Arab Gulf states: an assessment of nationalisation policies

Gaps in labour rights and labour prices between nationals and migrant workers are the main causes explaining the low participation of GCC citizens in the region’s private labour markets. Past policies of “Gulfization” have not directly addressed these structural constraints but have rather attempted to impose higher nationalization quotas by fiat, with limited success. More recently, some of the Gulf governments have started to use taxes and subsidies to try to narrow the labour price gap; at the same time, some have improved the labour mobility rights of foreigners. This paper provides a preliminary assessment of these “second generation” policies. It concludes with general observations on how the rights and price gaps could be closed more systematically and on the broader distributional reforms this might entail.