Glaring inaccuracies in GCC population figures result in skewed development outlook of Gulf countries

Exceptionally large number of expatriate workforce impacts key economic indicators such as GDP, technology adoption
Study recommends the use of three levels of population figures to provide a more realistic account of the population demographics and a much higher level of accuracy for the relevant indicators

Population estimates in the GCC that are used by local, regional and international organisations such as the United Nations (UN) and World Bank have been found to differ by as much as 25 per cent or more from the best official or authoritative estimates, resulting in serious problems with completely distorted socioeconomic indicators, revealed a recent study conducted by Madar Research and marketing communications consultancy Orient Planet. A population figure is important for a country in several ways as it is the basis for calculating numerous performance indicators, including per capita gross national product, tertiary enrolment ratio, technology adoption, or the number of physicians per 1,000 of population.

The study pointed out that some countries have more than one official population estimate, with significant differences between them, as in the case of the UAE, which has conflicting population figures that are used by the UN, the UAE Federal National Council (FNC), the UAE Ministry of Economy (MoE) and the UAE Ministry of Labour.

One of the consequences of this situation is the inflated performance indicators of a country in certain statistical categories. For instance, according to the International Telecommunications Union (ITU), the UAE had the highest mobile phone penetration rate in the world in 2007 at 176.52 per cent. ITU based the calculation of its indicator on a UAE population of 4.38 million (end of 2007). However, the most realistic estimate for end 2007 released by the FNC was about 6.5 million. Using the FNC's estimate, the UAE's mobile penetration rate would stand at 119.06 per cent, dropping its ranking from number one to 16th.

The indicator as calculated by the ITU is about 57 percentage points higher than the one calculated by the study, using best official estimates published by government sources. Recalculating the same ITU indicator for other GCC member states reveals differences as big as 56 percentage points in Qatar, 46 in Bahrain, 16 in Kuwait, 8 in Oman and -1.58 percentage points in Saudi Arabia. Except for Saudi Arabia, mobile penetration rates as calculated by ITU, which used old population figures or underestimates, have been greatly blown up, thus unintentionally – or carelessly – giving the world the wrong or unreliable information about the mobile phone scene in the GCC.

In another example of how the use of a wrong population figure can affect a country's world ranking, the International Monetary Fund (IMF) has listed Qatar as the country with the highest GDP (PPP) per capita in the world in 2008, calculated at USD 85,868. This was based on a population of 1.1 million. However, using the official population figure of 1.45 million released by Qatar Statistics Authority for mid 2008, Qatar's 2008 GDP (PPP) per capita becomes USD 65,092 or more than 24 per cent lower than the IMF figure. Nonetheless, the correction would only bring down Qatar's global ranking by one notch, allowing Luxembourg to occupy the top spot.

Explaining the reason behind the inconsistencies, Abdul Kader Kamli, President & Research Director of Madar Research Group said: "Because of the extremely high percentage of expatriate workers arriving and leaving the GCC, population figures in some countries in the region have changed sharply from one year to the next, resulting in significant distortions in the annual performance indicators such as GDP and technology adoption rates. Compounding the problem is the presence of several versions of population figures and estimates from different branches of government. The first step towards resolving this issue is to appoint independent government bodies that should have the sole responsibility of regularly updating and verifying all statistical information related to the country's population using best international practices and standards."

Nidal Abou Zaki, Managing Director, Orient Planet added: "If the credibility and reliability of performance indicators and other key statistical figures continue to be undermined, governments as well as business organisations operating in the region will certainly face major difficulties in making informed business and strategic decisions that affect the socioeconomic growth of the GCC. Knowledge is the key that will unlock the development potential of the region. Swift action must therefore be taken to ensure the integrity and uniformity of census results, population estimates and other relevant demographic data in the GCC."

A census, if carried out properly, is the most accurate figure for the population in a given year, while growth rate is added to provide a reasonable population estimate for successive years. Unless there is a dramatic change forced by war or natural disaster, a population figure usually follows a more or less steady growth pattern based on birth rate, mortality rate and migration.

However, the Madar Research-Orient Planet study revealed that the six GCC member states represent a population case whose growth rate and peculiar demographics have defied the norms and have led to largely overlooked or underrated misrepresentation of the population and the numerous indicators that depend on it. The UAE, Qatar, Kuwait and Bahrain have been particularly vulnerable to inconsistencies in statistical data as these countries attract large numbers of expatriate workforce and thus have the highest annual population growth rates in the GCC and among the highest in the world.

For the past three to four decades, the GCC states have been relying on expatriate workers to fuel one of the largest and fastest construction and development booms in the world. This workforce, which covers the whole spectrum of skills from none to highly qualified professionals, has grown over the years to constitute anything from 20 per cent to 80 per cent of each country's population in the GCC by end 2008.

Furthermore, while in most countries around the world part or most of these expatriate populations would turn into permanent residents and eventually naturalised, GCC countries have very restricted naturalisation laws, which allow for only a trickle of expatriate residents to gain local nationalities. According to the study, the unique population composition of exceptionally large ratio of expatriate workers to nationals presents complications that require special treatment to rectify how national performance indicators should be measured.

The study examined the population figures used by UN organisations during the past five years (2005-2008) and calculated the population growth rates for each of the six GCC states. These were compared with the growth rates calculated as per the best official estimates available for each year. The difference in growth rates was quite disturbing. For instance, the growth rate for the UAE in 2008 stood at a mere 2.66 per cent according to UN data, while the one based on official UAE figures stood at 13 per cent. All UAE growth rates witnessed huge variations, while year after year the gap between the UN population data and government figures became larger.

Difference in growth was also very large for Kuwait and Qatar. The UN growth rate for Kuwait in 2005 was three per cent, compared with 8.62 per cent as based on government estimates. Growth rates for Saudi Arabia did not show big variations and in 2006 official estimates indicated a growth as low as 1.84 per cent – even lower than the UN rate. In the case of Saudi Arabia, however, several indicators suggest that government population figures over the past few years were gravely underestimated. A census scheduled before the end of 2009 is expected to rectify Saudi Arabia's population figure.

The current world recession is yet another factor that has resulted in changes in the population and its demographics, according to the Madar Research - Orient Planet study. For instance, many expatriate workers who had brought their families from their home countries would under the current financial crunch be forced to send them back home where life is often less costly. This trend is expected to change the age distribution, male to female ratio, among many other demographic, socioeconomic and ICT indicators.

Adding more complexity and confusion to performance indicators is the presence of large transient population of unskilled labourers. In 2008, these labourers, who are mainly from south and southeast Asia, constituted up to 35 per cent of the total population in the UAE, 45 per cent in Qatar and lower percentages in Kuwait and Bahrain, followed by Oman and Saudi Arabia.

The impact of such transient population is much stronger when considering ICT indicators. As majority of this labour force is illiterate or have limited financial resources, they hardly or never use a computer or the internet. Since they count as part of a country's population despite that they are transient (sent home after a project's completion), they bring down or skew the internet and PC penetration rates in the country. This means that when their numbers are reduced on a given year, internet penetration surges, while in a construction boom their increased numbers bring down the penetration rate. The study, though, noted that their impact on mobile phone penetration is less negative since many workers use mobile phones.

Proposed Remedies

According to the study, independent government bodies responsible for generating and regularly updating an official database of all statistics about the country's population and various demographics has already started to be established in two or three GCC countries. The study further stated that such a government entity would also be responsible for using the proper channels to regularly communicate census results, population estimates and relevant demographic data to the United Nations and other global organisations. The body should also monitor global research reports to ensure accurate data are used.

* All statistical representations in this release are produced by Madar Research and Orient Planet