Bahrain mulls sectoral caps on foreign labour
Manama, January 19, 2010
Bahrain's labour market reforms have started to increase the cost of foreign workers to the benefit of locals, a government official said, with the government now working on introducing caps on foreign labour.
Bahrain is reforming its labour market to drive up the cost of foreign labour, mostly unskilled workers from Asia, and improve the competitiveness of its own population.
"We have seen a growth in the cost, not that significant, but it shows that the trends start moving up," Ali Radhi, chief executive of the Labour Market Regulatory Authority (LMRA), told Reuters in an interview.
The next step in the reform process will be ceilings that cap the number of foreign workers per sector. "If you try to control the inflow, then people will think more about the productivity and quality of the people they bring, and this is part of the reform's objectives," he said.
Radhi said the ceiling would be a moving target adapted to the growth of the economy and individual industries.
He declined to say when the ceilings might be introduced but said LMRA had finished its studies on the matter and submitted them to LMRA's board for a final decision.
Other Gulf countries such as Saudi Arabia and the United Arab Emirates have taken a top-down approach to the labour market by forcing companies to employ nationals and to fire foreigners first during the current economic slowdown.
Bahrain's progress in reforming its labour market is closely watched by policymakers in the Gulf region who have to balance business demand for cheap Asian labour against providing jobs to young local people.
The kingdom, whose population is about 1.3 million, has introduced a monthly fee of 10 Bahraini dinars ($26.5) paid by employers for each foreign worker to finance training for locals.
Last August it allowed employees to change employers without the consent of their employers, hoping that by increasing foreign workers' rights it will improve their ability to bargain for higher wages and thus make local workers more attractive.
The number of workers seeking to change their employer rose to about 1,500 in December, from around 350 in August, according to LMRA data. The data also shows that the gap between the salaries of locals and foreigners has decreased by 15 percent in selected sectors such as construction.
Radhi said the effect will be stronger when existing work contracts expire and employers choose between foreigners and locals under the new regulations for the first time.
Bahrain is also tackling its employment black market. Companies with a license to employ foreign workers often invite them to Bahrain but then leave them to work somewhere else in return for a share of their income, often throwing them into financial and legal uncertainty.
Radhi said the LMRA surveyed all companies registered in Bahrain to monitor how active they were and has carried out studies on the causes and scope of the phenomenon. "We didn't know any of this when we started (the reforms) in 2007," he said. - Reuters
More Government & Laws Stories
- Six army officers killed in Egypt attack
- Bahrain-Taiwan bilateral trade hits $345m
- Bahrain 'loses $2.63m over human error'
- UAE summons Iraq envoy over Saudi comments
- Saudi clarifies no pilgrimage ban on Brotherhood
- Bahraini minister evades municipal council quizzing
- Terrorists' identities in Bahrain exposed
- Arab nations called to fight terror in unity
- Bahrain to fast-tract action against terror suspects
- Alwaleed Foundation backs women in politics
- Saudi 'must name and shame corrupt officials'
- Libya's ousted PM Zeidan on way to Europe
- Bahrain set for big eGovernment forum
- Ministries under fire for 'failing to implement projects'
- Bahrain finance minister to be quizzed over irregularities
- 2 policemen hurt in Eker blast
- Libyan parliament sacks PM after tanker escape
- Saudi sets up panel on labour disputes
- Sand-dredging bill is hit by funding row
- Saudi rejects Maliki's charges on funding militants
- Independent foreign policy non-negotiable: Qatar
- Bahrain to crack down on bogus investments
- Bahrain urged to set up national plan to fight cyber crime
- Galfar ex-CEO gets 15 years' jail over bribes
- New law on family violence on the way in Bahrain
- Four blast suspects are remanded in Bahrain
- Bahrain to step up war on terror
- Norton Rose Fulbright moves London head to Dubai
- DSG ‘ready to implement Smart Dubai Strategy’
- Iraqi women protest new draft law