Maintaining the Order: Contemporary Kuwaitisation Dynamics and their Historical Perspectives

Manal R. Shehabi
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Manal R. Shehabi: Business School, The University of Western Australia and Oxford Institute for Energy Studies, The University of Oxford, https://www.web.uwa.edu.au/person/manalr..shehabi

No 17-15, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: Increasing influences of Gulf countries in the wider Middle East suggest a possible ‘Gulfisation’ of the region transmitted through economic, political, and military means. Less visible, however, are underlying struggles within Gulf Cooperation Council members to protect their respective local ‘Gulf’ entities from influences of the high concentration of expatriates in their labour forces and populations. This protection is mostly visible in localisation policies of the labour force. This paper examines this process in Kuwait known as ‘Kuwaitisation’, tracing its historical events and identifying its features through parallels between past and contemporary events. It is posited that while Kuwaitisation is presented as an economic labour policy to increase indigenous employment in the private sector and reduce reliance on public welfare, it is an instrument reflecting the political economy of the welfare state to achieve demographic, cultural, and political objectives, and that its failure has been partly deliberate and partly systematic. Although Kuwaitisation is as old as the country’s independence, its importance was instigated by demographic and political shifts surrounding the 1990 Iraqi invasion. The Gulf crisis set the stage for a deliberate shift in temporary migration policies and the ensuing forced exodus of Palestinians from Kuwait. It also set a precedence for the contemporary use of Kuwaitisation as a seeming labour policy motivated by minimizing transmission of external and internal shocks to Kuwait and maintaining its identity. Given Kuwait’s economic structure and implications of public sector employment policies coupled with conflict in the wider Middle East and expectations of a persistently low petroleum price environment, contemporary Kuwaitisation dynamics have not been successful in achieving its stated objectives, including reducing welfare and public sector expenditures. Instead, these dynamics cement welfare, the role of the state, and the ‘Kuwaiti’ identity as unequivocal elements of the Kuwaiti political economy.

Pages: 42
Date: 2017
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