The Gulf’s Middle Class: A Closer Look

March 5, 2007

Washington Watch

Dr. James J. Zogby ©

President

Arab American Institute

In my last column, I presented a snapshot of the middle class in the Gulf countries of Saudi Arabia, UAE and Bahrain. The picture produced by our polling at Zogby International, allowed us to describe some characteristics of this class, and measure, in a general way, their attitudes towards a variety of social and economic concerns.

Those in this Gulf Arab middle class, as we reported, were largely wage-earners, working in what would be called in the West “white collar” jobs. They had expectations of upward mobility for themselves and their children. While varying from country to country, this initial reading of the data showed that the overall outlook of the middle class was, for the most part, positive.

That was the good news.

Like any snapshot, the picture was one-dimensional and taken from a particular angle. Utilizing the same data and altering the angle of vision yields a somewhat different picture, even revealing areas of concern.

While it is true, for example, that when looked at as a group, the measurements of the Saudi middle class appear to be positive, when that same group is viewed through the lens of age or whether they are employed in the public or private sectors, a very different picture emerges.

Saudis under 30 years of age, for example, are less secure with their jobs, and less satisfied with the amount of income they earn and the quality of their lives, than are older Saudis.

An even closer look at the data reveals why these younger Saudis feel less better-off than their older compatriots. Younger Saudis are more employed in the private sector (almost two thirds), while those over 30 are more employed in the public sector (more than one-half), and younger Saudis are employed in significantly lower paying jobs.

In Saudi Arabia, while public sector positions are, overall, more secure, better paying and subject to more regular wage increases, the same is not the case in the private sector. Those employed in the private sector, in fact, fall at both ends of the continuum. This group contains both the wealthiest Saudis, at one end of the scale, and the majority of the poor at the other.

And herein lies the potential for an even greater problem down the road. From my friends at McKinsey and Company, the group that commissioned our study, I learned that the current Saudi labor force of over three million will almost double in the next decade, adding over 300,000 new job-seekers each year. This rapid expansion in employment cannot by met by the public sector without greatly expanding and severely straining government resources. But with the private sector currently creating only about 80,000

new jobs each year (and too many of these at the low end of the wage scale), a difficult situation looms just over the horizon.

What I learned from my recent visit to the Kingdom is that some government officials and business leaders are attentive to these problems. That is why there are, at present, ambitious plans to construct five rather massive new industrial cities. When completed, and if successful, these new communities are designed to generate millions of new jobs, mostly in the private sector.

To get there, of course, will require more than capital, bricks and mortar. Changes will be required in the Saudi educational system and the young must be imbued with a greater sense that with ambition, hard work and skill, social and economic advancement can occur. At the same time, more must be done to foster small start-up businesses that can create not only new jobs but become generators of new wealth and upward mobility.

It is a good sign that some Saudis are aware of these challenges and engaged in planning to meet the demands created by this phenomenal growth. In Bahrain and the UAE there are different problems, to be sure, but, here too, I found leadership engaged.

My visit, of course, occurred while multiple conflicts (and the danger of more) roiled in the region and consumed public discourse. What was impressive was that despite the uncertainty created by these many crises, some political and business leaders were moving apace to address the current and future challenges facing their rapidly changing

societies. But the difficulties inherent in maintaining this focus in the midst of regional upheaval, cannot be overestimated.

If US policy makers wanted to play a constructive role in promoting social and economic advancement in this region, they would work to resolve and tamp down existing conflicts and most certainly refrain from creating new ones. For Gulf Arab society to move forward, the full attention of leaders and citizens alike will be required. As long as Iraq is in danger of imploding, the existential crisis in Palestine remains unresolved and the danger of war with Iran looms large, it will be difficult to focus the full energy and resources required to meet pressing needs.

The snapshot we took reveals so much more when we look at it differently and when our understanding of its subject matter is informed by additional information. It is not unlike an old photo of a smiling family. A stranger to that family wouldn’t understand the history or context of the photo – the underlying tensions masked by a smile or the unfortunate (or blessed) events that took place a few months after it was taken.

And so it is that at first glance, our poll of the middle class merely revealed the characteristics of this socio-economic grouping. But on a closer inspection, we are able to add detail revealing potential fault lines and also better define what needs to be done to address the problems that like ahead.

Next, an even closer look…into the future.