The oil-rich states of the Persian Gulf region have experienced rapid development fuelled by oil revenues. Oil-driven modernization is rather unique to this region (along with a few other oil-rich states like Nigeria) and has created a number of problems for oil-rich states. Here, after an introduction to "the oil economy," we explore the issue of foreign laborers ("guest workers") in the oil-producing countries of the Persian Gulf region.
Oil links the economies of many North African and Southwest Asian states with the global economy. The economic health of a country like Saudi Arabia or Kuwait is highly dependent upon the price of oil, which is partly based on global demand (though OPEC can manipulate the price somewhat by controlling production rates). But "globalization" impacts these countries in many other ways that are related to the global nature of oil but are not limited to the economics of oil prices. For instance, oil-producing countries have been magnets for global labor migrations, as skilled and unskilled workers alike pour into these countries to fulfill a demand for technical, manual, and domestic work. There is, therefore, a distinct "politics of immigration" within these countries that echoes a similar politics in Europe and America, but is very different at the same time.
As your textbook notes, rising oil prices in the 1970s and 1980s contributed to a rapid accumulation of wealth for oil-producing countries. They consequently invested heavily in large-scale infrastructure development and modernization, and created large state-funded welfare systems for their citizens. These developments created a great demand for skilled and unskilled labor alike, and the Gulf states quickly became magnets for foreign workers, mostly from other Muslim countries, but many from the United States, Mexico, and Europe as well. As your textbook notes, by 1990, 70 percent of the labor force on the Arabian Peninsula was made up of immigrants. As oil prices slumped in the 1990s, however, countries like Saudi Arabia found themselves facing mounting budget deficits (115 percent of that country's GNP by 2000), while domestic populations exploded and most private sector jobs continued to be held by foreign workers. Migration and immigration questions are thus at the center of the difficult development issues that these countries now face as they seek to construct a more sustainable path to modernization than the rapid oil-driven version experienced in the 1970s and 1980s.
First, introduce yourself to some of the basics of oil production and oil economics in this region: Start by visiting the Energy Information Administration's "Country Analysis Briefs page. Pick an oil-producing country or two, such as Saudi Arabia, Kuwait, Bahrain, or Qatar, and examine how oil wealth has impacted its economy, both historically and recently. Another useful site is the Arab Gateway's page on the oil economy . Here you will find links to a variety of information on the economy of oil, including details on production, consumption, reserves, prices, and OPEC. You may want to click on the link to the Related Page "Economy" to learn more about recent changes in oil countries, such as unemployment and the need for an "Arab Common Market."
Now we turn more specifically to the question of migration and the "guest worker" situation in the oil states of the Gulf region. Three brief news summaries from the University of California at Davis publication Migration News are offered here to clarify the nature of labor and immigration in these countries.
Migration News, January, 2004Also, read about the Middle East in the latest issue of
Migration News by following this link.You should also take a look at the demographic indicators for the region, found at
MEDEA's web site.