The latest available data for September 2006 revealed a rise in total Kuwait population to 3.117mn, registering a growth of 4.22% over the end of 2005. Kuwait’s total population increased to 2.991mn in 2005, recording a growth of 8.7% over the previous year. The growth rate in 2005 was higher than 8.1% recorded for the previous year.
At the end of 2005, the number of Kuwaiti residents was 0.992mn, whereas the number of non-Kuwaiti residents was 1.999mn i.e. 66.8% of the total population. During the year 2005, the non-Kuwaiti population grew at 11.2%, which was much higher than the 3.8% growth rate of Kuwaiti population. During 1H06, the non-Kuwaiti population increased by 2.2% over the end of 2005 to reach 2.044mn, where as the Kuwaiti population increased by 1.6% during the same period to reach 1.008mn. The growth in non-Kuwaiti population was on account of strong growth in the private sector, where the demand for low-income expatriate labor increased in construction and the retail sectors.
In the recent period, the influx of expatriates into Kuwait has been driving growth rates since 2001. During the period 2001-05, non-Kuwaiti population has increased at a CAGR of 8.6%, whereas the Kuwaiti population has increased at a CAGR of 3.3%. Due to this higher growth, the share of non-Kuwaiti population in total population increased from 62.3% in 2001 to 66.8% in 2005. In fact before 2001, there was a slowdown in the growth of non-Kuwaiti population during 1998-2000. This was due to decline in oil revenue in 1998, which hit private-sector demand and domestic investment levels in 1999, leading to a decrease in demand for foreign labor that was also felt in the following two years.
Looking at the gender composition, the male to female ratio in Kuwaiti population is more or less balanced. As on June’2006, female residents constitute 51% of Kuwaiti population. However when we consider composition of non-Kuwaiti population, it reveals a sharp skew towards the male gender (69.9%) implying a large number of expatriate workers in construction and other industrial sectors. As most of the immigrants in these sectors are not accompanied by their families and dependants due to their low wages.
More than 80% of non-Kuwaiti populations are in the age bracket of 20-60, which augurs well for the economic growth. Among the Kuwaiti population, 69.8% are below the age of 25. This huge share of young Kuwaiti population indicates the importance of education and health in the Kuwait economy. During the year 2005, close to 180,000 jobs were created. This was higher than 163,000 jobs created in 2004. The total labor force increased by 11.2% in 2005, same level as that of 2004. During the first half of 2006, labor force increased by 2.97% over the end of 2005. The recent growth in economy has fuelled this higher growth in job creation and this is expected to continue in coming years keeping in view the favorable economic growth forecast. The private sector accounted for 89% of the newly created jobs in 2005. During 2005, the labor force in private sector increased by 12.7% compared to 5.7% for the public sector. On account of the growth in private sector, the share of public sector in the total labor force has come down from 24.9% in 2001 to 20.6% in 2005. This has further come down in the first half of 2006.
The share of Kuwaitis in the labor force has declined in recent years. It has come down from 19.4% in 2001 to 17.2% in 2005. As on June 2006, 88.1% of Kuwaitis work in public sector, whereas rest 11.9% are part of private sector labor force. The rate of unemployment among Kuwaitis was at 3.7% at the end of 1H2006. The unemployment rate among Kuwaitis has become a concern for the government. To tackle this, the government has launched quotas for private sector companies. The Kuwaiti government has accelerated plans to “Kuwaitize” the private sector, by setting a target of replacing 10% of expatriate workers with Kuwaitis each year and establishing quotas for different sectors of the economy, with incentives for private firms which comply with the regulation. This seems to have positive effect, since the unemployment rate among Kuwaitis has come down from 4.4% on June 2005 to 3.7% in June 2006.
In addition to Kuwaitization, the government is also trying generate sufficient jobs in coming years to absorb huge proportion of young Kuwaiti population. There are talks of creating more employment opportunities for citizens in the oil sector. In 2000, the government passed National Employment Law to encourage citizens to seek jobs in the private sector. This law extends government provided social and child allowances to citizens in the private sector, which were only available to government employees previously. The government hopes to make private sector employment more attractive to Kuwaitis, particularly for new graduates. We believe the government should also encourage entrepreneurship to generate more jobs.
