Peoples' Democratic Republic of Yemen, Egypt and the Yemen Arab Republic.
(c) The states of the Sultanate of Oman, Bahrain and Iraq fall into an intermediate group, between the capital rich and capital poor. This is because of relatively meagre oil endowments in the cases of Bahrain and the Sultanate of Oman. In the case of Iraq, however, it is the large national population which serves to deflate the value of gross national product per capita. Indeed, as will be shown, differences in population size account for the major part of the variation in




per capita incomes amongst the capital rich states in the
Table
State incomes from oil are shown in Table 2.2. Those
Arab states missing from this Table generally fall into the
capital poor bracket.
Table 2.2. Major Near East Oil Producers : Production and
Revenues from oil 1977
State (million barrels a- day) ($ billion)
Saudi Arabia 8.8 37.8
Iran 5.2 23.0
Iraq 2.1 9.6
Libya 2.0 9.4
Kuwait 1.9 8.5
United Arab Emirates 1.9 8.3
Algeria 1.1 5.6
Qatar ........ 0 ................. 1.9
Source: Shell Briefing Service, 1978, p. 9
In the Near East (including Iran), Saudi Arabia
dominates in terms of. oil exports and oil revenue. The Kingdom
enjoys revenues almost four times those received by the next most important Arab oil exporter Iraq. The exports of oil from Iraq, Libya, Kuwait and the United Arab Emirates are all
of the same order they each receive between $8 and $10
billion per annum. Their differential ranking in Table 2.1
is explained by the marked variations in the national populations of these states (see Table 2.3).
2C Populations of' the Arab States
It is because the national population of Saudi Arabia
(at 4,593,000) is, relative to Kuwait (472,000) and Libya
(2,089,0OO), quite large, that these latter two states rank
above Saudi Arabia in terms of gnp per capita (Table 2.1).




-6
Table 2.3. Major Arab States- Indigenous Populations Ranked
by Size
State Indigenous Population Year
Egypt 38,228,000 1976
Morocco 18,400,000 1977
Algeria 16,940,000 1977
Sudan 14,113,600 1973
Iraq 11,124,000 1975
Syria 7,335,000 1975
Tunisia 5,570,000 1975
Yemen (YAR) 5,037,000 1975
Saudi Arabia 4,592,500 1975
Jordan 2,616,700 1975
Lebanon 2,400,000 1975
Libya 2,087,900 1973
Yemen (PDRY) 1,660,000 1975
Oman 550,000 1975
Kuwait 472,100 1975
Bahrain 224,700 1976
United Arab Emirates 200,000 1975
Qatar 67,900 1975
Total 131,619,400
Source: Author's estimates from official sources, see
International Migration Project Country Case Studies
for details of the derivations.
In terms of potential economic development, it is a cruel
irony that, generally speaking, in the Arab world it is the
states without oilwhich have the larger populations. In fact
Egypt, the most populous state in the Near East with
38,228,000 inhabitants, does have oil, producing over 400,000
barrels of oil per day. This is an amount equivalent to
Qatar's production. All of Egypt's oil, however, is used
domestically, and the fact that her population is 630 times
as large as Qatar's means that Egypt ranks firmly near the
foot of the league table of oer capita incomes.
Table 2.3 shows that the range of national population
sizes of Arab states is considerable. Egypt's 38,200,000 is




-7
followed by Morocco (18,400,000), Algeria (16,900,000) and the Sudan (14,100,000). In-contrast, tiny Qatar only comprises 68,000 nationals the United Arab Emirates are rather larger at 200, 000 (though the wealthier and most important Emirates of .Abu Dhabi together only have less than 100,000
* nationals) ; of the sae scale is Bahrain with 225,000 nationals.
Kuwait and the Sultanate of Oman are slightly larger with
national populations of 472,000 and 550,000 respectively.
Of the true capital rich states,, only Iraq has a substantial population (11,100,000). Iraq's particular combination of resources a substantial population, large oil endowment, and extensive cultivable area suggests an especially large
potential for economic development.
The two capital rich states of the Kingdom of Saudi
Arabia and Libya, with populations of 4,600,000 and 2,100,000
respectively, are already finding that even these numbers do not
comprise a sufficient population from which to draw a labour force to man a modern industrial sector. Nor do they amount
to a substantial domestic market.
Population growth is serving to aggravate the differences
in wealth between the Arab states shown in Table 2.1. Despite
their considerable differences in size and financial wealth,
all the indigenous populations of the-.region have in coon a
high rate of population increase. Few states have natural
growth- rates of less than 2.5 per cent; many are growing at
much higher rates.




-8
It is the varied absolute scale of national populations
combined with differing resource endowment in the Arab world
which make these high growth rates so significant. At
recorded rates of increase, Kuwait's indigenous population is
doubling every 16 years. Egypt's doubles every 30 years.
However, when (at present growth rates) Kuwait's population doubles in 1991, her indigenous population will be about 950,000; Egypt's population will then be some 55 millions.
Such continued population growth in the capital poor states makes substantial improvement in per capita gross national product difficult to effect. Indeed, already in the case of Egypt and Morocco, population growth is regularly cited as the most serious obstacle to improvement of living
(6)
standards and economic development The impact of population growth upon the attempts at economic development in Egypt will become yet more acute in the future. In several of the capital poor states, growth at constant prices in per capita terms is very small; they can only just maintain present standards of living. Yet it will be several years before the present high fertility rates fall sufficiently to slow the growth of population in the capital poor states.
In contrast, there is no particular reason for capital rich states to constrain their rate of natural population growth. Indeed, they would be expected to continue to encourage population growth. Their national populations are small, so that absolute numbers involved in increases are' of a completely different order to those encountered in the capital poor states. Moreover, these capital rich countries perceive




themselves as being short of manpower, and so are prepared to
encourage population growth in order to secure larger
national workforces in the future-.
In any case, given the supply as of capital available in
these oil exporting states, real growth in per caaita terms
I
will continue, and could. accelerate further, even with sharp rates of population growth. Under these circumstances it is ironic that the demographic transition the falling away of fertility rates, with consequent slowing in the rate of population growth will certainly occur first in the capital rich states (despite their pro-natalist policies). This means that population growth in the Arab world will serve to increase the
differentials in personal incomes and wealth within the Arab
world over the remainder of this century.
It is probable that the capital poor will experience falling
levels of gross domestic product in real terms per capita, whilst the capital rich will continue to forge ahead with
further economic growth.
S The National Labour Forces of the Arab States
Table 2.4 shows the labour forces of some capital poor Arab states. The overall crude participation rate is almost. 30 per cent. This rate would, in the authors' view, be
significantly higher if all women who work on the land were consisten tly recorded in censuses and in employment sur.-veys as "in employment".. In fact they are rarely so recorded and therefore are. generally cmitted from discussions of the workforce; it should be borne in mind though, that women feature significantly in agriculture! e -loyment in all the countries listed on Table 2.4.




-iO
Table 2.4 Capital Poor States : National Populations and
Workforces ranked by Size, 1975
Crude
State Population Workforce participation
rate (%)
Egypt 37,364,900 12,522,200 33.5
Sudan 15,031,300 3,700,000 24.6
Syria 7,335,000 1,838,900 25.1
Yemen (YAR) 5,037,000 1,425,800 28.3
Jordan (East Bank) 2,616,700 532,800 20.4
Yemen (PDRY) 1,660,000 430,500 25.9
Total 69,044,900. 20,450,300 29.6
Source: As in Table 2.3
The most relevant point to this analysis is the general
scale of these workforces. Only the Yemen (PDRY) has a labour
force of less than 0.5 million by the relatively limited
definition (excluding agriculturally active women) utilised
here. This contrasts markedly with the labour forces of the
capital rich states, listed in Table 2.5.
Table 2.5 Capital Rich States : National Populations and Workforces Ranked by Size, 1975
Crude
State Population Workforce participation
rate (%)
. . ..g... .. . . . . . ..r t e
Saudi Arabia 4,592,500 1,026,500 22.3
Libya 2,223,700 449,200 20.2
Oman 550,00 137,000 24.9
Kuwait 472,100 91,800 19.4
Bahrain 214,000 45,800 21.3
United Arab Emirates .200,000 45,000 22.3
Qatar ............. 6-7,900 12,500 ....... 18.4
Total ........ 8,.320,200, 1,807,800 21.17
Sources: These figures are authors' estimates, based on a large
number of official and private sources; for derivation
see Birks, J. S., and Sinclair, C. A., International
Migration Project Country Case Studies.




In view of their population sizes (which in the states listed in Table 2.5 average some 1,040,000 people) the workforces of'the capital poor states are obviously smaller, averaging 226,000.
Taken overall, the workforces of the capital rich states comprise 1,800,000 persons. This amounts to only less than one-tenth of the total workforces of the capital poor.
Examination of Table 2.5 shows that not only are the populations of the capital rich states smaller, but the crude participation rates in the capital rich states are also lower than in the capital poor states. The crude participation rate of the capital rich stands at less than 22 per cent (compared to almost 30 per cent in the case of the capital poor). Amongst the capital rich, the crude participation rates range from an extremely low 18.4 per cent in the case of Qatar, to 24.9 per cent in the Sultanate of Oman. Not only are workforces in the capital rich states small, they are smaller than would be expected from total populations of this size.
Three main factors lie behind the low c-ude participation rates of the populations of the capitaZ rich states.
First, these populations are very youthful, a larger proportion being aged less than 15 years than in a more normally agedistributed population. For example, of. Qatar's tiny population of. 68,000, over 44 per cent are aged less than 15
years. In Iraq, almost 49 per cent of the population is aged less than 15 years. The figure for Saudi Arabia is also over 48 per cent (8). This large proportion of the population being youthful means that for each state, only a relatively small




proportion falls within. the age range from which the economically active are drawn. Therefore, in each capital rich state, the number in the labour market is considerably fewer than in similar sized populations with a more normal distribution by age.
Secondly, the large amounts of capital available to the governments of these capital rich states has enabled a widespread expansion of secondary and university education during the 1970s(9. This has held within the educational system boys, and to a lesser extent girls, who would otherwise have entered the workforce at, say, age 18. This reduces the labour force significantly, its effect being compounded by the youthful age structure of the population.
Thirdly, the labour force is reduced by women not
generally working in wage employment in these states, except in a limited number of professions; teaching, nursing, and in certain women's organizations. The number of employed women in the modern sectors of these states is very small.
Non-participation of women in the economy is partly a result of social and religious custom which frowns upon
(10)
females working outside the home0. Both Saudi Arabia and
Libya have legislated recently to reduce the numbers of women entering employment. Another reason for the exclusion of women from the workforce in the capital rich states is circumstantial. Typically, muslim women do work in traditional activities, in particular as farm workers, as in agricultural sectors of the Yemens and Oman and the capital poor states in general. However, in the Gulf states, the agricultural sectors,




- 13
which were anyway limited in extent by climate, have
decayed In consequence, traditional employment for
women has been lost, but not replaced by new opportunities in the modern sector. It should be noted, though, that the
United Arab Emirates have recently taken a more positive
attitude towards women's employment, expanding the numbers
in the police and public administration.
Another factor depressing numbers of women working in
the modern sector is their particularly low level of
educational attainment even lower than that of menfolk in
these societies. Investment in education is rapidly changing this, however; increased participation of women in the modern
sectors of the capital rich states is to be expected.
In view of the very limited size of the indigenous workforces it is perhaps surprising that the capital rich states
have embarked upon the course of domestic economic development
that they have one of rapid industrialisation.
The reasons behind and the nature of this development art
now examined.
2E Economic Develoment of the Capital Rich States
The central problem facing the capital rich states, in
particular since the oil price rises of 1973, has been, and is:
how to maximise their oil income in the long run. Planners
had a variety of policy options open within certain constraints,
namely, the maximum rate of extraction of oil, the amount that
could be sold, and uncertainties over the price.




-4
Most of the oil exporting countries chose to extract and sell virtually as much oil as possible, facing subsequently the problem of what to do with the resulting surplus revenues; there are two alternatives to invest the monies either (a) at home or
(b) abroad(I2)
The dependance upon the exporting of one resource for income was causing these oil exporting states concern. So was the real rate of return that investments abroad would yield. These factors, together with the need to recycle oil dollars created a strong incentive for the oil exporting states to industrialise their domestic economies.
Thereby they transformed financial capital into physical assets, which would yield an income independent of oil. Planners considered that general social and economic development would be engendered by the process of industrialisation.
Establishment of heavy industry was also facilitated by the cheap source of power represented by natural gas.
Although the historical moment when modern development
began in each capital rich state varied (largely according to how liberal leaders were in distributing wealth and welcoming change), the path of development in them all is remarkably similar. Conceptually, each oil exporter can be placed somewhere on this same path of development. The most wealthy states are not always the most modern: Saudi Arabia's development, for example, was slow until 1973. However, all the capital rich states have adopted very similar development objectives. They are following a common form and since the oil price rises of 1973, a faster pace of economic development.




The shared features of the oil exporters economic development plans include a large and expanding government sector, ambitious industrial development programmes based upon heavy industry, and an ever increasing standard of welfare and income. Today almost every oil rich state of the Near East envisages industrialization as an essential and central component of domestic development. This creation of industrial sectors has necessitated a rapid expansion in infrastructure provision, as have the burgeoning demands and aspirations of the national populations. As well as establishing industrial sectors, therefore, the provision of electricity generation plants, roads, distillation units, ports, airports, telephones, hospitals, clinics, schools and other physical and social infrastructure absorbed much government finance and effort.
Before 1973, industrialization and infrastructure provision were proceeding at a relatively gentle pace. Infrastructure provision took much of the (relatively limited, compared to 1974) financial resources of the governments. IndusI
trialisation was planned on a substantial, rather than spectacular, scale.
The 1973 oil price rises transformed the oil exporters'
ability to invest in infrastructure but particularly in industry. As a result, the pace of development in the oil exporting states accelerated dramatically as.plans for heavy industrial areas and secondary industry were effected on a new scale, almost unprecidented in the Third World. However, a principal constraint to this economic transformation of the capital rich states was a shortage of manpower. Indeed, planners in the




-16
capital rich saw labour shortages as'the major constraint to development, though patently shortcomings in the infant physical infrastructure provision of these states was also a mnaj or brake upon industrialisation.
The resulting demand for labour of virtually all skills and qualifications in the oil exporting states, remarkable in its strength because of the financial resources of the exporters combined with their urge to develop rapidly, is the essential motivating force, expressed in terms of high rewards for labour, behind the international labour migration system.
The effect of the economic development upon the region' s labour market was great. Apart from the growth in employmentin these capital rich states being from a very small base, the rapid growth in the demand for labour was aggravated by the capita! rich states' embarking;. together on their development plans' most lab our intensive state -the construction phases.
In the capital rich states, the governments' response to this manpower shortage was to allow market forces to reign. Labour was imported with very little official constraint but for the process of obtaining visas. This became slow as the government departments granting entry permits were swamped by
(13)
applications, and so acted as an informal rationing process
Nevertheless, as is now well known, the result of the development of the oil exporting states was an inflow of workers of massive proportions. Most of these incoming workers originated in the capital poor states of the Arab world, whose contrasting experience of economic development is now examined.




- 17
2F Economic Development in the Capital Poor States
Unlike their oil exporting neighbours, the capital poor
states have not experienced, and are not about to enjoy a
spurt of economic growth. They can only expect to maintain
their present level of development. Growth of gross domestic
product, in real terms, is small, and on a per capita basis,
is often falling, as in Egypt and Jordan (14).
Economic development in the capital poor Arab states
resembles that in other developing countries in the Third
World, being characterised by high rates of population
increase, low domestic savings rates, low rates of growth of
fixed domestic capital formation, with high rates of underand unemployment. Recently, they have also been characterised
by high rates of domestic inflation, associated with weak
currencies.
As in most Third World countries, the rapid rate of population increase of the past two or three decades is largely
responsible for many weak facets of their economies. It has
resulted in a large share of resources being allocated to
health services (which partly engenders further population growth), and education. Large numbers of educated leaving
school as well as those with little schooling cannot find jobs, and governments have mopped up many of the erstwhile
unemployed (15)
Industrial development in the capital poor states has
been limited, and often unsuccessful. Typically of a capital intensive nature, the industrial growth which has taken place is not very effective in generating employment. Agriculture,




which because of the limited industrial development, often provides employment for a large proportion of the labour forces in the capital poor states, is often in decline and in need of rationalisation, modernisation and investment U6). The inability of governments of capital poor states to expand productive employment, together with the paucity of alternative job opportunities in the private sector, has swelled the ranks of those who gain a living from the informal sector. Rural to urban migration has led to overcrowding in cities throughout the capital poor states, and in some cases living standards are extremely low. With the lack of formal employment, this internal migration has aggravated unemployment, underemployment, and contributed to the proliferation of the informal sector. The continued amed conflict with Israel has also drained the eichequers of Jordan, Syria and Egypt.
All this is in sharp contrast to capital rich states. Indeed the paths of development of the capital rich and the capital poor could hardly be more different. The contrasts are made more evident by their close geographical proximity. The capital rich states are confidently planning economic development on exotic levels (facilitated by oil endowments), while in the capital poor states all that planners hope to achieve realistically is the maintenance of per capita income.
So bleak have conditions in the capital poor states become that international migration for employment has seemed at times the only alternative to unemployment. It was therefore seen as an altogether healthy development.




Conversely, the capital rich states, embarked upon a
path of rapid industrial development, have found that imports
of labor have become an essential component of their
econCmic growth.
The spontaneous nature of the international transfer of
labour therefore appeared to be advantageous to all nations
in the Arab world.
2G The International Transfers of Labour
The prevalence of unemployment and underemployment
amongst the relatively large workforces of the capital poor
states, together with the small indigenous workforces and
ambitious development plans of capital rich states were the pre-conditions of the active labour migration system which
has characterised the Arab world since oil was found. Since
the 1950s there has been a steady transfer of labour from
the capital poor to the capital rich states within the Arab
world.
The demand for labour in the oil-exporting states reached
a new pitch after 1973, when the new rate of economic development ensured. After this time, the demand for labour was both
qualitatively and quantitively extensive, providing the workforces essential to such rapid development programmes. The
scale of migration transformed as a consequence. So small are the indigenous workforces of oil rich states that today the migrant workers represent almost the entire workforce in
some cases. In some sectors of the economy requiring
specialised skills, immigrants do comprise the entire workforce.




Similarly, the scale of transfers of labour are such
that substantial proportions of the labour forces of some of
the capital poor states have been exported.
Table 2.6 illustrates the extent to which non-national
labour contributes to the labour forces of the capital rich .states in 1975. Even in the largest economy and labour market that of Saudi Arabia expatriate workers accountfor more than 40 per cent of the economicaLly active. The
countries with smaller economies, Kuwait and the United Arab
Emirates, rely on migrant labour to the extent that 69 per
cent and 8S per cent respectively of the labour force are nonnational. Qatar, the smalLest economy, depends upon a labour
force in which more than four out of every five workers are
(17)
expatriates
The large majority of migrant workers in 1975 were Arabs. Table 2.7 shows that, in the principal countries of employment, Arabs accounted for 75 per cent of all migrants, Asians 17.6 per cent, Europeans 2.1 per cent and "others" about 5 per cent.
Overall, almost half of all migrants work in Saudi Arabia. Libya, the United Arab Emirates and Kuwait together account for 48 per cent. Of all migrant workers, Bahrain and Qatar, with their smaller economies, provided employment for 5 per cent of all migrant workers. in 1975.
Most Arab migrants work in Saudi Arabia (57 per cent); this is only to be expected in view of the Kingdom's central position in the region, physical size, enormous oil revenues,
coimensurate development objectives and political inclinations.




Table 2.6 Employment by Nationality in Capital Rich States, 1975
Nationals' % of Non-Nationals' % of Total
Employment Total Employment Total Employment
Saudi Arabia 1,026,500 57.0 773,400 43.0 1,799,900
Libyan Arab Jamahiriya 449,200 57.5 332,400 42.5 781f600
Kuwait 91,800 30.6 208,000 69.4 299,800
United Arab Emirates 45,000 15.2 251,500 84.8 296,500
Bahrain 45,800 60.4 30,000 39.6 75,800 1
Qatar 12,500 18.9. 53,800 81.1 66,300
Total 1,670,800 50.3 1,649,100 49.7 3,319,900
Source: Hirks, J. S., and Sinclair, C. A., International Migration Project, Country Case Studies.




Table 2.7. Migrant Workers by Ethnic Origin and Country of Employment, 1975
Ethnic Origin
Iranian, Turkish,
State Arab Asian European Migrant workforce % of
African and other Total Total
% of % of of a of column.
No. state No. state No. state No. state No.
total total total total
Bahrain 6,200 20.7 16,600 55.3 4,400 14.7 2,800 9.3- 30,000 1.8
Kuwait 143,300 68.9 33,600 16.1: 2,000 1.0 29,100 14.0: 208,000 12.6
Libyan Arab
Jamahiriya 310,400 93.4 5,500 1.7 7,000 2.1 9,500 2.9 332,400 20.2
Qatar 15,000 27.9 34,000 63.2 800 1.5 4,000 7.4 53,800 3.3
Saudi Arabia 699,900 90.5 38,000 4.9 15,000 1.9 20,500 2.6 773,400 46.9
United Arab
Emirates 62,000 24.6 163,500 65.0 5,000 2.0 21,000 8.4 251,500 15.2
Total 1,236,800 75o.0 291,200 17.6 34,200 2.1 86,900 5.3 1,649,100 100.0
Source: As Table 2.6




TaDle 2.8. Arab *Hwant Warkera in the Arab Region# 1975
Cou.401.0 of Octal. is Distributt" bet-so. coos"104 of wmplvmw.tj
0 froa or ..191.) Egript I.-. IVAN J..d- "4 r- 4PDPVI 8jxL* Uboam too" T-t#ta esaft Ita% 11 11& worocce "a Total
IpAl.stj- 41%.vto
It) to) (%I tot I %) 01 01
95, OW 1 2).91 100,400 4 96.61 IIS.OW 1 66.11 55.003 417.91 IS.000 1 31.1) 20.0W 1 40.3) 3S.Ow 1 76.3) II.Soo I 4S.6) 3.000 1 9.71 1.000 4 76.41 6".000 4 54.01
140.11 12S.01 1 1.9) 42.31 (2.01 (11.0 (2.5) to-31 40.61 (100.01
14by. 219.500 1 51.61 14,150 1 $.U 11.000 4 IL11.11) 11.700 4 It.14 7,000 1 IS-31 30, sw 1 99.6) 2.500 1 101I.Il U0.350 1 24.01
471.Sl 4 4.61 14.11 11.61 12.3$ J12.41 10.0) 4100-01
)71656 1 0.41 3.731 1 1.01 471141 1 141.01 6.650 (11.1 14.541 4 34.41 1,711 1 14.41 wis 1 1.91 1 0.0 3.6110 1 11.0 11,199 1 07.31 247 1 3.01 47 1 0-01 143.200 1 U31'
426.11 it.*) 111.)) (6.01 Ut.$) IS-01 (0.61 W-of 42.61 112.71 10.2) (0.0) floo.01
O-A.s 12.$00 1 3.0 Sao 1 1.41 1 1 5.51 $00 1 6.41 4.500 4 6.41 4,500 4 1.01 1, Sw 1 1.21 34,000 1 36.41 Soo I ZA 11000 1 ts-21 62.000 1 4.01
44.;"1 4100.0
S.300 1 1.4 20.000 1 ;sw I U.WQ 9
7.000 1 3.11) slow 1 1.11) 1.0m 1 4.0'. 200 1 0.4) IS.200 1 1.31
1146.11 132.11) 1 Is. it (100.01
'. a 2,*SO 1 0.71 .1.250 1 *.a) 4.QW 1 9.3) 11250 1 1.01 ISO 1 1.11 Soo 1 1.01: 400 0.91 1.4170 4 4.91 14,0170 1.11
11S.U to. 41 140.31 14.41 IS-0) If 1 42.71 113.61 OW-01
4.600 1 1.21 tw 1 .0.01 1.400 1 0.01 100 1 0.11 400 1 0.61 1.100 1 1.21! son 1 1.11 too 1 0.31 300 1 4.61 9, wo 1 0.71
412.11 (1.11 119.21 U.11 WS) 412-Si 000.01
uu.c.tp 1.211 4 0.11 1.111 1 0.4) $1# 1, 0.2) 1.123 1 1.61 so 1 0-1) 129 1 d. 31 ow 1 OM 1.341 1 3.61 134 1 0.61 6,200 1 0-51
(41 920-0) (101.11 116.11 1. it It. 0 (&.St. 122-31 (2-01 4100-0
Irt- tvAbi 2.000 4 a.11) 2w 4 0.1) ISO 1 0.3) 3.350 1 0.2)
tot ($$-I) It's) (6.41 iloo-01
'get" 397154S 1100.0) "Ollas Isoo.40 364.,111 floom 70,4101100.0) 70 41S 4100.01 49.661 1100.0) 41,673 1100-01 38.649 400.01 34,413 (10041 30,635 1100.0f #.141 floe.ft 11.1147 4100." 1.29S.ISO 1100.01
it) 43G.11 112.41 420.41 43.51 111.41 11.01 0.111 ,3.01 13-01 (0.51 10.20 1100.01
4ckto Indicat" no m4grauts for this matta"Itty K*cor4*4.
1 11JUM4 b&*-d On 0 SLOS, J. B. and filinclair. C. A., Counig Case Otu4i*&, Santis. Arabia, E"*tt, ashrola,
O#tar, Unit.4 Arab E.Iratas. Libya. Jordan, 19 :1 Ibiazi, Morocco.
_qIpt ltieub, c. Oman. mr-aTui act "uZAIZ-A, Dk -rhwm
lZe. p6irei!7 LiUmates of tatarnaticial Migration




- 24
Together Kuwait and Libya account for an additional 37 per cent of all Arab migrants. Libya's proximity to poor Arab countries with relatively large populations (Tunisia and Egypt) explains the large number of Arab migrants there. The explanation for Kuwait's large Arab community corresponds to that given earlier for Saudi Arabia. In addition, the length of tie for which labour importation has been establishedis important; Kuwait was one of the earliest oil exporters to develop. As a result, a tradition of labour migration to Kuwait has established, which ensures a constant supply of Arab labour.
Closer inspection of the characteristics of Arab migrants reveals that, in 1975, Egypt, Jordan and the Yemen Arab Republic together accounted for 73.5 per cent of the total migrant workforce (Table 2.8). Most Egyptian migrants in 1975 were working in Libya, though an estimated 95,000 (24 per cent) were in Saudi Arabia. Egypt's proximity to Libya is the chief explanation for their substantial presence there.
Almost all Yemeni migrants work in Saudi Arabia: not
only does the Yemen Arab Republic border with Saudi Arabia but in 1975 wages were exceptionally high in the latter country.
Jordanians and Palestinian migrants in 1975 were working mainly in Saudi Arabia, but also in Kuwait, Libya and the United Arab Emirates. Migrants from this group are generally well educated and consequently highly mobile. They often occupy senior positions in government and business circles.
By 1975, some Asian labour was being used in the Arab
world, but on a small scale. Only in the United Arab Emirates




and the Sultanate of Oman did Asian labour make a substantial
contribution to the labour force in 1975.
In 1975, the majority (57 per cent) of Asian workers in
the Arab world worked in the United Arab Emirates (Table 2.7).
Indians and Pakistanis have long been involved in
economic development in the Near East. As traders and
entrepreneurs they had existed, in small numbers, under the
traditional economic order in the peninsula. In World War II
they were introduced in substantial numbers as part of the
British war effort in the region. Subsequently, Indians and
Pakistanis continued to make a contribution to the labour
market, becoming associated with certain tasks and established in particular countries, such as Kuwait, Saudi Arabia and Bahrain.
Until 1970, though, numbers of workers in the Arab world from
the Asian sub-continent were small, and their participation
informal and spontaneous.
2H The New Scale of Economic Development Transforms Migrant Labour
Patterns 1975
In 1975, Arabs provided the majority of migrant workers
within the Near East at some 1.3 million out of a total
number of migrants of about 1,700,000.
However, at that time several aspects of the labour market
were changing, particularly in response to the transformation
of the economics of the Arabian peninsula. The volume of
demand for labour was increasing dramatically as spectacular
development plans of the capital rich states were put into
operation with enhanced oil revenues, and as industrialization
got truly under way.




- 26
By 1975 the development plans, redrawn at a new scale after the 1973 price increase, were being implemented. Targets embodied in them were being exceeded. The increased labour demand engendered by this rapid development of the capital rich states occurred just at the time when Iranians and Iraqi migrant workers were returning home. I ran and Iraq, which had previously supplied a significant amount of labour to Saudi Arabia and the Gulf States, began to develop their own economies, consequently large numbers of Iranians and Iraqis were attracted home by the prospect of opportunities in their own countries.
contemperane ous
These changes, the expansion in labour demand and the /
withdrawal of part of the supply, increased markedly the pressure upon the capital poor Arab states to supply yet more manpower. This was experienced in the capital poor states as direct recruiting in Cairo, Anman andTKhartoum of labour by concerns operating in the capital rich states, and by the offering of rapidly rising real wages in the capital rich states. However, by 1975, a relatively high proportion of all potential migrants in the Arab labour exporting countries was already working abroad.
Indeed, the proportion of workers abroad from Jordan (East Bank), the Sultanate of Oman and the Yemen (YAR) was close to one-third in 1975 (Table 2.9). In Syria, Egypt and the Sudan the number of migrants abroad, though forming a small proportion of their workforce, was also close to the potential number of workers who were prepared or able to migrate.




- 27Table 2.9. Migrant workers and domestic workforces of labour
sending countries, 1975
Country- Size of Workforce Number of Workers Proportion of Abroad Workforce Abroad
Jordan
(East
Bank) 532,8001 1150,000 28.1
Oman 137,0002 38,4132 28.0
N. Yemen 1,070,0003 290,1284 27.1
Syria 1, 838,948 70',4156 3.8
Egypt 10,756,0007 397,545 8 3.7
Sudan 3,700,0009 45,87310 1.2
TOTAL 18,034,748 992,374 5.5
Source: (1) Based on: Birks, J. S., and Sinclair, C. A.,
Country Case Study : Hashemite Kingdom of Jordan
International Migration Project, Department of
Economics, Durham University, October 1978.
(2) Birks, J. S., and Sinclair, C. A., The Sultanate
of Oman : Economic Develoment, the Domestic
Labour Market and International Migration,
Migration for Employment Project, World Employment Programme Research, Working Paper No. 27.,
(I.L.O. Geneva), May, 1978, Table 23, p. 84.
(3) Central Planning Organisation, Pooulation
Statistics in the Yemen Arab 'Republic, Sana'a,
1976, Table 1, (Arabic).
(4) Socknat, J., and Sinclair, C. A., Migration Abroad
for Employment and Its Imoact on the Yemen Arab
Republic Topic Paper, International Migration
Project, July, 1978, Table 23, p. 37.
(5) Central Bureau of Statistics, Damascus, Statistical
Abstract, 1977, Table 11/3, p. 144.
(6) Sales, M. E., Country Case S'tudy : Syrian Arab
Republic, International Migration Project,
Economics Department, October 1978.
(7) Ministry of Planning, Egypt, Five Year Plan,
1978-82, Vol. I., Table 4, p. 31 (Arabic).
(8) Birks, J. S., and Sinclair, C. A., Country Case
Study : Arab Republic of Egyqvot, International
Migration Project, March, 1978, Table 19, p. 38.
(9) Estimate based on : Department of Statistics,
Khartoum, Preliminary Results of the 1973
Population Census, 1977, Table 16 (Arabic).
(10) Birks, J. S., and Sinclair, C. A., Country Case
Study : The Republic of the Sudan, International Migration Project, March, 1978, Table 34, p. 58.




- 28
Nevertheless, during 1975 and 1976, when the opportunities
for migrant workers in oil rich states became even more attractive, increased numbers of workers departed and soon thereafter
the actual number of migrants from these states coincided with
the potential supply.
The rather limited extra number of workers drawn from the
Arab supplying states in 1975/76 fell-well short of the requirements of the burgeoning demands of the oil-rich states. As a result, the rapidly industrialising wealthy states had to turn
elsewhere for additional supplies of labour.
21 The Changing Perspective of the Migrant-Receiving Countries
The shortage of Arab labour in the region meant the oil
exporters had to broaden their areas of recruitment of labour.
The source of labour to which the capital rich states turned in their search for more manpower was Asia, in particular the
Indian sub-continent and the countries beyond.
Since 1973 the migration of Indians and Pakis :anis to the
Near East has become more organised through "agencies" in
response to the new scale of opportunities represented by the increased demands of the capital rich states. The consequent growth in the importance of the Asians in the labour forces is
exemplied by the data for the Gulf states in Table 2.10.
Within the four Gulf states of Kuwait, Bahrain, Qatar
and the United Arab Emirates a marked shift in the composition
of the labour market was in train by 1975. Between 1970 and
19"75, the proportion of jobs occupied by expatriate Arabs fell
by 16.5 per cent. The Asians' share of the workforce rose




- 29
Table 2.10. Workforces of Kuwait, Bahrain, Qatar and the United Arab Emirates, by ethnic origin, 1970 and 1975
1970 1975
Number per cent Number per cent Nn-National Arabs 165,934 51.0 226,350 41.7
Asians 83,869 25.8 247,720 45.7
Iranians, Europe ans
and Others ..75,295 23.2 68,432 12.6
Total 325,098 100.0 542,502 100.0
Nationals 147,560 31.2(1) 195,115 26.5(1)
GRAND TOTAL .472,658 100.0 737,617 100.0
Note: (1) Percentage of all employment
Source: Birks, J. S. and Sinclair, C. A., International
Migration Project, Country Case Studies.
from a quarter to one half of the total, their number rising
from 83,900 to 247,700.
These Asians were mainly Indians and Pakistanis. Factors
behind their increased participation in the Near East labour
market are of major significance for economic development
in capital rich, and capital poor states. Demand for
labour in the Arab world is transforning.
2J Formalised Supplies of Indian and Pakistani Labour
The most obvious expansion of the role of Indians and
Pakistanis in the economic development of the capital rich states is the one demonstrated in the United Arab Emirates.
This increase in the participation of Asians was both a cause and a consequence of the formalisation of Indian and Pakistani
labour supplies through a series of recruitment and manpower
supplying agencies.




- 30
The raison d'etre of these "agents", who are private
sector entrepreneurs from Asia, is to profit from the opportunies to gain from the migration of so many for employment.
Representatives of agents, living in the countries of employment, identify employers' labour requirements, and specify
skill levels, trades, and numbers needed. They supply these
requirements quickly by virtue of having counterparts in India, Pakistan and Sri Lanka, who have lists of would-be
migrants according to qualifications and availability. These applicants are trade tested before being despatched to the country of employment.
Therefore, just at the time when Arab labour was becoming difficult to acquire, expensive and of less predictable quality at all skill levels (as the potential level of Arab exports was approached. Indian and Pakistar labour of known skill and capability became available quickly and easily. This regularisation of the Asian-Arabian labour flow by agents, who could above all supply labour speedily, encouraged the rapid increase in utilisation of Indian and Pakistani labour in the capital rich states during their period of most frenetic development.
The governments of the Indian sub-continent tacitly encouraged these labour recruitment agencies in the early period of their establishment. The advantages to their nations of supplying migrant labour appeared marked. The deleterious aspects of the role did not appear likely to become significant in countries of such large populations and complex economies.




- 31
In 1977 and 1978, however, both Indian and Pakistani
governments intervened in this system of labour recruitment.
Intervention stazmmed mainly from abuse of human rights
suffered by employees recruited through labour agencies. It
is also of note though, in view of what follows in Section 3,
that some concerns have been expressed in Pakistan about shortages of certain types of labour,ostensibly brought about by the
scale of labour exporting.
The constraint upon the supply of Indian and Pakistani
labour resulting from government intervention has added strength
to the Oriental connection, to which the report now turns. 2K The Oriental Connection
Pormalisation of labour supplies to the capital rich
states has been taken to a new extreme by countries which have
recently entered,and now feature large in the Arab region as
suppliers of labour. The countries of south east Asia
referred to here as the Orient, and including the nations of
Indonesia, Korea, Malaya, Nepal, the Philipines, Taiwan and
Thailand have since 1973 come to account for a rapidly
increasing share of the labour market. In 1970, very few
migrants of Oriental origin worked in the capital rich states.
of Kuwait, Bahrain, Qatar, the United Arab Emirates and Saudi
Arabia; however, by 1975 they numbered some 15,000 workers.
It is estimated that today (1979) there are some 160,000
workers from the Far East in these states.
The swing towards utilisation of Oriental labour is the
result of the co-incidence of a variety of social and economic
policy aims of the governments of the capital rich states.




- 32
Disenchantment is growing in the capital rich states with the wider cultural and social implications of hosting large migrant populations. These fears, as yet nascent, are of increasing impact upon labour policy. Most generally, the indigenes of states like Saudi Arabia and the U.A.E. are becoming concerned at the possibility of being "swamped" by the immigrant communities associated with the migrant labour forces. The psychological implications of, for example, Qatari nationals comprising so few of the total population of their own country are great. The wider significance of this has been little evaluated. The feeling of vulnerability arises because of the imigrants' concentration in the more crucial sectors of the economy.
Apart from fears of numerical domination, there is concern amongst Arab .policy makers in the capital rich states over the considerable cultural (and, incidentally, racial) impact which the large expatriate communities have on the Arab indigenes and their customs. These fears are most r obviously a political reality in Kuwait, where the differing rights of the various classes of "national" have become the subject of open debate. Although less overt in the other capital rich states, these considerations feature increasingly in decision making, and are assuming significance in the shaping
(18)
of future economic development
These socio-cultural concerns are separate from (though
related to) the economic costs of supporting growing expatriate comunities. The establishment of nuclear family groups amongst the immigrant communities is a major aspect of their




- 33
growing political motivations and strength. As families
develop, so household heads in immigrant communities become
concerned to secure rights similar to those of the indigenes.
The growing disenchantment with the wider implications
of being a major country of employment appears to present
planners with a conflicting aim to what continues to be the
underlying thrust of economic and social policy in the capital
rich states of the Near East rapid economic growth based
upon industrialisat-ton. How, given the limited nature of and the constraints to utilisation of indigenous human capital in the capital rich states, can they continue their programme of rapid economic development and expansion without their populations becoming totally outnumbered in their own country? 2L Enclave Development in the Capital Rich States
The compromise chosen by the rulers of the oil exporting
states has been to separate physically new industrial areas
(upon which future growth and development will be based) from
existing urban areas. In this way, it is hoped, what are
perceived to be the undesirable aspects of labour importing,
(the close and prolonged contact between indigenes and
immigrants, and the economic cost of supporting expatriates
within the country of employment), will be minimised. Examples
of such "enclave" industrial areas are becoming numerous in
the capital rich countries of the Arab world : Shuaiba (Kuwait);
Umm Said (Qatar); Jebel Ali (Dubai); Ruwais (Abu Dhabi); Yenbo
and Jubail (Saudi Arabia); we;e all built on what amount to
"desert" sites away from major centres of population.




- 34
In order to limit the costs of infrastructure provision
and to facilitate the "containment" of the immigrant populations at these large industrial sites, there is a clear trend towards the recruitment of single, unaccompanied males to build them and, subsequently, also to run the plants. This enables the industrial areas to be operated on a "work camp" basis, with only a minimum amount of services provided for the all male population and labour force. Thus social and infrastructural overheads are minimised, and the growth of the expatriate population is kept to a minimum by the exclusion of the migrant labourers' families, who remain at home in the country of origin of labour. Such work camps,in which the men who operate these enclaves live, resemble the normal camps associated with the construction industry. However, the camps associated with enclaves are to be operated on a long term, rather than just a temporary basis.
The establishment of camps keeps workforces on these large projects within the bounds of the site area. Workers in enclaves mingle little with the indigenes and the established immigrant communities in the major urban centres. The cultural impact of the large expatriate labour forces is therefore minimized. In reference to "work camps" Sheikh Sultan Bin-Mohammed al Qasimi, Ruler of Sharjah, said "they (migrant workers) have caused problems, and have had an effect on life, on traditions, on everything". The U.A.E. plans to establish more labour camps outside towns and cities to house migrant workers 19).




- 35
L
The countries providing the la bour for this enclave form of development have been, almost w thout exception, Oriental. These south east Asian companies b ve taken on large scale contracts, and brought to the Ne; East workforces of all skill levels prepared to live and operate in these work camp conditions. The camps are provided by the contractors themselves as part of the project. Te Arab capital rich governments have therefore discharged responsibility for the pro(20)
vision of infrastructure for these migrant workforces .
One of the earliest major enclave contracts which set the pattern, was the dry dock in Bahrain(21). The Arab Shipbuilding and Repair Yard Company's facilities were built by South Koreans. The Koreans provided the entire labour force and expertise for the $30 million contract. Du-ri.Ag construction, the Korean labour force, who consisted only of single men (married men on single-status contracts), worked 12 hour shifts. They were entirely sufficient in housing, which they built themselves. Pood and recreational facilities were flown direct fr m Korea. After completion of the dock on time, the Koreans left Bahrain completely.
In their complete departure, the Koreans appeased one of the major fears of the governments of the countries of employment the dallying of workers after the completion of the contract for which they were brought in. 'It is this process by
which the more permanent cmunities of immigrants build up.
. The departure of the Koreans contrasted very favourably, in the minds of the Bahrainis, with the aftermath of the construaction of the alu.mnium plant for ALBA, when la--e numbers




- 36
of Pakistanis who had been employed building the plant remained after its completion. The aluminium plant was not constructed as an enclave. Its construction was integrated into the Bahraini economy, and the labour force into the Bahraini labour market as a whole. Many Pakistanis used this major contract to establish themselves and their families in Bahrain. They now consider themselves permanent residents. The growth of the Pakistani comunity in Manama is viewed as undesirable by Bahrainis, a factor behind the nature of the dry dock contract. The dry dock, which is an island site, comprises an excellent example of an enclave. It was its physical location which facilitated the easy isolation of the labour demands of the dry dock site from Bahraini labour employed in the economy at large.
A similar policy of enclave containment of labour forces has been adopted for the industrial development of Jebel Ali, Dubai. Here, isolation is achieved by siting the development away from Dubai city. The chief reason militating in favour of enclave development is the sheer volume of labour required for Jebel Al. Figures of estimated employment in 1985 (Table 2.11) are equivalent to the entire population of Dubai emirate in 1977.
This is typical of the future scale of labour demand in these enclave industrial areas. If this scale of demand for labour were to be met in the open market of the Emirates, it would be very disruptive, causing shortages in other facets of the economy. In particular, it would make arrivals of labour hard to monitor and control. Illegal immigration would reach new levels with consequent disadvantages.




-37
Table 2.11. Dubai : Employment Estimates for Jebel Ali by
Major Occupational Grouo, 1981 1985
.................... 1981 .. 19 85
Management-, professional and
technical workers 4,800 10,550
Supervisors, skilled manual
workers, foremen and office
workers 14,250 29,200.
Semi-skilled manual and office
workers. ............ ........ 2 4..450 . 51, .SSQ
TOTAL 43,500 93,600
Associated Populatim ..7.,500.. .60,100
Source: Employment Estimates for Jebel Ali, Dubai, 1977
In short the development of other facets of the Emirates' economy would be severely distorted if developments of the scale of Jebel All were not isolated from the labour market at large. There would be considerable social problems associated with such an influx of population into Dubai, and the Emirates as a whole. Yet Shaykh Rashid is determined upon industrial expansion of this scale. Enclave development, with the industrial cc- lex and its workforce isolated from the wider economy of Dubai is the only way that industrialisation of this scale can be effected without these harmful side effects.
It is the Oriental companies who are supplying the selfcontained wor=klorce of size and skills able to construct ithe large scale plant and infr-astructure of Jebel All. The Jebel Ali site will continue to be run as an enclave after the completion of construction. It will be operated in the long tem by contracts similar to that issued for its cons ruction mhase.




-38
It will probably never be thought desirable to integrate the
Jebel A" developments into the wider economy of Dubai or the
Emirates -as a whole
Although less advanced at the present, the Ruwais development (Abu Dhabi) will be built and operated on a similar basis.
The Yenbo and Jubail enclaves in Saudi. Arabia are also being
built by Orientals with enclave-type contracts. Saudi Arabian
manpower will not be available to operate these industrial
areas (let alone construct them, which is almost entirely in
the hands of the Orientals), so Yenbo and Jubail will, for
social reasons, continue as enclaves, operated by Far Eastern
labour who will not integrate with the Saudi national populations.
As Oriental companies have proved most capable of operating
on this basis, their continued presence in the Middle East is
assured.
Yet Orientals are not only employed within the Arab world
as enclave labour forces. Companies from south east Asia have tendered successfully and are meeting deadlines on non-enclave
contracts; the provision of infrastructure in Riyadh, for
example, is being effected by Oriental firms, as are major.
hotel and office building contracts elsewhere in Saudi Arabia. 2~M Conclusion
It appears likely that Orientals will be employed in the
capital rich countries by choice instead of Arab labour.
Not only is Oriental labour more cost effective; not only do
oriental companies offer very attractive "enclave packages"
to capital rich countries, which minimise difficulties to
indigenous planners; but the Orientals, by virtue of their




-39
preparedness to live in enclave developments, and return home after contracts are complete, offer overriding social advantages as a labour supply for which knowledge of Arabic is not essential.
It is with the probability of increased substitution of Oriental for Arab labour supplies that the report turns to assessment of the condition of and policy~ options open to the individual labour exporters of the Arab world.




- 40
PART 3. THE LABOUR EXPORTERS COUNT,! REVIEWS AND POLICY
S STATEMENTS
3A The Arab Republic of Egypt
(i) The Number of Egyptians Workinq Abroad
Egypt's role as a supplier of labour in the Arab world
has become a tradition, an accepted part of Near Eastern
economy and society.
Unfortunately, results of the 1976 census so far made
available do not include a breakdown of the 1,425,000 persons reported to be absent at the time of the enumeration(23). The
derivation of this figure is not clear, stemming as it does
from passports issued and Egyptian national border crossings,
which were considered as welL as the census.
Of these 1,400,000 people abroad, government sources
suggest that some 600,000 are gainfully employed (1975/76).
This would give a crude activity ratio of 42 per cent for the
Egyptian expatriate community.
Other estimates of the numbers of economically active
Egyptians abroad vary widely. Choucri suggested that
1,000,000 Egyptian workers were abroad in 1976(24). Other
government figures, released through al Ahram, recorded
(25)
1,390,000 Egyptians working abroad
The present authors, however, believe these estimates to
be too high. A number of about 400,000 expatriate Egyptian
workers in 1975 derives from examination of data sources in the
countries of employment of Egyptian labour(26). The distribution of these expatriates between the various countries in which they are employed is shown in Table 2.8. It is highly




-41
unlikely that the labour markets of these capital rich states have absorbed as many as 1,O0,000 expatriate Egyptian workers.
The advantage of the authors' system of collection of
data on expatriates is that it requires the figures to cross check throughout the matrix represented by Table 2.8. The other figures, based upon Egyptian sources, are not tied in with any other data sources, and so could be subject to considerable error. Indeed, with reference to movements of other nationals, the authors' method of collecting data in the countries of employment has proved accurate. The reliability of the figures presented here is further enhanced by their not being based upon information pertaining to border crossings
which tend to be particularly unreliable.
It is not possible that the difference between the two sets of figures 400,000 to 1,000,000 is accounted for by clandestine migration. Although illegal border crossings are common in the Near East, they are not of the order that would cover such a disparity.
Here it is asserted that, as in the case of the Yemen
(YAR), the larger estimate derives from an initial government estimate, made without full access to international data and
in the face of a rather misleading domestic situation. Once stated, these initial estimates prove remarkably durable; they are often reiterated without regard to advances in the state of knowledge about the topic.




- 42
(ii) The Size and Disposition of the E*Yetian Labour Force In 1975/76, the Egyptian population was approaching 38,000,000, and the workforce amounted to some 12,500,000 persons. This gives a crude participation rate of about 33 per cent, high by regional standards, because of the participation of women (Table 2.4).
The disposition of this labour force is shown in Table
3.1. Over 50 per cent of the labour force is in the agricultural sectorleaving 6,200,000 workers in the remaining sectors of the economy. Of significance to the subsequent analysis of Egypt is that the public sector (including the armed forces) amounts to over 1,500,000 workers, well in excess of employment in the private sector at less than 1,000,000.
Table 3.1. Egypt : Disposition of Workforce, 1975
SSector of. employment .. Number %
Agriculture 6,343,500 50.7
Government 1,700,700 13.6
Public Sector 1,182,700 9.4
Private Sector 928,500 7.4
Armed Forces 342,500 2.7
Workers Abroad 397,500 3.2
Unemployed .. 1,62.6,800 13.0
Total .... 12.,522,200 100.0
Source: (1) Based on Birks and Sinclair,.19.78, Human
CaDital on the ile.: Development anEmigration in t.he Arab Remublic of Egyvpt and the Democratic Republic of the Sudan. International Labour Office, Geneva, World Employment Programme Working Paper WEP, 2-26/WP 27
1978.




Another significant point to which this analysis returns is the existance of over 1,600,000 unemployed in Egypt.
The 397,000 Egyptiants working abroad in 1975 therefore comprised only some 3 per cent of the workforce. This is a much smaller proportion of the workforce than the Yemen (YAR) and Jordan have exported for example, at 27 per cent and 28 per cent respectively (Table 2.9). In view of Egypt's tradition of exporting labour to other countries of the Arab world, and with unemployment prevailing in the urban, nonagricultural sector (some 1,600,000 people were reported as unemployed in 1975, Table 3.1), it is remarkable that more
Egyptians were not working abroad in 1975. It is still more remarkable that the numbers departing to work were not increasing rapidly in 1975.
(iii) Egypt's Limited ReSpOnse to Labour Exporting
The leading question then, is why has Egypt not exported larger numbers of workers? Why, indeed, were there not 600,000 or even 1,000,000 economically active Egyptians abroad in 1975? Moreover, why has there not been a large expansion in the numbers of Egyptians migrating for employment since 1975? In view of the manifest opportunities which have existed in the capital rich states of the Arab world, in
particular since 1975, since when they have been suffering acute shortages of labour, why have not more Egyptians migrated internationally for employment? Why has the incidence of unemployment in Cairo not acted as a stronger "push factor"
in causing migration for employment?




-44
There is another facet to this' apparent paradox. Despite the fact that Egypt has exported only a small proportion of her labour force, it is generally acknowledged that there axe acute shortages of certain types of labour --in particular tradesmen and craftsmen especially in Cairo, but also throughout Egypt. It is unlikely that domstic expansion of the Egyptian economy (which has been slow in real teris 27) or conscription into the arned forces (the number in the army is falling slowly) is bringing these shortages of manpower about. The conventional wisdom asserts that these shortages are due to migration abroad for employment. Yet is it probable that such small scale emigration of labour in terms relative to the total population and workforce could bring about such shortages?
Here an hypothesis is put forward to explain the limited response of the Egyptian labour force to the potential of sending more workers abroad, and to cast light upon the acute impact of relatively limited migration for employment on Egypt's domestic economy. This points to policy options by which the Egyptian government can better exploit the potential to export labour to the capital rich and other states in the Near East
-it is generally acknowledged that Egyptian manpower planners seek to export more labour. Indeed, this presumption is built into Egypt's development plan~2~
Egypt's labour market appears highly compartentalised, with very little occupational mobility. Besides the normal barriers to occupational mobility, the Egyptian labour market is characterised by extraordinary immobility between even




45
relatively similar occupations. 3 xx other labour markets, transfers up to the occupational Ladder appear more coon
than in Egypt.
This lack of occupational r ability between these similar
occupations, especially those of low skill attribute is of
considerable significance: the- slt of this limited
tional mobility is little inte _al re-adjustment within the labour market to' c2en e foc the exports of certain types
of manpower Thus the skil exported from Egypt are not
replaced quickly by nationalA moving into the vacancies
created by their departure dcf. the Jordanian case). For
example, exports of Egypts's,skilled, well-qualified, craftsmen and tradesmen are substantial, but there is little movement of labour up the occupational scale as replacements. Consequently, there are shortages of this type of labour, despite
the small overall proportion of the labour force which has migrated.
The lack of upward occupational mobility to compensate
for exports of labour appears true of all levels of the labour market. Indeed, despite the much-discussed Egyptian rural to urban migration, it is suggested that today there is relatively little transfer of labour from the traditional to the modern sector in the short to medium term. In particular, the construction industry has been demonstrated to be short of all types of labour(29)
Several factors can be put forward in explanation of this lack of occupational mobility. The first concerns lack of movement from the agricultural sector. It is asserted that




-4b
marginal products to labour in agriculture, though perhaps small, are positive. Consequently, today there are not large numbers willing to migrate to towns. The severe discouragements to moving into Egyptian towns include the high social cost of living in overcrowded and underserviced slums.
An important proportion of the labour market is accounted for by those in government service and public employment generally. From the point of view of this analysis the propensity to migrate internationally these public sector employees are essentially immobile occupationally. Although some migrant workers are indeed government secondees (such as teachers and technicians), their number is relatively small. The secure income, with annual increments, that government employment provides,means that a public sector employee maximises long term economic returns by remaining in the post. He or she is therefore neither a potential migrant, nor has occupational mobility within the domestic labour market.
The Egyptian public sector accounts for 75 per cent of non-agricaltural employment. Only some 25 per cent of the labour force (about 3,000,000 persons) are therefore potential migrants for employment, or likely to fill the vacancies left by those who have migrated.
Not only is this group surprisingly small in number, but many are of low educational attainment, frequently illiterate, lacking in employment experience or, often, unemployed. However, only those of this population with work experience or skills are demanded as migrants. Furthezmore, only these same can move easily to higher levels of occupational status.




-47
Their number is particularly limited, because of the
small private sector in. urban Egypt, a consequence of government domination of the economy.
The unemployed and inexperienced, the urban poor, find
it difficult to migrate internationally. These poorly
qualified Egyptians are only in demand internationally if
their marginal cost and productivity compare favourably with
alternative labour supplies. Similarly, these unqualified
groups are slow to move to levels of higher occupational
status.
Institutional constraints to international travel also
militate against these poor Egyptians, in particular, migrating to the capital rich states. The cost of the travel documents, and the time needed to acquire these in Cairo might be an impossible sacrifice to the unqualified poor. Hence, in Cairo are a number of urban poor, caught in a poverty trap : unable to find work at home and too poor to finance their migration abroad.
The low occupational mobility prevailing throughout the labour market accounts for several apparently puzzling facets of the Egyptian response to migration for employment : first, the low absolute number of Egyptians working abroad in view of the available opportunities; secondly, the shortages of labour (even of relatively unskilled labour) contemporaneous with widespread unemployment in the urban sector; and thirdly, why these unemployed do not migrate to capital rich countries in search of employment.




- 48
This analysis shows why the impact of even relatively limited exports of manpower has been far-reaching; internal readjustments to compensate for the exports of particular types of manpower have not been successful in Egypt (of Jordan Section iC). This lies behind the unexpectedly sudden
shortages of craftsmen that have occurred. The failure to replace these selective exports of labour results from the rigidity of the labour market, compounded by the fact that the better quality specialised labourers (the potential replacement groups), have themselves migrated in substantial numbers. Thus the deleterious impact of Egypt's labour exporting is exaggerated by the nature of the labour market.
Moreover, Egypt's potential as a labour exporter is tempered by the inability of the labour market to provide readily libour of the qualities demanded in the capital rich states.
In short, despite the government's intentions, there is unlikely to be a substantial expansion in the numbers of Egyptians migrating to the capital rich states for employment. Egyptians with the skills demanded overseas, who are prepared to migrate, are more limited in number than is commonly envisaged.
It is doubtful that planners in Egypt are wise in
notionally setting many extra departures of migrant workers against anticipated unemployment. At least, this is true of spontaneous departures. If the government desires to export larger numbers of workers, it must take a series of active steps to encourage this. These policies are now examined.




- 49
(iv) Policies to Facilitate International Migration for
Employment from Eqypt
The government action necessary to facilitate increased
migration of Egyptians for employment should have two facets:
First, in view of the fact that, today, larger numbers of
Egyptians are not spontaneously demanded in the capital rich
states of the Arab world, efforts must be made to explore, evaluate and cultivate a market for Egyptian labour abroad.
Secondly, the government must train' 'and make available
for migration larger numbers* off workers of the, attributes
demanded in the Arab world at large, and particularly in the most rapidly growing capital rich states.
Having done this, the institutional constraints to the departure of the migrants for employment must be minimised.
(a) The Evaluation of the Market for. Egvptian Workers overseas Employers in the capital rich states fall into the
following four categories : first, large scale contractors who employ large numbers of unskilled workers, as well as substantial numbers of skilled and qualified employees; secondly, smaller scale industrial enterprises; who tend to utilise mor skilled "technicians" and workers with specific job experience; thirdly, governments, who employ a wide spectrum of medical workers, professionals and teachers, through to unskilled workers,and which have a particularly large demand for clerks and office workers; and, fourthly, private companies in the service sectors.
It is possible to identify, from amongst these groups, the markets for which Egyptian labour is most useful. As




- 50
shown, there are already shortages of Egyptian skilled tradesment. Therefore, expanded exports of labour of large scale contractors can only follow training of larger numbers of these workers at home in Egypt. It is these very craftsmen who are most in demand by contractors.
In the case of these tradesmen, but even more so in the
case of unskilled labour, the Egyptians arxe in direct competition with Asian and Oriental labour supplies. The latter are preferred by many operators in the capital rich states. Employers claim that Egyptians (and to some extent, Arabs as a whole) compare unfavourably to Asians because: the Egyptians demand higher wages, but are not more productive than Asians; Egyptians require better living conditions than do Asians; Egyptians want to bring their families, in contrast to Asians, who are more prepared to come as single men, leaving their families at home; Egyptians tend to haggle over wages and conditions which were previously agreed, in contrast to the Asians, who dispute their agreements less; and it is also generally felt that Egyptians are more apt to invoke labour laws against their employers than are the Asians.
Thus, at an unskilled level, employers see overt advantages in employing Asians rather than Egyptians. Before Egyptian. labour exports can be expanded significantly, this problem must be overcome, both by increases in the productivity of Egyptian labour (to cover its higher cost), and by public relations work, to raise the status of the Egyptians in the eyes of these large scale employers.
An increase in the employment of Egyptians would in fact mean a turn-about of market trends. The factors listed in




= -5.section 2 have resulted in greatly increased employment of
Asians, often with the result that both new and existing jobs
have been lost to Egyptians. Many companies have built up
Asian labour forces with which they have been successful, and
so are disinclined to change.
Overriding these considerations in many respects is the
question of ready availability of labour. It has been shown
how, during the period of most rapid economic expansion in the Arab world's capital rich states, it was Asians' ready availability. which ensured their deep penetration, of the Near East
labour market. It remains true that, for individual employers, availability is crucial. Agencies supplying Asian labour provide tradeszmn typically within a few days of receiving the request. In contrast, it usually takes several months after a contractor has made a request for Egyptians to reach their place of employment.
At clerical positions and senior managerial levels in these large contracting companies, Egyptians do find some emnployment,particularly when a facility in Arabic is an essential qualification for the post. Typically however, it is Levan tine Arabs who hold these positions rather than Egyptians. These Jordanians, Syrians and Lebanese tend to be retained by the firm~s, and move from country to country with their operations
-there is little scope for. Egyptians here.
There are two other factors militating against increases
in opportunities with these large contracting firms. The first is the approac-hing downturn in the construction phases of the development of the capital rich states, which means that there will be an overall reduction in the number of unskilled migrant




-52
construction workers in the Arab world. It is therefore not a good moment for Egyptians to be trying to expand their share of this market.
Secondly, the available large scale construction tenders are increasingly going to south east Asian companies who effect the projects on an enclave basis, providing the whole labour force without integrating their workers into the indigenous capital rich states at all. This automatically excludes the Egyptians (and other Arab nationals) from such projects.
Many of these points also apply to employment in the smaller industrial enterprises. The types of labour they require are not readily available in Egypt. Those with the requisite skills are slow in migrating, and often of unrealiable quality. Asians tend to be preferred over Egyptians.
It is in government employment and in positions with service sector companies that Egyptian labour, with its language facility, administrative and clerical skills has greatest advantages over alternative sources of labour. In the supply of medical personnel and teachers to the Arab world, for- example, Egypt has been markedly successful, though not in a monopoly position. There is no doubt that Egypt 4ill continue to export manpower to these government and service sectors.
The demand for manpower which falls within these categories will doubtless increase. It will not grow razi-dly, however.
These govez-.nment and service sector posts, because of
their desirability and prestige, are those to which nationals




- 53
of capital rich states aspire. Therefore, as nationals of capital rich states pass out of their education systems of
their respective nations, they will tend to take extra posts
as they become available. In, some cases tey. will actually displace Egyptian labour as posts are "naturalised". The lower manual echelons of the public sector workforce might not be subject to this process to the same extent as are the movie
senior classes of government employee.
Only in the states with very small national populations, such as Qatar, will the opportunities for Egyptian office workers and professionals grow particularly rapidly. Much of growth in public sector employment will be in technically qualified labour and in this Asians, once again, will feature largely.
In sum, Egyptian planners face a series of market problems in attempting to export extra labour.
- The market for Arab migrant labourers in the capital rich
states is not expanding rapidly. It is therefore an
especially bad time to be attempting to increase Egyptian
penetration of the market.
- The demand for Arab migrant labour is falling most
quickly in respect of unskilled workers, those which the
Egyptian planners are most interested in having migrate
for employment.
- It is in these less qualified and skilled categories of
labour where the Egyptians are competing most directly
with south east Asian labour. Egyptian labour of this
type is particularly disadvantaged because of the lack of
Egyptian large scale enterprises able to effect major
"enclave projects" in the capital rich states. It is on these large projects that south east Asian companies have
proved particularly attractive to the Arab countries of
employment.
Egypt is not a base from which many large companies with substantial ventures in the capital rich states operate. The




- 54
private sector's spontaneous tendency to export labour to effect, for example, major construction contracts is therefore lost.
It is difficult to create such "multi-national" companies, either in their pure private sector form, or as quasi-government mixed sector operations. Apart from the need to collect the international expertise that heads such large concerns, they require large amounts of capital and tend to be spawned only by relatively developed economies. Indeed, for major contracts, the exports of labour are preceded or accompanied by large scale exports of capital. In the short to medium term, it is difficult to see how Egypt will be able to operate overseas in this manner.
Exports of labour will therefore have to be achieved without the benefits of Egyptian contractors' winning tenders for large scale projects.
Although there is a continuing and assured market for
Egyptian professionals, administrators nd teachers, this is not likely to expand rapidly. The most sustained increase in demand in the capital rich states is for tradesmen, craftsmen and technically qualified workers. Yet technicians have not been produced (relative to other products of the Egyptian education system) in very large numbers, and a shortage of tradesmen is already extant in Cairo.
Egypt does not, therefore, appear well placed to exploit the most promising aspects of the international market for migrant labour in the Arab world.




(b) Government Action to Increase Migration for Employment In the immediate future, it would be advantageous for the government to ease the institutional constraints to migration for employment. This would enable some of the poor, for whom migration is presently too expensive 6r difficult, to leave in the event of their finding employment abroad. The impact that this would have on migrant flows must not be exaggerated, however. Arab workers of this quality are not demanded in large numbers today. Where they are in demand, other nations (Yemen, Sudan) are better placed to supply this manpower than is Egypt.
The government must attempt to create a stock of labour of the qualities demanded in the countries of employment, and then facilitate their migration. A certain body of labour of this nature already exists, but only few migrate, because these workers are locked into the Egyptian public sector. The government could facilitate their movement by an increased scale of secondment, or by offering bonuses, or continued increments to cover service overseas, and by making their reinstatement in public service easy on the migrants' return. At first inspection, in view of the widely-known under-employment within Egyptian public service (which has stemmed from.the policy of government employment of graduates), it might be thought that such action would release a large number of potential migrants. In fact, there are thought to be only relatively few suitably qualified members of the Egyptian public sector who would be released for international migration. Most of the under-employed individuals in the Egyptian




-5b
public sector are administrators rather than technicians, and
so are not demanded overseas in large numbers.
If export of increased numbers of workers from Egypt is
to be successful, then planners mst turn their efforts to
improving the stock of human capital from which these exports
are made.
After careful assessment of the sectors of the internaticnal labour market to which Egyptians might make an enlarged contribution have been realistically identified, then potential migrants must be trained specifically for these positions abroad.
At the present, the Egyptian education system is not
directed towards the production of school leavers or graduates with the technical and trade qualifications demanded abroad. it would be too long .tern a process to attempt to redirect the system so that it produced less arts and social science graduates with increased numbers of more suitably qualified leavers.
Therefore, ministries and government agencies should
instigate short-tern training courses to produce numbers of workers of a type desired in the capital rich states, who are of known quality, and who can be supplied in known numbers to meet predicted demand. Perhaps some remittances might be utilised to pay for these training schemes (for details of utilisation of remittances, see Yemen, section 3F ) The training of such craftsmen and low grade technicians would have the incidental effect of decreasing some of the acute shortages of labour of this type in Cairo.




- 57
To some extent, once potential migrants of the desired characteristics have been produced, the market can be relied upon to find them places of employment; that is to say they can be allowed to migrate spontaneously.
This process alone is unsatisfactory though, and
Egyptians should advertise the availability of thesenew trainees in the capital rich states. Moreover, the Egyptian Government should attempt to contract to supply labour of the type and numbers being trained, either to the private sector operators in, or the governments of the capital rich states.
Attempts to supply Egyptian labour through formal agreements have previously not been considered a success by the labour importer (30).and have made little impact upon flows of labour from Egypt. It is the specific links between the postulated agreements and the training of suitable labour of guaranteed quality which will give these new agreements a different tenor. Particular importance attaches to these agreements in view of the fact that no large scale Egyptian contractors operate in the capital rich states.
(v) Conclusion
In conclusion, it is possible for Egypt to enlarge her role as an exporter but it will take effort, investment and some marketing flair. Greatly increased numbers of Egyptians will not migrate under the old system where individuals migrate spontaneously.
Indeed, in view of the contraction in the level of construction phases of the development plans of the oil exporting




- 58
states as their economic development moves to subsequent
phases, it is likely that there will be a net return of Egyptians as the unskilled and semi-skilled construction
workers return home, having lost their jobs abroad.
It might therefore be considered even more essential to
train rapidly and export tradesmen and technicians (albethey
of low quality) in order to make up for the return of the
unskilled migrants to Egypt.
In only one facet of the spontaneous exporting of
unskilled labour does there appear to be potential for
significant expansion. This is in the supply of replacement
migrants to other countries supplying labour to the capital rich oil exporters, for example Jordan. The potential and
nature of this process are described in detail in the
Jordanian section of this report. (Section 3C). 3B The Democratic Renublic of the Sudan
(i) Introduction
The Sudan, like so many other labour exporters was, at
first, enthusiastic about the new wider role that its labour
force had assumed. Apart from the normal economic benefits resulting initially from labour exporting, a new political
stance, more central within the Arab world, which exporting
labour was thought to give Sudan, was highly valued(31). The Sudan's enthusiasm for the exports of labour was enhhnced by
the government's preoccupation with unemployment in the later
part of the 196s 32). Here, it seemed,was a chance both to
export unemployment and gain in foreign exchange. These




- 59
exports of labour, however, soon grew to an extent (Tables
2.7 and 2.8) that the Government of Sudan has recently become
concerned at what amounts to the outmigration of a significant
proportion of the workforce.
(1i) The Rapid Expansion in' SUdaneSe Labour Exports
Sudanese labour migration has changed particularly.
rapidly; the increased number of workers leaving Sudan exhibits
well the expansion in international labour movement in the
Arab world after the 1973 oil price rises. So precipitate was
this increase that, despite concern over the exports of
Sudanese labour, it is difficult to quantify or even to discuss in qualitative terms.
In 1969, only about 900 workers left the Sudan, and most were "cooks and domestics", an occupation widely associated with Sudanese abroad. By 1971, labour exports from the Sudan had already increased significantly, as indicated by the legal departure of some 8,500 workersitogether with an unknown number
of clandestine departures. Between 1971/72 and 1975/76, there was a fortyfold increase in Department of Labour (Khartoum) permissions granted to facilitate the departure overseas of those in employment in the Sudan. By 1975, work permits endorsed to enable international travel numbered 12,500, in 1971 only 390 of these had been issued.
By 1975 the authors estimate that about 46,000 Sudanese were working abroad in the region (Table 2.8). The pattern of destinations of Sudanese workers abroad derives from utilisation of Department of Labour figures in Khartoum, together with visa and census data available in countries of




-60
employment., In 1975, Saudi Arabia was hosting between 30,000 to 40,000 expatriate Sudanese workers. Of these, about 25,000 were legally employed. Since then, the number of Sudanese in the Kingdom has risen further. As many as.70 per cent of (.33)
Sudanese in Saudi Arabia in 19 77/78 could be employed illegally As many as 83,000 Sudanese are employed in the Kingdom in 1978.
Far larger totals of Sudanese in Saudi Arabia have been
put forward. However, there is no reasonable way of justifying "137,000 Sudanese teachers, agricultural technicians, builders,
(34)
drivers, craftsmen and office s taff" working in S audi Arabia Such a figure would mean that the Sudanese would dominate the Saudi labour market in a way that they patently do not. Mvoreover, in view of what is noted below about the size of the Sudanese domestic labour market, it is unlikely whether the Sudan's economy could sustain exports of labour of these dimensions.
Similar controversy surrounds the numbers of Sudanese in Libya. Despite the cool relations existing between Libya and Sudan, Sudanese workers continue to migrate there. Official figures give a total of 5,000 Sudanese legally employed in 1975 Realistic estimates for the numbers of Sudanese
working in Libya in 1975 are of the order of 9,000, since when the number has risen significantly.
Other countries of employment of Sudanese labour receive far fewer migrants. It is unlikely that the number of 1,550
(36)
Sudanese recorded in Kuwait in 1975 has risen significantly Distance and intervening opportunities in Saudi Arabia keep numbers of- Sudanese in the other Gulf states relatively low-




there are probably (in 197b) about 1,500 economically active Sudanese in the United Arab Emirates, certainly less than the 20,000 that has been suggested(37J. (iii) Migration for Employment an& the Sudanese E'concmy The authors, using the Sudanese census results made
available in 1977, estimate that the 1975 population of the Sudan was 14,100,000 (Table 2.3). The workforce is estimated to have been 3,700,000 persons at this time. However, this labour force is largely rural, and follows agricultural pursuits. The modern sector workforce is unlikely to exceed
8 per cent of the total, amounting to some 300,000 workers(38)
It appears, however, that most of the migrant labourers exported from the Sudan have left positions in the modern sector. Therefore although the total expatriate workforce of about 46,000 amounts to only one per cent of the total domestic labour force, the migrants for employment comprise 15 per cent of the modern sector labour force. In fact, not all the migrants were drawn from the modern sector, but certainly many were. Equally significantly, those drawn from the traditional
sector workforce were generally the most suitable in terms of experience and skill or qualification to be the replacements who would otherwise have been brought into the modern sector. Thns,selictite labour exports from the traditional sector serve to compound the impact of departures of labour from the modern sector.
The small size of the Sudanese modern sector, combined with the selectivity of the labour exports, has brought about some significant skill shortages in the Sudan. For example,




- 62
estimates for the"brain drain" from the University rise to over 20 per cent, and it has been demonstrated that this could
(39)
rise to over 50 per cent3. There are already losses of
up to 50 per cent for certain specific fields.
There have also been major losses of medical personnel, perhaps amounting to 70 per cent of the total number of graduates. Some 35 per cent of the graduates of the School of Hygiene are also abroad.
The effect has also been profound in Government 25 per
cent of the 100 qualified statisticians have been lost overseas. The emigration of, for example, stenographers, typists, punch card operators, bookkeepers, for example, has become an obstacle to the efficient working of government.
(iv) Economic Development aidd the Sudanese Manpower Shortage : Implications for Policy
The Sudanese responded positively to the drawing of labour by Saudi Arabia fr= the domestic labour market. However, it soon became apparent that the Sudan could be heading for a manpower shortage of substantial dimensions. Attention was drawn
to this by Messrs. Kidd and Thurston in 1977(40)
Kidd and Thurston took the Sudan's own predictions of manpower shortfalls (as shown in Tables 3.2 and 3.3), which do not include any allowance for exports of labour, and added to these
estimates of further labour deficits caused by migration for employment (Table 3.4). Tables 3.2 and 3.3 show a shortfall of 9 per cent of professionals and of 40 per cent of technicians as predicted by Sudanese planners. But, as shown by Table 3.4 Kidd and Thurston estimated a loss of some 7,000 professionals




-b3.
Table 3.2. Sudan :Demand for and Supply of Professionals, Period of Six Year Plan 1977/78 1982-83
Profession Graduates Graduates Total
Demand Surplus/
of from Local from Supply 6 Years Deficit
Speciality Sources Overseas 6 years
Agriculture 1,251 1,409 2,660 5,000 2,340
Veterinary
Science 505 495 1,000 2,200 1,200
Medicine 1,407 1,333 2,740 2,405 + 335
Dentistry 105 105 105
Pharmacy 204 156 360 .500 140
Engineers 1,023 1,217 2,240 4,400 2,160
Basic Sciences 2,000 2,900 900
Law 1,730 .495 + 1,235
Accounting and
Finance 3,000 4,700 1,700
Economics and
Social
Sciences 2,690 1,500 + 1,190
Teachers of
Higher Secondary Schools 1,640 1,700 60
Others 3,585 200 + 3,385
Total 4,495 .4,610 23,750 26105, 2,355
Source: Manpower in Sudan's Six Year Plan for Economic and Social Development, 1977/78 1982/83. From Higher
Grants Commission, Undated, cited in Kidd and
Thurston (40).
Table 3.3. Sudan : Demand for and Supply of Technicians, Period of Six Year Plan, 1977/78 1982/83
Speciality Demand Supply Surplus/Deficit
Agriculture and Forestry 5,000 2,150 2,850
Veterinary Sciences 2,000 580 1,420
Medical Assistants 2,400 1,370 1,030
Mechanics and Electricity 3,500 580 2,920
Engineering and Architecture 2,200 550 1,650
Surveying and Transport 3,450 3,330 120
Chemical Engineering 2,100 .1,600
Accounting, Finance & Banking 1,600 1,600
Librarians 500 500
Teachers (General, Secondary) 900 900
Others 300 530 + 230
Total 23,950 13,690 + 10,260
Source: As Table 3.2




Table 3.4. Kidd and Thurston's Estimates of "Minimum numbers of Sudanese Working Abroad 1976
Professionals 2 Technical 3. Other4/
Country Total1l/
Low High Low High Low High
Saudi Arabia 20,000 2,570 4,580 5,140 9,160 6,260 12,290
Libya 8,000 1,027 1,832 2,054 3,664 2,504 6,260
Kuwait 2,000 257 458 514 916: 626 771
United Arab Emirates 2,000 257 458 514 916 262 771
Total 32,000 4,111 7,328 8,222 14,656. 10.,016 20,092
Sources- 1. Ministry of Labour as reported in Sudanow, December, 1976, p. 7. Because of political conditions, it appears probable that migration to Libya will
cease for the indefinite future.
2. All Abdel Gadir Ali. A Note on the Brain Drain in the Sudan. Appendix
3. Assuming two technical for each professional.
4. By subtraction.
See Kidd and Thurston 1977, p. 7.
' .1




and perhaps as many as 14,000 technicians as migrants for employment, the absence of whom is not taken into account by the plan. If it is presumed that exports of labour continue to increase over the period of the plan, then by 1982/83 the Sudan could expect a critical shortage of qualified manpower. In fact, if Kidd and Thurston are correct, then the gross. demand for technical and professional labour is likely to outstrip the supply by some 25,000. They go on to write, "A shortage in the order of magnitude of 25,000 should remove all cause for complacency. It should give rise to an immediate reassessment not only of the projected manpower situation over the period of the six year plan and thereafter, but also of the economy to absorb capital and of all assumptions resting on the availability of professional and technical manpower" (41) They go on to describe what they call a "positive strategy" of expanded output of the desired personnel. They assert that modest investment in the educational system of the Sudan could produce the numbers of qualified persons, not only to make up the shortfall they identify, but also to allow for a surplus of manpower over domestic requirements, which could then be exported. They thus see the desirability of a complementary relationship between the Sudan and the importers of her skilled and trained manpower.
This, at first inspection1 seems to be the most suitable policy upon which the Sudan should embark. It is a positive strategy which appears to enable the Sudan to benefit from the opportunities to export skills and yet to produce enough skills to facilitate domestic development at a pace not tempered by exports of labour.




" 66
If the countries of employment of migrant labour could be persuaded to invest in such a training programme of Sudanese labour, then the policy might appear altogether desirable.
We do not disagree with the aims of consistently reassessing the plan in the light of recent developments in the manpower aspects of any other facet of the economy. Nor do we dispute that an expanded output of professionals and technically qualified manpower is desirable in the Sudan. But tne present authors do have serious doubts about action to increase the supply of trained labour on a scale directed towards making up a shortfall in manpower of a magnitude identified by Kidd and Thurs ton.
This is for three main reasons. First, it is not certain that the domestic demand for labour will indeed rise to the scale of the plan, let alone beyond it, as postulated by Kidd and Thurston. The plan is indeed an admirable tool for demonstrating aims and aspirations towards which the economy should be directed. However, the goals of past plans have only been met in part in the past, and it is unlikely that the targets of the present plan will be met in full; it is not felt, therefore, that the requirements of labour stipulated in the plan will become an effective demand. It is particularly unlikely that they will be exceeded.
Secondly, it is considered unwise for the Sudan to base manpower and educational requirements upon presumptions of a continuing international demand for qualified Sudanese manpower in even the medium term. The labour market in the Near




East is volatile. Sudanese labour might well be demanded much
less in the near future. In view of the commitment that an
expansion in educational facilities represents, and of the
fact that over production of educated. manpower a decade or so
in the future is likely to have dire political consequences,
quite apart from being wasteful of resources, it would not be
circumspect for the Sudanf to planhead for'a' continuing
demand for qualified Sudanese manpower for more than in the
short to medium term. To. ignore this would increase problems of reabsorbtion of return migrants :in the future.
Kidd and Thurston indicate some of these uncertainties, but they are stressed here as crucially important.
Thirdly, Kidd and Thurston's analysis ignores the possibility of the Sudan's importing labour. The possibilities of this are not at all remote; indeed, it is probable that some replacement movements are already taking place. It is possible that replacement movements underlie the increasing migration of Egyptians into the Sudan. Egyptians who wish to migrate, but who have been unable to secure positions in the capital rich states are migrating to the other major labour supplying countries such as Jordan and the Sudan. In particular, the movement of Egyptian professionals into the Sudan comprises an element of replacement migration.
An alternative source of replacement labour for the Sudan is the west. The traditional movements of population into the Sudan from the west should be considered important in this context. The populations of Chad, Cameroon and West Africa have in the past responded in large numbers to opportunities




-68
in the Sudan 142). Although their traditional reaction is likely to be rather tempered by the new wealth and consequent opportunities in Nigeria, it would be surprising if substantial numbers were not attracted to the Sudan in response to high wages 'and a labour shortage. In short, the market forces with exports
causing an outflow of labour/from the Sudan will bring about imports of labour should the domestic. labour shortages become critical. One-should not envisage being able to equate simply any imports of labour in either empirical or qualitative termis The complex readjus tents of the domstic Sudanese labour market precludes such simple assessments. Although replacement migrants generate social costs to be borne by the host nation ($ect.23C) and although their productivity is generally lower than that of the migrants whom they are replacing, such a replacement movement serves to ameliorate the overall shortages of labour resulting from the Sudan' s becoming a labour exporter of significance.
Therefore, it seems that as a result of these factors,
the real shortfall of skilled and qualified labour will be far smaller than the 25 ,000 suggested by Kidd and Thurs ton. This does not mean to say that manpower shortages are not likely to become a constraint upon development; they patently are, but not to the degree that has been implied. Expanded educational output is indeed desirable, not to say essential, but not on the scale that Kidd and Thurston advocate. In view of the high financial and opportunity cost of investment in education in the Sudan today, such a policy is neither economically nor (in view of the likelihood of large scale return of migrant workers) politically desirable.




In conclusion, it is suggested that the Sudan reassesses domestic manpower projections as realistically as possible, and in the light of these, presumably more conservative, figures looks again at the impact that continued exports of skilled manpower in particular will have upon realistic goals of domestic development. It is out of such an urgent but calculated appraisal that a strategy of limited development, of training facilities, which balances the short term problems and costs against the long term risks will derive.
(v) The Spontaneous Labour Market Response' A Net Benefit Although research is demonstrating that the disadvantages of a country's being an international supplier of labour tend to outweigh the advantages, this is perhaps less so in the Sudan than in some other countries of the Near East.
The Sudan has indeed, in contrast to, for example, Egypt, been able to export a good deal of unemployment. Moreover, the Sudanese labour market appears to be responding in a relatively flexible manner, so that modern sector work experience and training is being acquired by .ar larger numbers that would have been the case if the Sudanese were not migrating internationally.
This is a present day tax upon progress and efficiency, but in the Sudan's case, the exports and further training of labour abroad might serve, to benefit the country's development in the medium term. On their return after spells of work overseas, erstwhile migrants might represent a considerably greatLer asset to their country in development terms than if they had remained at home. Their extra experience and




- "0
modified aspirations might be harnessed to further the Sudan's progress. This is particularly the case with some of the more qualified migrants; with the unskilled there is greater probability that their raised aspirations will lead to frustration.
(vi) Sudanese Efforts to Utilise Remittances Although the advantages and deleterious aspects of
remittances are considered in detail in the section on the Yemen (Section 3F),it is instructive to look at the Sudanese efforts to harness remittances. The Sudan is an example, par
of
excellence,/a country whose development has been held back by continuing balance of payments problems and a critical shortage of foreign exchange and hard currencies. The Sudanese therefore saw the rising tide of remittances as a means of ameliorating one of the most intractable problems stunting their economic progress.
Remittances have risen still faster than numbers of workers abroad. The Bank of the Sudan calculated that remittances were less than $1 million in 1975/76, but had risen to $10 million for the year 1976/77. The total for the coming year is predicted to reach $300 million. For a country with perpetual balance of payments problems, this could be seen as a very healthy trend, a valuable contribution to the economy.
The Government of the Sudan has instigated a number of schemes to encourage the remittance of hard currencies by expatriates through the banks. These enable official monitoring of the flow of funds and gives the government access to




71
them. The first is known as the "Land for Emigrants Scheme".
It provides a quick and easy exchange of foreign earned hard
currency for first and second class housing units in Khartoum.
As well as drawing in foreign currency to the economy, it has
also been pointed out that the scheme provides a. useful psychological link with their homeland for Sudanese working abroad. Whilst it does indeed serve to encourage remittances of hard currency, the scheme also acknowledges implicitly one of the important "push factors" behind the migration of skilled labour the shortage and cost of urban housing in the Sudan. The authors assert, however, that a major factor behind the price increases in housing (which in certain parts of Khartoum are twenty times the prices of the 1960s) is the increase in remittances. Thus remittances have served to aggravate one of the" very problems which lay behind outmigration of labour in the first instance.
Another significant Sudanese government scheme is the "Nil Value :Customs Policy". A Sudanese national can obtain customs relief on imports equivalent to the value of a foreign
currency account held in the Sudan Bank. This is- provided the currency is remitted from outside, and remains in the account
six months. After the customs relief has been gained, then up to 75 per cent of the hard currency account can be retransferred out. Whilst in the account, funds receive interest as
a further incentive.
Thus the Sudanese government sacrifices customs revenue, but eases the balance of payments by encouraging purchases of
imported goods with hard currency earned outside the Sudan.




- 7.2At the same time, the government keeps back, in hard currency,
25 per cent of the value of the customs free purchases to be
exchanged at official market rates within the Sudan. A major
incidental benefit is the discouragement of black market
currency dealing. Moreover,whilst the monies are vested in
the Bank of Sudan, the government can use the hard currency to
expand normal banking practices.
Whilst these policies have not altered fundamentally the
drawbacks associated with a state's receipt of remittances, the
Sudan is making very effective short term use of the flow of funds. In view of the short ter variations in remittances,
such schemes are the most suitable to implement. Other
countries could learn much from the Sudan's initiative. It is
suggested that theymonitor the Sudanese schemes carefully. 3C The Hashemite Kingdom of Jordan
(i) Introduction
Out of an estimated population of 2.6 million persons in
1975, some 532,800 were economically active, a crude participation rate of 20.4. Table 3.5 shows that about a quarter of
the Jordanian population lived and worked abroad in 1975.
The modern sector non-farm civilian workforce, from where
most Jordanian migrant workers originate, comprised 324,000 persons in 1975 (Table 3.6). Expressed as a proportion of
this pool of labour, Jordanian migrant workers constituted 46
per cent. That labour shortages should have arisen as a
result of Jordanians working abroad is therefore hardly surprising.




- 73
Table 3.5. Jordan : Workforce and Population, 1975
Workforce Population Crude Parti.cipation.Rate
Inside Jordan (East Bank)
382,800 1,953,061 19.6
(71.8%) (74.6%)
Outside Jordan
150,000 663,700 22.6
(28.2%) (25.4%)
All Jordanians
532,800 2,616,700 20.4
(100.0,%) (100.0%) ........... .... ..
Source: Authors estimates based on : Country Case Study :
The Hashemite Kingdom of Jordan, (Durham, November
1978.
Table 3.6. Jordan : Disposition of Workforce, 1975
Sector. of Employment Number %
Agriculture 73,000 13.6
Modern Sector Civilian 174,000 32.7
Civil Defence and Military 127,800. 24.0 Unemployed 8,000 1.5
Migrant workers. abroad ... 150.,000 28.2 GRAND TOTAL .... ........... 532,800- 100.0
Source: MEED., 1976 Special Report, Jordan, p. 2 and authors'
estimates.




The large majority of Jordanians working abroad are
employed in Saudi Arabia (66 per cent) and a further 18 per cent in Kuwait. The remainder work in other capital rich states of the Middle East.
(ii) Occupational Mobility : Imp locations for Policy in Jordan
One of the disadvantages to capital poor states of sending large numbers of workers abroad is that their workforces may be depleted to the point where skill shortages constrain economic development. The likelihood of this latter event is diminished by a high degree of occupational mobility in the domestic labour market (the capacity of the market to replace those more skilled with those less skilled at any given level). The Egyptian labour market appears occupationally rigid, there being relatively little move-yent between jobs: a small proportion of the workforce departing leaves acute skills shortages which take a relatively long period to be made up by occupational transfers. In Jordan though the high degree of occupational mobility has diminished this deleterious impact of international migration.
Thereforeby enhancing domestic occupational mobility, the deleterious impact of migration can be reduced. Thus governments should be prepared to promote o.xe. quickly in
times of rapid out migration than under normal situations. In the private sector, training schemes aimed to enable an individual at one skill level to move to a higher level where job opportunities exist should be encouraged. The modular scheme of training would be highly relevant to this objective.




- 75
(iii) The Brain Drain
(a) The Scale of Emigration of the Beter Educated
Within the Arab Near East Jordanians are possibly the
best educated nationals. Certainly they are also highly gecgrapfically mobile ,as a- coirunity and tnerefor,-.:given the selective nature of migration which first extracts from a market the most able, Jordan has suffered from a "brain drain".
The origins of Jordan's modern educational system reach
back to before the First World War. On the East BanJR, education was run originally by the Turks, and then by the administration of TransJordan. By 1930, 65 schools existed on the East Bank with two secondary schools and one vocational training school. On the West Bank there were, even in 1914, 500 primary schools,
and by 1948, 250 intermediate and 20 secondary schools run by the British mandate administration. The investments made in human capital throughout the twentieth century have raised the Jordanian people of today to a position of an educational elite in the region. Throughout the Xear East, Jordanians work as teachers, doctors, statisticians, bankers and technocrats.
The success of individuals whose skills are in considerable demand outside Jordan is described within Jordan as the "brain drain" problem. It is difficult to evaluate comprehensively the cost or benefit to Jordan of the "brain drain", but superficially it does seem that the country invests resources over
many years to train its people only to lose the same to more wealthy neighbours just as individuals reach their prime working age,




- 76
Table 3.7 shows the educational qualifications of the
Jordanians recorded as abroad in the 1975 MPHS and of the domestic Jordanian population enumerated in the 1976 MPHS Clearly the community abroad is very much better educated
than those left at home. Table 3.7 confirms that international migration has selected from the Jordanian population those most educated or skilled before those without qualifications or skills.
Table 3.7. Jordan: The Distribution of Educational Level of
(a) those recorded as abroad in 1975 M.P.H.S., and
(b) the sample (total) of the 1976 M.P.H.S.
hese Abroad in Sample Population2 M.P.E.S. 1975 (% M.P.E.S. 1976 (%) Less than elementary 8.4 61.4
Less than preparatory 15.2 22.4
Less than secondary 7.2 7.8
With secondary certificate 55.9 5.1
Post secondary diploma 3.8 i.O
Degree . 9.7 2.3
Total ........... 100.0. 100.0
Note: (1) Relates to sub-sample of 3,436 persons drawn
from total of 17,373.
(2) Sample covered 58,183 persons
Source: (1) Department of Statistics, The Multipurpose Household Survey (Jordanians Abroad) 1975, Hashemite
Kingdom of Jordan.
(2) Department of Statistics, The Multipurpose Household Survey 1976, Hashemite Kingdom of Jordan.
However, against this should be set three countervailing
arguments. The first is that unemployment has been a long term problem for Jordan, which probably has only temporarily diminished. The University of Irbid will create a growing volume of graduates, and it is unlikely that jobs will be available for them all in Jordan.




" 77
Secondly, much of all Jordanian educational expenditure is paid for privately. More than any other country in the Near East Jordanians travel abroad to universities in Europe and America, paying their own costs. Moreover, they often avail themselves of free education in countries such as Kuwait, the U.A.E., Qatar and Saudi Arabia, often at university level. Thus Jordan's highly qualified manpower has often been produced without government support.
Thirdly, to be set against costs incurred by the brain drain are the continuing substantial sums Jordan receives in aid from Arab countries. To some extent these must be seen as palliatives to the economic loss Jordan suffers from the brain drain.
(b) Policy Implications of the Brain Drain A brain drain of Jordanians will continue, irrespective
of government wishes. Moreover, the government cannot compete with oil rich states in terms of wages. However, Jordan can define the critical occupations wherein she lacks manpower and provide monetary and non-monetary incentives to induce return or residence for people in these professions. This the government is already doing. As soon as the market appears to change from labour shortage to surplus, she should terminate these arrangements.
(iv) Agriculture and Migration for Employment : Replacements
Agricultural output has fluctuated considerably in the
past five years, as Table 3.8 shows. Generally the explanation offered has been varied rainfall. However, the present




-78
authors would suggest that agricultural production is closely linked to a variety of other factors, not least a productive workforce. It is probab.Le that labour has left rural areas in order to work in more rentxz rative urban areas or even abroad, and that output has been lost thereby. The implications; for the economy of a decaying agricultural sector are considerable. It is likely that international migration of workers is a contributory factor to declining agricultural output, and this is an area whicfi would justify more research than is possible on these pages. The number of Egyptian labourers working on the land in Jordan is an indication that the departure of Jordanian farm workers for the towns and abroad has developed to an extent sufficient to affect agricultural output.
Table 3.8. Jordan : Agricultural Production in Jordan, 1972196(COO's tons)
Item 1972 1973 1974 1975 1976
Field Crops 178.8 66.7 334.1 74.1 100.7
Vegetables 223.0 124.6 205.8 262.3 201.8
Fruits IS32.3 1104.0 -156.7 91.7 183.4
Source: Central Bank of Jordan, Monthly Statistical Bulletin
Vol. 13., No. 9 Table 43.
The government should aim to maintain the stock of capital
contained in the agricultural sector and to hold output constant in the short term.. Given the absence of Jordanian agricultural workers, replacement migrants from Egypt, Syria, and Pakistan should be permitted. However, the basis on which these groups work in Jordan should be strictly temporary. Their duration




o residence should be determined by the moment when Jordanian agricultural workers return from abroad. The government must ensure that a temporary dependance on replacement migrants does not lead to a permanent one, associated with large numbers of unemployed Jordanian farm workers in towns, as it would probably be.
(v) Remittances : A Predicted Decline The remittances which Jordanians working abroad send to Jordan recorded by the Central Bank have risen rapidly since 1973, and particularly since 1974.
The growth in the volume of workers remittances is many times greater than the growth in the number of Jordanians abroad. Remittances rose for three reasons. First, the number of Jordanians working abroad in the oil rich states increased considerably, perhaps doubling between 1970 and 1975. Secondly, a high proportion of the new migrant workers were unskilled or semi-skilled manual workers. These, unlike their more educated predecessors, travelled and lived without their families, and remitted or saved a higher proportion of their earnings. The residence of the new wave of migrant workers abroad is likely to have been only temporary, lasting one or two years, and this group consists largely of "target" migrants, who aim to save a defined sum and then return home. Moreover, these migrants probably worked in the construction sector. Indeed one estimate was that "40 per cent of Jordanian migrant workers are in the construction sector (44) If so, then they will return home as the construction boom (of Saudi Arabia in particular) dies down. Thirdly, remittances rose because wage rates in the peninsula rose, a higher remittable surplus accuring to the migrants.




sy this reckoning remittances will fall because of three factors: first, the return of these "short term" migrants, who despite their low skill level, have earned very high wages and remit large proportions of what they earn. Therefore, their return will have a very considerable impact on the level
of remittances. SecondLy, the wage rates of skilled and unskilled manual workers are falling in the peninsula, and if the level of inflation common to most peninsula states is taken into account, real wages are falling quite rapidly. Thirdly, those Jordanians living abroad with their families, the more highly skilled and educated group, will continue to settlee. Family size will increase, sex ratios will fall, dependancy ratios will increase. The remittances of this group will decline as family commitments abroad increase. They will decline for another reason. As time passes, so the links between Jordanian communities abroad and Jordan are diminishing. Almost one half of all Jordanians and Palestinians in Kuwait were born there. Many. of these have never left Kuwait.
These, the longer term migrants, are better described as "emigrants", since in all practical senses they have left Jordan permanently. Even if migrants settled abroad wished to return to Jordan they would find it difficult to maintain the present standard of living. It would be impossible for example to find accommodation comparable to their present housing, or even- to that which they enjoyed in Jordan before migrating ten or fifteen years ago.
For these three reasons, the return of the short term/
high remittance group, falling real wage rates in the peninsula




-81
and the decline in remittances of the more permanent migrants, the overall level of remittances received in Jordan will fall in the near future, and very dramatically.
This decline in remittances will have a considerable
impact particularly as their significance to the economy grew rapidly between 1973 and 1976, accounting for 11 per cant of imports and 5.5 per cent of gnp at the start of the period and 31.2 per cent and 32.4 per cent respectively at the end. If the flow of remittances returns to the lower levels of before the construction boom in the peninsula, then National Income will fall dramatically and Jordan will have a severe balance of payments deficit.
The concern is sometimes expressed that a high level of
remittances can encourage a high level of imports, and particularly of consumer durables. Hence foreign exchange enters the country by one route and leaves by another with little or no productive impact.
In the case of Jordan it is difficult to comment on the
impact of remittances on imports. These latter rose dramatically from 1974 onwards, partly as a result of the influx of Lebanese seeking refuge from the civil war, and partly as development projects began, funded by foreign aid Jordan received. In an attempt to use remittances productively, the government has introduced a "development bond". Without some such vehicle for transforming cash balances into savings and hence productive investment, there is a danger that remittances will not only be spent importing consumer goods but also encouraging inflation. The rate of inflation has




Table 3.9 Jordan: Workers Remittances, Imports (Mn. $ U.S.) and Related Indices
Year Remittances Imports Remittances as a Inflation
Proportion of Imports Proportion of G.D.P.
1973 45 417 10.8 11.1 5.5
1974 75 611 12.2 19.4 6.8
.1975 167 942 17.7 11.9 18.0
1976 397 1,272 31.2 15.3 32.4
1977 500* ...:........ ...........
co
t,,
Source: Central Bank of Jordan, Monthly Statistical Bulletin, Vol. 13, No. 9, various tables.
Middle East Economic Digest, 31.3.78, p. 20.