The Changing Role of Labor Migration in Arab Economic Integration

Abstract

During the oil boom of the 1970s and early 1980s, labor migration became an effective instrument for addressing labor market needs at the national level while simultaneously serving the goals of Arab economic integration. The 1990s, however, witnessed a rapid deceleration in the net inflows of Arab workers to the oil-exporting countries. The negative effects of lower oil revenues were reinforced during and after the 1991 Gulf War by the replacement of workers from the region with migrants from Asia as well as ongoing efforts in the oil-exporting countries to nationalize their labor forces. Current unemployment rates, together with the projected rapid expansion in the national supply of the receiving countries, provide further incentives to restrict migration inflows especially from the Arab world. As a result, the future contribution of labor migration to Arab economic integration will decline.

Keywords: Migration, Economic Integration, Middle East

JEL Classification: F22, O15, R23