According to Deutsche Welle, this incident is one example of the friction arising from new labor force strategies in the Gulf states. Experts at the Carnegie Endowment for International Peace have noted that such economic policies are beginning to disrupt longstanding social contracts in the region. Historically, Gulf states, buoyed by oil income, have been the primary providers of jobs, housing, and other benefits, following a social contract where the state supported its citizens, who in turn accepted authoritarian governance. However, with declining oil prices, a global shift away from hydrocarbons, and increasing youth unemployment, maintaining this contract has become challenging for oil-producing Middle Eastern nations.
In response, Gulf governments are encouraging non-oil, private-sector businesses, urging young citizens to pursue entrepreneurship, and reducing public sector budgets. Frederic Schneider, a senior non-resident fellow at the Qatar-based Middle East Council on Global Affairs, confirms the growing unease as governments transition citizens from secure public-sector jobs to more precarious private-sector roles and curtail oil-funded welfare benefits. Saudi Arabia, for instance, launched a “golden handshake” scheme in January to incentivize Saudis to leave the public sector for private employment.
At the same time, Gulf states are striving to attract foreign workers essential for non-oil sectors by adjusting policies on foreign property ownership, long-term residency, and relaxing religious and social restrictions. While the UAE initiated these changes in the mid-2000s, Saudi Arabia has recently begun similar reforms, including a skilled workers visa scheme starting mid-2025 and allowing foreign property ownership from 2026. The Saudi government has also decreed that foreign companies must have headquarters in Saudi Arabia to qualify for government contracts.
These top-down economic transformations are creating new social tensions by favoring certain types of foreigners, the UAE-based researcher points out. As Emiratis and Saudis increasingly consider private-sector opportunities, new migrants are perceived as competitors in the labor market. Moreover, cultural frictions are emerging as conservative locals react to measures intended to accommodate foreigners, such as debating weekend changes, recognizing non-Islamic holidays, and the perceived increase in prostitution and alcohol consumption.
In the UAE, these social tensions are further intensified by the ongoing conflict in Gaza, argues Schneider from the ME Council. The influx of Israeli businesses and tourists, facilitated by normalization agreements, has led to hosting entities involved in contentious activities in Gaza. The International Association of Genocide Scholars recently accused Israel of committing genocide in Gaza, a claim that Israel denies.
Schneider observes a growing disenchantment with the West among Gulf state locals, driven by perceived hypocrisy regarding the Gaza conflict and diminishing reliability of allies like the US. Foreign businesses are increasingly viewed as encroaching on local enterprises, exemplified by the significant investments in Saudi Arabia on Western consultancies for projects like Neom, which domestic consultancies desire to partake in.