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Knowledgebase : English > General Questions about Labour Market Reform Project
The use of policies to rigorously manage the use of foreign labour is
widespread in both the developing and developed world. Singapore,
Indonesia, Malyasia, Hong Kong, Japan, most of Europe, and North
America, to name a few, have some sort of fee and/o...
The proposed labour policy will have implications on small companies'
cost structures. In Bahrain, SME's rely heavily on cheap expat labour.
In fact, the overall Bahrainisation level for companies with less than
10 employees is less than 2%.
The imp...
Operating costs of the construction industry will increase by 14% as
a result of the proposed labour reforms, much of which can be
recovered through improving productivity and passing on some of the
higher costs to consumers through price increases.
A...
Equalizing costs between expats and Bahrainis through the use of
labour fees and other policy levers will allow Bahrainis to compete
with expats on a level-playing field. As long as Bahrainis are able to
demonstrate the required work ethic, good attitu...
Bahrain is undergoing an integrated reform program that will cover
labour, economic policy and education and training. Each segment's
vision and policies will be evaluated and then a structured
implementation plan will be defined and executed.
Althoug...
Companies relying heavily on low cost expat labour will be the most
affected by the proposed reform policy. Currently, this segment only
accounts for 10% of foreign direct investment flows into Bahrain and
is composed of companies mostly from the texti...
The data underlying the recommendations are a result of an extensive
process of review and corrections. The data have been scrutinized by
the relevant ministries and government officials, who have agreed that
these are the best available numbers for th...
Potential for leakage is substantial
The overall principle of the reform is to apply the policies as
consistently and uniformly as possible to limit the opportunities for
abuse of the system. That is why the proposed policies will apply
equally acros...
The benefits of applying labour fees differentially across industry
sectors or expat skill-levels are far outweighed by the costs of
administering and enforcing such a segmented system. The current
Bahrainisation regime, for instance, has differential ...
The impact assessment describes the cost impact on different industry
segments on average. Individual companies may be impacted more or less
severely depending on three factors:
* Labour intensity of the business (i.e. the portion of total costs
co...
A minimum wage would be very costly for Bahrain, and would be
ineffective in reducing unemployment among low-skill Bahrainis.
* If Bahrain were to enforce a standard minimum wage across both
Bahrainis and expats, 80% of the proceeds of the wage in...
The money raised through the proposed labour fees will be collected
into a labour fund to be used for specific purposes, including
supporting Bahrainis in securing private sector employment and
investing in the private sector to assist in the adjusting...
A great deal of time is being invested in identifying how government
processes need to be changed and improved to ensure that
implementation will occur. The proposed implementation approach puts
aside all of 2005 to prepare the government to administer...
Clients E-support Center - Labour Market Regulatory Authority