This study examines the background and current status of recent women empowerment policy in the Middle East, especially in Saudi Arabia and the United Arab Emirates, and suggests new agenda for government-level policy cooperation and favorable sectors due to recent changes. The level of economic participation by women in the Middle East remains among the lowest in the world. Laws, institutions, and cultures inherent in the region have long restrained women’s social and economic activities. Recently, however, major oil countries in the Middle East are encouraging women’s economic and social participation. Thus women economic empowerment policy is becoming a key labor policy for these countries to depart from resource-oriented rentier states in preparation for the upcoming post-oil era. This study analyzes the background, detailed policies, and economic effects of women’s empowerment in the region, as well as providing policy implications and concrete policy approaches to further economic cooperation with Middle Eastern countries.
   Chapter 2 surveys the background of low female economic participation in the Middle East and the status of female economic and political empowerment in the region, using data on the Gulf Cooperation Council countries. There are three main reasons for low female economic participation in the Middle East relative to other regions in the world. First, the patriarchal system remains strong and a culture which places honor above all else places many restrictions on women. This cultural and historical background has limited the role and behavior of Middle Eastern women in many ways and still affects social perceptions of women’s economic participation. Another factor is how insufficient the institutional and legal environment is for female participation in the labor market. The male guardianship system, which requires women to earn permission from their male guardians for important social decisions like marriage or employment, remains in place in many countries in the region. More than half of the Middle Eastern countries have restrictions on women labor, including their occupations and industries. Maternity leaves in the Middle East are relatively short compared to other regions, and most countries are yet to allow parental leaves. Still, in some countries such as Saudi Arabia and the UAE, employers are obligated to provide full pay for employees during maternity leaves. Lastly, the unique oil-dependent economic structure also discourages women from participating in the economy. The oil-based economic structure weakens the international competitiveness of trade goods producing sectors, in which female workers are traditionally more active, and increases the reservation wages for women, thus reducing both the demand for and supply of female labor. Data for GCC countries in the Middle East, where women’s economic activities are particularly more limited, show that these countries rank among the lowest, from 121st to 141st overall, on the global gender gap index. In particular, while legal/political institutions such as the right to vote and electoral eligibility are normally ensured for women, actual political participation by women generally remained limited. In GCC countries, female enrollment rates by education level are similar to or even higher than their male counterparts, especially in higher education. Although women’s education levels are higher than men’s, women account for less than 30% of the total workforce, and female economic participation rates are also relatively low. Female unemployment rates are also higher than male unemployment rates because there are few suitable and decent jobs for women due to social and cultural constraints. In private sectors where the share of foreign workers is high, many foreign female workers are housekeepers and elementary workers, with the result that wage levels of women remain a mere 20% to 47% of men’s wages. In public sectors, on the other hand, the gender pay gap is relatively small and the majority of workers are male and female nationals who are both paid well.
   Chapter 3 surveys the female economic empowerment policies of Saudi Arabia and the UAE. Saudi Arabia is undergoing visible changes from when women’s economic activities were virtually unheard of in the country, as it has dramatically eased and reformed restrictions against women recently. As the male guardianship system, which affects women’s lives in general, has been weakened, the environment for women to participate in economic activities has improved. Allowing women to drive has increased their prospects to find jobs. The UAE, which differs from Saudi Arabia in its economic and demographic background, has a better environment for women in terms of institutional constraints on women’s activities, as women empowerment rose as a main agenda in the country earlier than Saudi Arabia. Both countries actively support women’s participation in private sectors and, in particular, encourage women’s start-ups. In addition, as women’s economic activities expand, maternity and child-care support policies develop. To allow a work-life balance for women, telecommuting is encouraged and supported. Furthermore, support for female education and vocational training is being promoted as a key policy for women’s economic empowerment.
   In Chapter 4, we analyze the economic effect created by Saudi female nationals entering the labor market of the nation, where female economic empowerment policies have been expanded to achieve the Saudi Vision 2030. In particular, we conducted an empirical study to test the statistical relationship between Saudi national labor market participation and economic growth, as well as the substitution effect between Saudi national workers and non-Saudi workers. In Saudi Arabia, 62% of the 30 million resident population are nationals, compared to other countries in regions were more foreigners reside than nationals. Being the source country of the second-largest amount of remittances from migrant workers in the world places a huge burden on Saudi Arabia, along with the high unemployment rate of Saudi nationals. In this regard, the recent female labor policy of Saudi Arabia focuses on the substitution of migrant workers by Saudi female workers. This empirical study builds the longest time series data of Saudi national female labor market participation rates from 1999 to 2018. It is important to note that overall female labor market participation data used in most related literature are actually inappropriate because foreign workers account for the majority in the Saudi labor market. It is a key contribution of this study that it uses the longest time series data compared to some previous studies that use Saudi national data. The empirical results show a strong positive relationship between Saudi national female labor market participation and economic growth when controlling for effects from the oil sector. On the other hand, the findings for a substitutional relationship between migrant workers and Saudi female workers were not statistically significant. Despite several recent policies by the Saudi government for foreign workers, such as increasing the costs associated with hiring foreigners and limiting work permit quotas, the participation rate of Saudi women in the labor market continues to show a strong positive relationship with the share of non-Saudi workers in the labor market. It appears difficult for Saudi female workers to fulfill the demand for non-Saudi workers because Saudi nationals tend to avoid domestic jobs like private drivers or housekeepers. We believe further social and cultural change will be necessary to expand women’s economic participation in the future, in addition to legal and institutional reform, vocational education, as well as improvements in child care and welfare support.
   Chapter 5 explores the demand for government-to-government (G2G) cooperation as women’s economic participation expands, focusing on Saudi Arabia and the UAE, and suggests emerging sectors and industries and implications for Korean companies operating in the countries. Korea’s experience in promoting female labor participation for economic development through women’s education and vocational training can be particularly useful to develop female education and training systems in Saudi Arabia. As the government of Saudi Arabia pushes up women’s labor participation, the development of human resources to meet demands in the labor market has become a priority in policies. Korea’s experience of implementing similar policies can be shared with Saudi Arabia in the form of cooperation between related institutes for female education in developing curricula and educational infrastructure. In addition, a platform connecting Saudi students with Korean companies in Saudi Arabia, for instance university student internship programs, can encourage exchanges in the education sector. Meanwhile, the demand for women’s vocational training in Saudi Arabia and the UAE is expected to increase cooperation in the establishment of training facilities and systems as well as training for instructors. As the demand for vocational training instructors is expected to increase, we can expect to see further cooperation in this area.
   For labor and administrative policies, the export of women’s employment support systems can be a priority item of cooperation. We expect to see a rise in demand for employment information systems within Middle Eastern countries in the near future. Based on the experience and achievements of employment support institutes operated by the Korean government, such as the Women’s New Work Center, we can fully expect further adoption and development of such employment support systems in these countries as well. Second, we can consider sharing policy experiences and know-hows in supporting work-family balance. As women’s economic activities increase in the Middle East, demand for work-family balance and child care systems will increase soon. These countries yet lack sufficient experience and know-how to develop comprehensive and systematic policies. Since Korea has been working on these policies for a long time, such as reforming related laws and establishing and implementing long-term plans since the 1990s, so substantial policy cooperation can be reached in this area. Third, Korea’s labor market forecasting system can be exported to these countries. Forecasting labor future supply and demand is important as demand for substitute workers increases due to a rise in maternity leaves, and this will increase the need for skill in these forecasts as female workers continue to diversify their fields of speciality. We can expect demand for employment forecasting systems developed in Korea. Fourth, joint research projects at women’s policy institutes and researchers can be considered. Joint research between Korea and the Middle Eastern countries can help analyze the situation of the two countries regarding participation in women’s economic activities and to develop new cooperation agenda before launching and scaling up actual cooperation projects.
   Considering the population, purchasing power, and potential of women-related markets among the Middle East countries, Saudi Arabia and the UAE can be considered Korea’s key partners and promising markets. Korea mainly exports automobiles and their parts, power and construction equipment, and mobile phones to both countries, but the demand for various products is expected to increase due to economic diversification and the expansion of economic activities by women. In particular, changes in women policies, such as easing male guardianship, allowing women to drive, increasing women’s employment, and easing clothing restrictions, will lead to more women making independent consumption decisions and exercising their purchasing powers. This is likely to generate more demand for beauty products and services and travel to Korea with an interest in Korean culture, like the Korean Wave. We expect the export of goods and services matching women’s needs to be promising areas.
   Meanwhile, Korean companies operating in the region will have to adopt new strategies by identifying policy changes and future demands as Saudi Arabia and the UAE adopt nationalization policies in their labor markets. In the case of Saudi Arabia, where female labor policy is changing rapidly, we can expect to see enormous changes in the business environment. The additional costs incurred by segregating male and female workers in working places will decrease. Meanwhile, localization policies to ensure local content requirements along with nationalization employment policies will make it necessary to consider local joint ventures and production instead of simple export to these markets. Due to the lack of local technical capacity in Saudi Arabia as well as policy interest in local technical training, we can also expect for the operation of private education facilities for vocational and technical education to be a promising area.