US embassy cable - 04MANAMA1390

C O N F I D E N T I A L MANAMA 001390 
 
SIPDIS 
 
STATE FOR NEA/ARPI 
 
E.O. 12958: DECL: 09/07/2014 
TAGS: PGOV, PREL, ELAB, ECON, BA 
SUBJECT: CROWN PRINCE DISCUSSES PLANNED LABOR REFORM 
INITIATIVE 
 
 
Classified by Ambassador William T. Monroe for reasons 1.4 
(b) and (d). 
 
1.  (C) During the Ambassador's September 5 introductory call 
on Crown Prince Salman bin Hamad Al Khalifa (septel), the CP 
said that his office was organizing a national debate on 
labor law reforms.  The initiative stems from Bahrain's 
desire to move away from an economy based upon a low cost 
labor model to a high skills, and later an information 
management-based economy, along the lines of Singapore. 
 
2.  (C) The CP said that the expected reforms would be huge 
and controversial.  Currently, a foreign worker received a 
work permit tied to a specific employer, and the worker has 
no legal status outside of his/her employment.  This has led 
to low wages and difficult working conditions.  Additionally, 
employers would rather hire a foreigner than a Bahraini, who 
would demand better pay and conditions. 
 
3.  (C) The CP said that the reforms would remove the link 
between the foreign worker and a single employer and he/she 
would have the right to seek any employment in the country as 
long as either the worker or his/her employer pays a monthly 
fee of $250 to keep the work permit valid.  Thus the 
differential between the cost of a foreign worker and a 
Bahraini worker would decrease and employers would have an 
incentive to invest in the skills of their employees through 
training to boost retention.  The CP argued that the market 
would control the demand for foreign labor rather than a 
regulation from the government in the form of a mandatory 
"Bahrainization" campaign.  He noted that the new rules would 
apply to household help - maids, nannies, housekeepers - as 
well as other types of workers. 
 
4.  (C) The Crown Prince explained that the national debate 
would be launched on September 23 and would continue through 
Ramadan, which ends in mid-November.  At the end of November, 
there will be a concluding conference with the participation 
of politicians, political societies, ministers, labor 
representatives, and international experts.  The conference 
will produce a draft labor law that will be reviewed by the 
Cabinet and forwarded to the parliament.  He noted that his 
office will guide this process from behind the scenes, but 
the Economic Development Board will be the public face.  He 
hoped that future Bahraini success in the labor field could 
serve as a model for other regional countries, such as Saudi 
Arabia, which also host large communities of foreign workers. 
 
MONROE