How freedom of movement can aid post-Covid recovery in the GCC

A trader walks by beneath a stock display board at the Dubai Stock Exchange in the United Arab Emirates, on 8 March, 2020. [Getty]
4 min read
18 June, 2021
Analysis: The labour economies of GCC countries are shifting due to the Covid-19 pandemic. Their recovery may benefit from more economic cooperation and freedom of movement.

Last month, the International Air Transport Association (IATA) urged Middle Eastern governments to make plans to restart travel links when Covid-19 permits. 

Data from the IATA showed that air traffic in January 2021 had decreased 82.3% compared with January 2019 and that the ongoing crisis has put over 1.7 million jobs and $105bn in GDP at risk in the Middle East.

The IATA pointed out two areas in which governments can work together to move forward with travel links: an operational restart to bring aircraft and airport terminals back into service, and travel credentials verifying testing and vaccinations.

While no single vaccine certification system has been accepted yet, Qatar Airways, Emirates, Etihad, and Gulf Air began testing the IATA app in January. The mobile app enables passengers to create digital passports to provide proof of their testing and vaccination history for airlines and immigration officials. 

"The GCC as a whole is expected to see a 2.1% increase in GDP this year after a 5% contraction in 2020"

The 27 member states of the EU are working on a similar EU Digital Covid Certificate, to be launched 1 July, to help restart freedom of movement.

Despite moving forward with testing the IATA app, the GCC states, it should be noted, are at varying stages of recovery from the Covid-19 pandemic. 

Bahrain recently extended a series of restrictions imposed in May; Oman this week reported a record number of daily deaths, at 33. Meanwhile, Saudi Arabia announced this week that no foreign pilgrims will be permitted to perform the hajj next month, as in 2020. Those hoping to perform the hajj will be required to be vaccinated, between the ages of 18 and 65, and either citizens or residents of Saudi Arabia. 

The prospect of foreign travel for leisure and business, then, may be complicated, despite the apparent political will (and economic necessity) to move forward.

GCC's post-Covid recovery

Still, the outlook for economic recovery is encouraging, particularly for the GCC, as global oil prices have increased. The GCC as a whole is expected to see a 2.1% increase in GDP this year after a 5% contraction in 2020. 

Preparation for events like Dubai's Expo 2020 and the 2022 FIFA World Cup in Qatar are also expected to aid growth, in addition to restarting travel.

The question also becomes what type of GCC will emerge post-Covid. 

It is hoped that, after the Al-Ula Summit at the start of the year, ties will be stronger among the neighbouring states. This week, Qatar hosted an emergency Arab League summit which resulted in a unified statement backing the UN Security Council's call to intervene in a regional dispute about a dam built by Ethiopia on the Blue Nile. 

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The foreign ministers also formed a joint commission to discuss the Palestinian issue and the latest attacks on Jerusalem and the Gaza Strip, reiterating Arab League support for any Egyptian, Arab, or international effort to rebuild the Gaza Strip. Such developments are encouraging, as they suggest greater unity across Arab states.

Within the GCC, Qatar held talks in May with the UAE, and Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani reported that they have a "positive vision" for overcoming their differences. 

In addition, discussions have been held with Saudi Arabia, which Emir Sheikh Tamim bin Hamad Al Thani visited in May, and with Egypt, where the Qatari foreign minister held discussions in May as well. Moving forward, then, we may see more efforts to overcome differences through expanding economic ties when the pandemic allows.

"GCC states face the challenge of reshaping their labour forces and may find economic cooperation and enhanced freedom of movement critical to those efforts"

Migration in the GCC

One question that remains is what will happen to the GCC's large expatriate populations, many of whom have either been stranded abroad or have emigrated over the course of the pandemic. 

Bahrain announced Sunday that it would stop issuing work permits for citizens from countries on its red list due to Covid-19; this list includes large labour-sending countries such as Bangladesh, India, Nepal, Pakistan, and Sri Lanka, and so it is uncertain how a resulting labour shortage would be addressed. Kuwait has also sped up efforts to nationalise its workforce with fewer expatriate workers, with a recent report revealing that more than 83,500 expatriates left Kuwait in the fourth quarter of 2020 alone.

An S&P report in February stated that the overall population of the GCC states decreased by some 4% in 2020 as expatriates left amid lower oil prices and the pandemic. The report predicted that this trend would continue through 2023, in part due to efforts to nationalise labour forces.

Amidst a predicted economic recovery, then, the GCC states face the challenge of reshaping their labour forces and may find economic cooperation and enhanced freedom of movement critical to those efforts, with IATA certification an important first step.

Dr Courtney Freer is a research fellow at LSE Middle East Centre.

Follow her on Twitter: @CourtneyFreer