Bahrain should be setting up a fund to support companies hit by the global financial crisis, according to a rights group.

Al Doi Monetary Trade Union Rights Group yesterday agreed with claims that the real impact of the economic crisis would only be felt here by the end of the year.

The organisation, a subsidiary of the Bahrain Human Rights Watch Society (BHRWS), wants the government to bail out firms that are significantly affected by the credit crunch.

It is also calling for a committee to be formed to study the potential impact of the economic crisis, to ensure the country is properly prepared.

'The crisis is reaching us (in the Gulf) now, we will really feel it by the end of this year or beginning of next year,' said BHRWS secretary general Faisal Fulad.

'The government needs to very quickly establish a committee of NGOs (Non-Governmental Organisations), the Bahrain Chamber of Commerce and Industry (BCCI) and the Labour Ministry and let them have a fund from the government.

'The Labour Market Regulatory Authority (LMRA) is making money (from a BD10 monthly tax on expat workers) and where is it going? It's OK it goes to training, but what if there are no jobs?'

Al Doi has now drawn up a report on the economic crisis, its effect on Bahrain and the plight of 59 axed GIB employees.

The report has been forwarded to the International Labour Organisation (ILO), which is holding its 98th annual conference in Geneva today.

This year's conference will tackle the global job crisis and look for an effective response to its growing impact on employment, social protection and the world of work.

Representatives of the General Federation of Bahrain Trade Unions (GFBTU) are attending the event, but Fulad said Al Doi wanted to give its opinion on challenges in the job market here.

'We have sent this report to the ILO and we will now wait and see what feedback we get from the conference,' he said.

Fulad said the report highlighted a lack of protection for the Bahrain workforce against the economic crisis.

'There is no social protection for the worker, there needs to be planning and a strategy for workers,' he said.

'We are not told the impact of the economic crisis on Bahrain and Bahrainis are going to suffer.'

Al Doi's report also accuses the government of failing to protect 59 staff sacked by GIB, saying the Labour Law did not do enough to safeguard Bahraini jobs.

Fulad said there were many steps that should have been taken to reduce GIB's expenses before it even considered sacking staff.

'First, let them (GIB) cut the benefits of the board and VIP cars and they could reduce the salaries of the staff by 20 per cent,' he claimed.

'Many companies have tried these things before letting go of staff members.

'It (cutting staff) is a signal to other banks to make cuts.'

Fulad predicted the GIB job cuts signalled the arrival of the global credit crunch in Bahrain, describing it as the first wave to hit the banking industry and suggesting more job cuts.

Meanwhile, economist Dr Taqi Al Zeera suggested Bahrain had not felt the effects of the crisis because its international business dealings were on a smaller scale compared with other countries.

He added the Islamic banking sector could have also played a role in stemming the tide.

'Many of the financial institutions, including continental banks in the last decade, have gone strongly into Islamic banking and they are very conservative in their transactions and investments,' said Dr Al Zeera.

'The sovereign funds which are the biggest investment vehicles in the Gulf have slowed down their investments in the Western hemisphere.

'But whether the Gulf region has not been hit because they have a reserve or for<