Track: Student Paper Competition

Abstract

Megaprojects in the Middle East are typically large public infrastructure improvements that require fast-paced design and implementation.  Successful multinational bidders primarily focus on achieving acceptable quality at the lowest costs.   Inevitably, this focus drives those businesses to hire less expensive but skilled foreign labor to accomplish project objectives.  A resulting major drawback is that job opportunities are not readily available to the local workforce, reducing social benefit in terms of economic growth.  Since the Middle East is highly affected by this negative aspect of megaprojects, governments have adopted a policy referred to as "nationalization initiative," where firms are required to hire a certain percentage of local labor.

This paper recommends an approach to satisfy the government’s requirements on labor hiring while meeting project cost and schedule commitment.  First, the paper investigates the benefits of megaprojects to multinational companies and their impacts on local labor market.  Second, the paper discusses the reasons for the historical underutilization of local workforce.  Finally, the paper assesses how the nationalization initiative affects multinational businesses, local labor market, and economy of the hosting nation.  The results will serve as the cornerstone in the recommendation of necessary and suitable practices to optimize benefits to all project stakeholders.