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Thu 30 Jul 2009 07:16 AM

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Bahrain most business friendly despite fee - official

Economic chief hits back at critics after introduction of expat worker fee.

Bahrain most business friendly despite fee - official
BUSINESS CITY: Manama is one of the most business friendly cities in the Gulf, according to a top official. (Getty Images)

Bahrain remains the most affordable GCC country for business despite the introduction of a BD10 ($26.50) fee for each expat worker a company employs, a leading official has said.

Kamal Ahmed, the chief operating officer of the Bahrain Economic Development Board, hit back at critics of the new system, saying that the cost of doing business in the island kingdom remains significantly lower than in other Gulf states.

“We are still very competitive when it comes to price. The cost of doing business in Bahrain, I can confidently say, is cheaper than in all the other countries in the region. To recruit people, to hire a residential apartment…is still very competitive in Bahrain,” he said.

Unemployment in Bahrain currently stands at around four percent, making it impossible to maintain growth without using imported labour, he added.

Nearly 100 business owners plan to halt production one morning next week in protest over the Labour Market Regulatory Authority's (LMRA) fee for expatriate workers.

Other countries in the region are imposing similar fees on businesses but without returning the proceeds to the private sector, Ahmed said.

“They are using it for government projects. In our case, we use this money and we pump it back to the private sector by training their employees.”

The country’s labour fund, Tamkeen, spent BD75m ($199m) in 2008 on training Bahraini employees and improving productivity in the private sector.

The fund wants to make Bahrainis the employees of choice for private companies, many of which are heavily reliant on cheap expat labour.

Bahrain’s expatriate workforce, which makes up around 50 percent of its population, remains a contentious issue in the country, where high unemployment and perceived discrimination against some communities has sparked riots in the past.

Kamal said that the protests should be seen as proof that Bahraini society is freer and more open than other countries in the region.

“These things happen in Western countries on a daily basis but nobody is talking about it. But because in this part of the world it is [unusual], people make an issue out of it,” he said.

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