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Sun 19 Jul 2009 04:00 AM

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The Reformer

Dr Majeed Al Alawi is Bahrain's Minister of Labour tells Arabian Business why his critics won't win the war on labour reform.

The Reformer
The Reformer
Al Alawi’s initiatives have lowered the unemployment in Bahrain from more than 15 percent to less than five in the last 16 months alone.
The Reformer
Bahrain’s business community, political societies, religious bodies and lawmakers have often lobbied hard against Al Alawi’s reforms.
The Reformer
Al Alawi’s reforms mean Bahrain will become the first Gulf nation to scrap its existing sponsorship system for foreign workers, in a bid to conform more closely to international labour standards.
The Reformer
Al Alawi’s reforms mean Bahrain will become the first Gulf nation to scrap its existing sponsorship system for foreign workers, in a bid to conform more closely to international labour standards.
The Reformer

Dr Majeed Al Alawi is Bahrain's Minister of Labour, and one of the Gulf's most controversial figures. He tells Arabian Business why the sponsorship system is on its way out, why the expat invasion is ruining the region, and why his critics won't win the war on labour reform.

I'm not racist," insists Dr Majeed al Alawi, emphasising each word with a shake of his fist. "But I was in the gold souk with my wife two days ago; the buyers and sellers weren't Bahraini, they were Asians. We were the only Bahrainis.

"Expatriates are our guests and they are working and we have to give them their human rights and their contractual rights," he continues. "But at the same time there is a subject bigger than me: I want to protect my nation."

Al Alawi's national pride was forged in the most testing of circumstances; for many years, he was unable to even set foot on Bahraini soil. Now the Minister for Labour and Social Affairs, he spent the 1990s in London as one of the exiled leaders of the Bahrain Freedom Movement, a Bahraini Islamist opposition group.

Only in 2002 after landmark legislative elections on the island, did Al Alawi, a member of Bahrain's Shia majority, return to the country of his birth. It was at the personal request of King Hamad, who asked Al Alawi to take a leading role in the drive for reform and democratisation in Bahrain; and it is a challenge Al Alawi has since tackled with indefatigable fervour.

In the last 16 months alone, unemployment has dropped from more than 15 percent to less than five, while the minister has overseen a comprehensive overhaul of the state's labour market, rewriting the rulebook on benefits, insurance, human rights, trade unionism, training, and on freedom of movement.

The landmark reforms have won rich praise from international groups including Human Rights Watch and the International Labour Organisation at the UN. In the Gulf, however, the minister appears to have made at least as many enemies as friends. The business community in Bahrain and the wider Gulf has lobbied furiously against reforms it argues would impact on companies' competitiveness. Religious scholars have attacked some of his proposals as ‘haram'. And each piece of legislation Al Alawi puts forward is met with ever louder cries of dissent in parliament.

"On the one hand I am accused of being anti-expatriates, but I'm also accused of being pro-expatriates and against Bahrainis," says Al Alawi, a note of exasperation creeping into his voice.

"But it is a free country and if someone wants to strike or demand the resignation of a minister, they can do it," he adds. "I don't feel under pressure and I don't feel embattled, because I have great support from the leadership here, from the King and the Crown Prince, and the cabinet."

That support has ensured that August 1 will mark a watershed moment for Al Alawi, for Bahrain, and for the entire Gulf. On that date, the island state will become the first Gulf nation to scrap its existing sponsorship system for foreign workers, in the hope of conforming more closely to international labour standards. Under the new regulations, foreign workers will be directly sponsored by the Labour Market Regulatory Authority, of which Al Alawi is also chairman, and therefore able to move jobs without the consent of their previous employer.

"All ministers of labour in the Gulf believe in what I am saying," asserts Al Alawi. "I think there is huge lobbying from the private sector preventing them from going ahead, but you mark my words, in the next five years, most of them will do exactly what we are doing now. Kuwait, Qatar and the UAE will be the first to jump."

Business leaders have indeed been vociferous in their criticism, while the Bahrain Chamber of Commerce and Industry has spearheaded a campaign to delay the legislation. Lawmakers and political societies have accused Al Alawi of overlooking the interests of employers and eroding the stability of the national economy, while MPs have voted to postpone its implementation until 2010. Nevertheless, the switch will go ahead as scheduled, and Al Alawi is steadfast in his defence.

"I have been accused of putting the economy at risk," counters the minister. "How is that? There is a similar system in Europe. Has that made growth difficult?

"They are ridiculous claims, and they are making them because people don't want change," he continues. "They have power and they don't want to relinquish it - if I have power over your passport, I have power over you."

Al Alawi argues that firms will be forced to improve working environments and boost salaries in order to prevent expatriate staff being poached by their rivals. Productivity should rise as a result, and as the labour minister points out, there's nothing to prevent a firm inserting clauses into a worker's contract to ensure he or she is not able to join a competitor immediately after leaving the company.

"We don't want to harm businesses, but at the same time we don't want to continue the practices of the 17th century," he insists. "The sponsorship system has no legal basis. There is no law called ‘sponsorship'; it does not exist.

"It just became practice in the mid seventies during the first oil boom when companies said [to employees] ‘if you're working with me then I will take your passport and you will work as a near slave'. We cannot allow that; we cannot allow that kind of master-slave relationship."

Equally contentious was the introduction of unemployment benefit in 2007. The scheme provides a net for both Bahrainis and expatriates, and is financed by a three percent contribution on wages, split between employers, workers and the government.

"In any human society people who work should help people who don't work," Al Alawi suggests. "The strong should help the weak. The big should help the small. The more a society looks after the weakest part of itself, the more it is civilised, I think."Not all agreed that the unemployment benefit scheme was necessarily the best way to address Bahrain's societal inequalities, while some religious scholars objected on theological grounds.

"There was a protest by some Islamic scholars, and I lashed out at them," recalls Al Alawi, a slight smile creasing his lips. "I told them we don't run Bahrain by fatwas; we have a parliament, and we have a constitution. I lash out often, and I enjoy it. I've lost sometimes, but that just encourages me to go after another one."

Al Alawi may not have to look far for his next scrap, and again it will revolve around the issues of mass migration into the Gulf, the viability of importing labour, and the demographic change that will bring.

"There are huge ghettos in the Gulf, where 85 percent of the population are expatriates, and there is no other region in the world today where that is the case," he notes. "Do we want an Indian MP? That is a real danger. Think of the Caribbean, where you had the white Europeans who brought African slaves. Now who runs the Caribbean?"

Al Alawi does concede that Bahrain could not continue to function were expatriates expelled altogether. He is, however, concerned that the Gulf is becoming ever more dependent on cheap labour, at the expense of its own identity.

"All ministers of labour in the Gulf states believe that this mass migration, without any control, may one day ruin the culture of the region," he insists. "It won't be an Arabic area any more, especially if [expatriates] begin to get their civil and political rights.

"[Bahrain is] seriously under threat, and even more so in countries like the UAE, Qatar and Kuwait, where they have more than 80 percent expatriates. It's about 50 percent here, but we're on the way - it used to be 30 percent."

Al Alawi's response is one that has proved as divisive as it is decisive.

The minister has called for the introduction of a residency cap for expatriates, limiting semi or unskilled workers to a maximum five-year stay in any one Gulf state. He is confident, moreover, that the cap will be passed into law at next year's GCC summit in Bahrain, claiming that "all the governments are agreed".

"That road we cannot go alone; we have to have the rest of the Gulf with us, or our companies will be very much disadvantaged," he says.

The proposal does not apply to skilled expatriates such as teachers, lawyers, and doctors. But if it is ratified by Gulf leaders at the Manama talks, then Al Alawi sees no reason it cannot be implemented immediately across the six member states: another tool with which to close the "productivity gap" he argues exists in the region.

"We rely heavily on a labour intensive way of running our businesses," he says. "For example, if you want to dig up the road, you have one mechanical digger and you have a hundred Indians or Pakistanis working there. We want to have five diggers, and ten people working on it with good salaries.

"People have called me a radical. I am a moderniser, a reformer, not a radical," he adds calmly. "There is an aggressive side to me - a confrontational one - but there is also a conciliatory side. I am firm but fair. I will never shout. But if the situation requires me to stand up, I stand up."

Israel and IranMajeed Al Alawi tells Arabian Business why the Israeli settlement in Palestine is a concern, why the West must ignore Iran and why the Gulf must help Iraq.

Al Alawi spoke to Arabian Business just days after returning from Washington, where he had been part of a team led by Crown Prince HH Shaikh Salman. In the US capital, the Bahraini delegation held meetings with US president Barack Obama, vice president Joe Biden, secretary of state Hillary Clinton, and others.

"Israel is still the biggest threat to stability in the region," argues Al Alawi. "The Israeli settlement in Palestine is about 9.3 percent of the West Bank. If that continues, we will not have a viable Palestinian state, and if that crisis continues, we will never have peace in the region."

Naturally, talk in Washington soon turned to Iran. Obama has said global leaders are "deeply troubled" by Iran's nuclear programme, while Tehran denies it is trying to build a nuclear bomb. In recent weeks, the Islamic state has also made headlines the world over in the wake of the disputed general election, and resultant street protests.

"The West should not interfere in Iran's affairs, because you just give them an excuse to blame others for the problems," cautions Al Alawi. "On the nuclear programme, Iran is entitled to have a nuclear programme for civil use, and I think it should be left to the International Atomic Energy Agency (IAEA) to deal with it.

"If Israel attacks Iran, it would have a disastrous effect," he continues. "Iran would make huge trouble for the West in Afghanistan, Pakistan, Iraq, Lebanon, Palestine, the Gulf, everywhere. They can do that. And any retaliation against Israel would leave us in the middle, with two giants sending missiles over our heads."

Al Alawi also argues that the Arab states should do more to support Iraq, in order to ensure future stability in the region.

The American troops may be pulling out, but the vacuum left by their departure must not be filled by Iran.

"I think Arab countries should do more to get closer to Iraq if they don't want the Iranian influence to increase," says Al Alawi. "The West and the Arab countries should help to make sure the Iraqi government is representative of the Iraqi people. Otherwise, all the sacrifices the West has made will have been in vain.

"I was encouraged by Mr Obama, Mr Biden and secretary Clinton," he adds. "Of course they have issues, and pressures within America against putting pressure on Israel. And they need the Israeli public to support them too. There's a lot of work to be done, both by them and by the Arab world. But I don't think there's a military rhetoric there [on Iran]."

Arabian Business: why we're going behind a paywall

Tara Rogers 11 years ago

Dr Al Alawi's labour policy is enlightened. The sponsorship law is an outdated concept and allowing employers to not only hold an employee's passport but also to ban them from joining another company, thereby denying them the right to earn a living, is a violation of human rights. Even more appalling, in the UAE, is that this law is enforced by company owners who are Western, who have grown up in first world democratic environments. To believe that one has the power to dictate whether or not an employee may leave one's company is akin to slavery. Far better for companies to focus on being better employers, and ensuring that employees are happy, motivated and secure members of a team!