PGCC policy makers in the region have been faced with a two-fold labor problem for close to 30 years now — growing unemployment among young nationals and an increasing number of foreign workers in the region. The issues related to foreign workforces are also growing in a steady, upward negative trend. The PGCC has never succeeded in coming up with a clear-cut solution for what has become a chronic problem. The question which has been facing the Ministers of Labor and the leaders of the six-nation bloc in their annual meetings since the formation of the PGCC is how to contain more nationals in one of the most prosperous regions in the world and maintain — at the same time — high growth rates spurred by the availability of low-cost foreign workers?

The balance between what seems to be two contradicting interests has proven difficult to achieve, especially with the pressure exerted by the local business community every time governments in the region seem to develop the will to correct the imbalance in labor policies. The business community in the PGCC has been accused of opposing any solution to the labor issue as it feels that much of its prosperity and growth has been achieved due to millions of the low-cost foreign workers being imported to the region. Businesses have always wanted such policies to remain intact. Governments, on the other hand, believe that foreign workforce is costing business less because of the government subsidies of services and facilities. Studies have proposed that local PGCC workforce will exceed 20 million people in 10 years time from its present day levels of about 15 million. The additional five million scheduled to enter the market in the coming decade require special programs that revamp the educational, social and economic set-up in order to make sure that PGCC citizens will be absorbed by businesses in the region. Despite a significant drop in the unemployment rate in the UAE, Sultan Bin Saeed Al Mansouri, the UAE's Minister of Economy, believes that the current 4.2 percent unemployment amongst nationals is still very high and needs to be lowered. The rate of unemployment was hovering around 14 per cent in 2008. -------------------Sponsorship system The sponsorship system was introduced by different Persian Gulf states in the early 70s. It was aimed at ensuring that employers took care of their foreign employees brought in for certain projects and specific jobs in the region. The system has been misused by a number of unscrupulous employers. Sponsors have been accused of limiting the freedom of their employees by seizing their passports, preventing them from travelling inside the country of residence and abroad, and preventing them from leaving for green opportunities. Bahrain was the first PGCC country to scrap the sponsorship system. The sponsorship system was replaced in August 2008 by the Labor Market Regulatory Authority (LMRA). The UAE said it will not cancel the sponsorship system because no country in the world allows foreigners without local sponsors. The Ministry of Labor said it has relaxed the movement of foreign workers in the market and introduced a wages control system to prevent employers from exploiting their employees. (Source: gulfnews.com)