Gender and Oil: The Changing Role of Women in the Kingdom

By Hania Bekdash, WI-HER Graduate Research Intern and PhD student at Kennesaw State University

Shortly over a decade ago, at the peak of crude oil prices of $145 per barrel, Saudi Arabia’s formal female labor participation rate, as defined by the International Labor Organization (ILO) and measured by the World Bank, was about 16 percent. In 2016, while oil had dropped to approximately $42 per barrel, its female labor participation rate had risen to nearly 21 percent, and continues to rise. While liberal-minded institutions and activists celebrate this as a sign of success of human rights campaigns and foreign diplomacy aimed at promoting gender equity, there is also a utilitarian aim behind the shift: increased women’s labor participation is helping Saudi Arabia move away from an unsustainable oil dependence.

Indeed, women are critical for a society to flourish both economically and socially. Common knowledge in the field of development economics correlates female labor participation with economic growth and gender equality. Development practitioners and scholars generally agree that more women in the labor force also contributes to a more peaceful society. An increase of women in the labor force creates a multiplying effect on economic growth, structural equity, women’s political participation, and hence overarching freedom and equality. In fact, more women in the labor force is also associated with a rise in female enrollment in education, and Saudi women are already increasingly outnumbering men in universities, which in turn boosts female literacy, lowers fertility rates, and contributes to household and national income.

Still, Arab women’s economic rights generally rank very low on global gender gap reports measuring gender equality in the world. The oil-rich countries of the Gulf Cooperation Council (GCC) region, including Saudi Arabia, Qatar, Kuwait, Bahrain, the United Arab Emirates, and Oman, particularly stand out in this regard. In fact, analysts have noted that an active female labor force could increase Saudi Arabia’s per capita GDP by up to 38 percent.

One explanation for the low female labor participation rates is that women in developing oil-rich countries are commonly less inclined to join the labor market because of the type of work available to them. With oil sales crowding out production of other traded goods, there is greater demand for non-tradeable goods like retail and construction. Women are largely excluded from much of these non-traded sector activities based on gendered cultural beliefs that stifle women’s involvement in jobs more typically entailing male-oriented or heavy labor. Consequently, women seek jobs in the traded sector, which is primarily oil. However, with only 7.8% of women total in the global oil industry, women face challenges including unequal opportunity and pay, inflexible work environments and schedules, and poor industry outreach to women about the opportunity of jobs available in the sector. This, compounded with men in the household earning disproportionately higher wages and the cultural belief that men are primary breadwinners, reduces a woman’s economic incentive and necessity for such jobs. Michael Ross, a leading researcher of the relationship between oil and women’s labor, describes this as petroleum patriarchy.

Like other oil rich countries, Saudi Arabia has long relied on revenues from oil exports for the majority of its budget, up to 90%, and redistributes it back to its citizens as part of the social contract: citizens have little representation, but pay no taxes and water, electricity, gas, and housing costs are subsidized. Recently however, in response to the persistent decline of global oil prices, Saudi Arabia, along with other GCC countries, declared its intention to transform from a resource-dependent economy to a knowledge-based one. The decision is part of a national strategy known as “Saudi Arabia’s Vision 2030”.

Announced by Deputy Crown Prince Mohammad bin Salman Al Saud in April 2016, Vision 2030 outlines Saudi Arabia’s plans for social and economic revisions, such as reducing subsidies on energy and water. It also aims to increase the participation of women in the labor market from 22% to 30%. In parallel, women were recently granted the right to vote, to view their marriage contracts, and according to some analysts, may soon be allowed to drive.

The changing role of women in Saudi Arabia is consistent with shifting global financial realities at a time when a knowledge-based workforce is imperative. The founder of the World Economic Forum, Klaus Schwab, declared at Davos 2016 that competition for “human capital” will soon become more significant than competition for financial capital. This may mean that the decrease in oil prices is signaling a more broad positive change in Saudi Arabia, since the necessity to diversify the economy brings with it an increasingly diversified labor market including more women, and a multiplying effect of economic and social prosperity. If Saudi Arabia continues to progress on the path of re-writing its social contract, and rethinking financial strategies to encourage more female participation in the labor market, it will certainly indicate a win-win for everyone.

WI-HER supports progress in gender equality in the entire MENA region and throughout the world. We are especially encouraged by the shifting role of women in Saudi Arabia and the new opportunities it creates for the country and region. We believe that enhanced women’s participation, voice and agency is key to gender equality and can be integrated across the full spectrum of sustainable social and economic development activities.