- 1 Hanieh, 2011; Heydemann, 2004; Moore, 2004; Cammet, 2007; Catusse, 2008; Hertog, Luciani, Valéri, 2 (...)
- 2 Duboc, 2011; Allal, 2010; Beinin, 2009.
- 3 Gardner, 2010; Gardner and Watts, 2012; Kamrava and Babar, 2012.
- 4 Herb, 2009.
1If the role of business in the context of economic reform has emerged as an important aspect of social science scholarship on the Middle East in the past ten years,1 much less attention has been paid to labor.2 In the GCC countries, the situation of migrant workers has attracted some attention,3 but a study of national labor had yet to be undertaken. Conventional wisdom tends to portray nationals of these states as a caste of idle and privileged people, living off the direct or indirect transfer of hydrocarbon resources and who as such do not really constitute something akin to “labor”. In what is to date the only attempt at analyzing conflicts over economic issues in Gulf societies, Michael Herb describes a situation of structural conflict between the private sector and citizens mostly working as bureaucrats in an overstaffed and unproductive public sector.4
2This typical political economy of the Gulf States is however being significantly reshaped by a “second generation”5 of labor market nationalization policies. Launched in the 2000s in the context of persistently high unemployment rates, these policies mostly aim at increasing the number of nationals working in the private sector. I argue that these reforms are fostering a pro-labor policy shift that has materialized especially in new labor laws and regulations for the private sector. In this context, national labor is rising as an important social actor in some countries, while organized labor is emerging as a legitimate actor in formal tripartite negotiations over social and labor policies. A trend prior to the “Arab Spring”, this phenomenon has been reinforced amid post-uprising counter-revolutionary measures which aim to address the social grievances expressed during the protests.
- 6 Ibid., p. 8-14.
- 7 This is according to official figures. It should be noted that in all the Gulf monarchies, the priv (...)
3Bahrain and Oman are the two countries where this process is most obvious. Together with Saudi Arabia, they are among the least wealthy GCC states in terms of per capita hydrocarbon resources. They hence face similar fiscal constraints in their attempt to neutralize protest through distributive measures and pressure on the private sector to participate in financing the fight against unemployment. As a result, they have implemented the most market-oriented labor policies6 and have the highest rate of citizens working in the private sector.7 Bahrain and Oman have also seen unemployed youth and low-paid private sector workers mobilize for mass-protests, in particular in 2011. Lastly, despite having very different regime structures and political cultures, Bahrain and Oman have both chosen to empower and support organized labor as a way to foster the nationalization of the workforce in the private sector, and thus to defuse social and political tensions.
4In order to understand how labor issues are dealt with in the two countries, it is essential to understand how they emerged in public debate, as well as the historical and political circumstances, specific to each country, in which organized labor emerged.
- 8 Seccombe and Lawless, 1986.
- 9 Rumaihi, 1976, pp. 214–215; Nakhleh, 1976, p. 78.
- 10 Khalaf, 1985.
5In Bahrain, labor movements developed as part of the mass political mobilization that began in the late 1930s, during early oil industrialization. The first labor movement emerged from the ranks of the workers at the Bahrain Petroleum Company (BAPCO). At this period, labor conflicts mainly crystallized around the status of the company’s Bahraini employees in the context of a workforce stratified along ethno-national lines. Because of the lack of local industrial manpower, the company relied on foreigners to fill the skilled and semi-skilled positions while Bahrainis were mostly confined to blue-collar positions.8 The labor movement’s main demand was the prioritization of Bahrainis for employment in BAPCO and that they be treated on an equal basis with foreigners. During what has remained a key episode of Bahrain’s contemporary history, the 1954–1956 uprising, Bahrain witnessed the creation of its first formal trade union, the Bahrain Labor Federation, which claimed 6,000 members.9 It was then suppressed, as were all attempts at forming unions undertaken in the following years, and during which labor conflicts were numerous.10
- 11 Lawson, 1989, p. 70.
- 12 Ibid.
6The continuous suppression of organized labor, however, was accompanied by noticeable efforts to address labor demands. Hence, BAPCO rather rapidly modified its recruitment policy, shifting to a paternalistic management model that resulted in the stabilization of a Bahraini workforce through intensive professional training, and generous social benefits. The company also set up consultative joint manager-worker committees in its various plants to deal with labor conflicts and stop attempts to form independent unions.11 The rulers, for their part, acceded to certain demands made by BAPCO workers, most notably the drafting of a labor law which was finally passed in 1957 (the Labor Ordinance) and which established some workers’ rights.12 In 1976, the Labor Law for the Private Sector ratified the existence of joint committees and of the General Committee of Bahrain Workers, an appointed body representing Bahrain’s workers in the International Labor Organization (ILO) until 2002.
7In the mid-1970s, the sharp increase of oil prices allowed Bahraini rulers more means to fight back against independent trade unionism by establishing a welfare state funded by oil revenues. Bahrainis were recruited en masse in the burgeoning bureaucracy and in the new companies set up by the state in the late 1960s and early 1970s and which, although operating under the jurisdiction of the Labor Law for the Private Sector, offered working conditions and social benefits closer to those of the public sector. In parallel, the majority of private sector jobs were occupied by an increasing mass of expatriates mostly coming from South Asia. The pattern of labor market segmentation that had developed earlier in the context of BAPCO’s recruitment policy was both accentuated and reoriented. In order to protect them from expatriate competition, Bahrainis were made into a privileged social category of civil servants and public company employees with generally higher wages and better working conditions than expatriates.
8Trade unions were finally authorized in 2002 with the Workers Trade Union Law, which was enacted in the context of political liberalization that followed the arrival of King Hamad b. ‘Īsa Āl Khalīfa to power in 1999. The new sovereign was crowned in a time of political crisis, as the country had been plagued for four years by a series of riots which Bahraini activists still think of as the “intifada”. Eager to restore peace to the streets, the new sovereign decided to accede to key opposition demands. In 2002 he reinstated Parliament which had first been elected in 1973 and then disbanded in 1975. Political exiles and prisoners were pardoned. Dozens of political movements and civil society groups were legalized. The law authorized the creation of one trade union per company, of sector-based unions as well as of the General Federation of Bahrain Trade Unions, a body elected by the members of the country’s trade unions in order to represent Bahraini workers nationally and internationally. After the promulgation of the law, the government enacted regulations that interpreted the law as prohibiting civil servants from forming unions, so that until today all are based in what is officially recognized as the “private sector”. Moreover, all of these are company-based unions and only the General Federation and the sector unions represent unions on a national basis.
9The legalization of the trade unions occurred in a very different political and ideological context than the 1930s–1970s. Although the labor movement emerged first and foremost as a response to the difficult conditions of Bahraini workers in the early oil industry and not as a byproduct of ideological activism, it developed strong links with leftist and Arab nationalist underground movements, most notably the National Liberation Front and the Popular Front for the Liberation of Oman and the Arab Gulf (PFLOAG), which split into an Omani and a Bahraini branch in the mid-1970s.13 As in other Middle Eastern countries, the various avatars of the leftist-Arab nationalist trend witnessed a continuous decline from the 1970s onward. In Bahrain, they were supplanted by Shia Islamic movements as the main opposition force.
- 14 Louër, 2008, p. 104-111 and 126-129.
- 15 In the absence of a census taking into account the different sects of Islam, the consensus has long (...)
- 16 Sectarian discrimination against the Shias for public sector employment is analyzed in Gengler, 201 (...)
10These movements emerged in the late 1960s and early 1970s as the offspring of Iraqi-based movements, al-Da‘wa (the Call) and the Message Movement (al-haraka al-risālīyya), whose local branch came to be known as the Islamic Front for the Liberation of Bahrain.14 They contributed to politicizing the Sunni/Shia divide. This defining divide within Bahraini society had been transcended by the leftist and Arab nationalist movements, which recruited in both sects. As for the Shia Islamic movements, their recruitment was of course exclusively sectarian, as they had developed a language emphasizing the sectarian structure of power, whereby a Sunni dynasty, the Āl Khalīfas, ruled a society where Shias by far outnumbered Sunnis.15 Focusing on identity issues, Shia Islamic movements emerged in a period of plenty when the grievances that had generated the previous major labor conflicts had virtually disappeared. In the 1990s however, the appearance of mass-unemployment led them to articulate their discourse around labor issues. Contrary to the explanatory framework of unemployment and labor problems constructed by leftist and Arab nationalist groups, which focused on the national/expatriate divide, Shia Islamic activists concentrated on the Sunni/Shia divide. They explained that the Shias were the main if not the only victims of unemployment as the result of systematic sectarian discrimination practiced by the regime when hiring civil servants in certain administrations, showing particular resentment at the eviction of Shias from the ranks of the military and police.16 In brief, the Shia Islamic movements merged identity politics and labor politics, viewing unemployment through the prism of identity.
- 17 The most detailed accounts of the 1990s uprising can be found in Fahro, 1997; Lawson, 2004; Peterso (...)
11As a result from the political shift within the opposition, and although leftists still wield some influence among union activists, most of today’s trade union leaders are close to al-Wifāq (the Accord), a movement created in 2001 which brings together Bahrain’s different trends of Shia political Islam, and which is still today the dominant political force in the Shia population. Its general secretary, Sheikh ‘Alī Salmān, is a cleric who built up his career in the 1990s by leading informal groups of young men and women to protest against the country’s deteriorating moral and socio-economic conditions. The sheikh, in particular, used to lead regular demonstrations of unemployed youth in front the Ministry of Labor. His arrest in 1994 sparked a four-year-long uprising.17
12Beside the trade unions, Bahrain had unemployed organizations emanating from unlicensed human rights associations closely linked to the opposition. The Committee of the Unemployed and the Low Paid Citizens was created in 2005 as an emanation of the Bahrain Center for Human Rights (BCHR), a group mostly staffed by religious and secular Shias and recognized by international human rights NGOs as the most trustworthy human rights organization in Bahrain. The Committee became famous for organizing demonstrations that often degenerated into riots in front of the Ministry of Labor and the Civil Service Bureau, the institution that manages manpower in the public bureaucracy. For this reason, its members were specifically targeted by the police and the group shut down by 2008. Another group, the Committee for Unemployed Graduates which is an offspring of the Bahrain Youth Society for Human Rights, took up its activities and modus operandi in 2008. It has virtually ceased to operate in the context of the repression of the 2011 uprising.
- 18 Halliday, 1974, p. 304-395.
13By contrast with Bahrain, labor issues in Oman appear essentially de-ideologized and, until recently, unorganized in terms of civil society movements. This is despite the fact that Oman, like Bahrain, has a history of radical leftist activism. At one point, the Bahraini and Omani regimes were targeted by the same transnational movement, the Popular Front for the Liberation of the Occupied Arab Gulf. The organization was the result of a merger between a separatist movement based in the Omani southern region of Dhofar and the Arab Nationalist Movement created in Beirut by George Ḥabash in the 1950s. The ideologization of what began as a tribal rebellion and the subsequent creation of the PFLOAG was largely due to Dhofaris migrating to richer Arab and Gulf countries (Bahrain, Kuwait, Iraq) to escape economic hardship. Migration led to mingling with other Arab activists, especially with the creation of the neighboring South Yemen Democratic Republic in 1967 further fostering the implantation of leftist ideologies.18
14However, none of this has not left a mark on trade unionism in Oman, a country where no major labor movement ever emerged. Several hypotheses can be put forward to explain this. One is that the country’s industrialization came later than that of the Gulf monarchies which had such movements, namely Bahrain, Kuwait and Saudi Arabia. In those countries, oil was discovered in the 1930s and the oil industry was the place of mobilization from the late 1930s to the late 1960s. In Oman, drilling began in the mid-1950s and oil was discovered in the 1960s so that the emergence of a national industrial workforce and the resulting spread of wage-earning came much later, at a time when leftist ideologies were already declining in the Middle East in favor of Islamic ideas. Moreover, leftist activists tended to be concentrated in the Dhofar, a rural region far away from the oil industrial centers. One should also add that leftist activism was associated with political violence on a scale never experienced in other Gulf monarchies, hence routine activism was more difficult to undertake because of the repression.
- 19 Personal interview with Sa‘ūd al-Jabrī, the ex-general secretary of PDO’s trade-union and the presi (...)
15That being said, the Omani oil industry played a leading role in formal collective negotiations before trade unions were legalized in the 2000s. Indeed, as all national oil companies in the Gulf that started off as British and American private companies, Petroleum Development Oman (PDO) had been highly influenced by Western working standards. It thus authorized the creation of employee committees in the 1970s on the model of the committees in Royal Dutch Shell, PDO’s majority shareholder until 1974. Two committees, one representing the executives and another representing the operatives, engaged in collective negotiations within the company.19
- 20 Valéri, 2007, p. 374-378.
- 21 Valéri, 2008, p. 197-198.
16Further explaining the de-ideologization of labor politics in Oman is the absence of any kind of influential political organization offering a coherent critique of the regime. The disappearance of the leftist revolutionary movement left an ideological vacuum that has not been filled by political Islam, nor identity politics, as the population is fragmented into numerous local, tribal, ethnic and sectarian categories. As in Bahrain, there is sectarian polarization between Muslims of Ibadi and Sunni obedience which is a potential fault line, as shown by the arrest and trial of some thirty persons in 2005 accused of planning to reinstate the Ibadi imamate that had disappeared in 1959.20 Although there are dissenting voices against the established regime, they are not heard within electoral politics as they would be in Bahrain. Elections are held since 2003 for the Consultative Council, an assembly with limited powers where, significantly, no coherent political group has emerged. Electoral politics is very much notable politics, where tribal and ethnic elites generally have the upper hand.21
- 22 Personal interview with Salīm b. Nāṣir al-Haḍramī, director of the Planning and Development Departm (...)
17In this context, the decision to authorize “workers’ committees” in the framework of the 2003 Labor Law then full-fledged trade unions in 2006, as well as the creation of the General Federation of Oman Trade-Unions resulted from a top-down process far removed from the pressures of mass politics that resulted in the legalization of Bahraini organized labor. Oman’s enhanced exposure to international regulations was a key factor behind the evolution of the labor code as far as collective negotiations were concerned. Omani officials mention in particular the signing of the free trade agreement with the United States in 2006, in which a specific chapter on labor insisted that the two countries respect their commitments as members of the ILO.22 In 2010, a memorandum of understanding was signed between Oman, represented by its tripartite constituents (the Minister of Manpower, the Chairman of the Chamber of Commerce and the Chairman of the General Federation of Oman Trade Unions), and the ILO on the implementation of the ILO’s Decent Work Country Program.
18Modeled on the Bahraini system of company-based trade unions, whose members elect the board of a general federation which represents the workers on a national basis in domestic negotiations and international organizations, Omani trade unions are not linked to underground political organizations, nor to informal political trends, their leaders were not previously known for being civil society activists and do not put forward an analysis of labor issues very different from that of the government, which they are careful not to antagonize. Contrary to their Bahraini counterparts, they seldom engage in strikes and favor negotiation over confrontation to advance their demands. More often than not, the trade unions were created not by operatives, but at the management level — including human resource managers — that use trade unions as brokers to communicate with their subordinates and as a means to prevent labor conflicts. Finally, Oman has never had unemployed organizations, nor even informal pressure groups of the type seen in Bahrain and other Arab countries (Morocco, Egypt, Kuwait).
19In order to tackle mass unemployment among nationals and growing discontent within the population, Bahrain and Oman, as other GCC countries, have engaged in labor policy reforms aiming at promoting the employment of nationals in the private sector. In both countries, these reforms have resulted in altering the business-rulers pattern of relations constructed during the 1970s oil boom.
20While there are various regulations prioritizing nationals in employment in every Gulf State since the inception of the oil industry, the rise of unemployment in the 1990s has pushed governments to implement them more actively. The so-called “job nationalization” policies are based on a common assessment of unemployment by Gulf governments. Unemployment is seen as resulting from the presence of numerous expatriate workers and the inability of most nationals to compete with them either in terms of skills or in terms of wage expectations. This situation results from the segmentation of the labor market proper to Gulf monarchies. As shown for Bahrain, segmentation developed as a spontaneous response to the competition between national and expatriate workers that characterized the early oil industry.23
- 24 Le Renard, 2011, p. 171-192.
21In the course of the 1990s however, a number of economic and sociological transformations rendered the segmentation ineffective as a labor policy tool. First, due to a steady population growth which partly reflects ambitious birth-rate policies, the public sector was unable to maintain a level of recruitment in step with newcomers to the labor market. Second, the family model underlying traditional employment policies, based on a single male breadwinner, became irrelevant as women’s social roles and general socio-economic conditions were altered. Many young women do not want to stay at home or, in particular in the less rich countries (Saudi Arabia, Oman, Bahrain) cannot afford to as a single salary is often not enough to ensure a sufficient level of material resources. This has been particularly true since the oil boom of the 2000s and the ensuing high inflation, which drove up real estate prices. For an increasing number of women, work is also viewed as a means of personal fulfillment and is included in strategies for leaving the home space.24
22In this context, the main challenge of the nationalization policies was to increase the rate of nationals working in the private sector which is the main job creator. This in particular means targeting the really private firms, most of them run by merchant families closely connected to ruling dynasties, sometimes even owned by princes. Since the 1970s oil boom, employers have been the main force driving in the GCC states’ migration regime25: employers could bring to the countries as many migrant workers as they wanted and were hence used to resorting to expatriates rather than nationals. Expatriates are indeed usually better trained and cheaper. Moreover, employers can exert more control on them thanks to pro-employer labor laws and the kafāla (or sponsorship) system that enables employers to control the mobility of their expatriate workers. In this context, while more market-oriented measures have been implemented, like the improvement of vocational training for nationals, policy-makers have mostly chosen to resort to coercive measures to push the private sector to hire more nationals. The most controversial of these measures has been the imposition of quotas of nationals tailored to sectors. If the quotas are not met, the companies have to pay fines and have their number of work visas restricted. In short, the more nationals they employ nationals, the more expatriates they can hire. In some cases, some professions are entirely reserved for nationals. In Bahrain and Oman for example, only nationals can be taxi-drivers.
- 26 Ibid.
- 27 Hertog, 2012.
- 28 Foucraut, 2010, p. 31.
23Despite this voluntaristic approach, what S. Hertog calls the “first generation”26 of nationalization policies did not meet its official targets, either due to the lack of proper quota-tailoring or to the attitude of the employers, who have been skillful in getting around quotas.27 To tackle the problem, Bahrain launched in 2006 a new innovative labor policy. The Labor Market Reform drew to a great extent on recommendations outlined in a report the Bahraini government commissioned to McKinsey international consultants and which recommended equalizing the cost of national and expatriate labor by levying a tax on expatriate workers that would be earmarked almost entirely for funding vocational training for nationals. Paid by employers, the fees were supposed to be essentially dissuasive in nature and thus McKinsey recommended that they be set at a fairly high rate: 75 BD (about 190 €) monthly plus 600 BD (1,500 €) every two years when renewing a work contract.28 McKinsey also recommended the abolition of the kafāla system and the elimination of quotas. The idea was to make competition for jobs between national and expatriate workers entirely free in order to raise private sector wage levels. If expatriate workers were given the same prerogatives as nationals to negotiate and terminate their work contract, employing them would lose much of its appeal, all the more as vocational training would meanwhile have borne fruit, closing the qualification gap between national and expatriate workers. Equalizing recruitment and employment conditions between the two categories would make the nationalization quota system obsolete. Last but not least, the consultants recommended the creation of an unemployment insurance.
24Because of the mobilization of private sector lobbies, these recommendations were only partially implemented. The fees were reduced to 10 BD and 200 BD respectively. Rather than totally liberalizing the labor market, the Bahraini government decided in 2009 to loosen the kafāla system by eliminating one of its provisions: the “non-objection certificate,” in other words the authorization that any expatriate has to obtain from his sponsor to change employers or leave the country. Moreover, even if quotas became more flexible, they were not eliminated. The government however succeeded to create an unemployment insurance. It is financed by contributions from employees and employers alike, with each paying 1 % of the employee’s wage. The state contributes an additional 1 %. The unemployed are now entitled to a six month allowance: those who have contributed receive 60 % of their average wage during their last year of employment with a cap of 500 BD (roughly 1000 €); newcomers to the labor market, who have not yet contributed, receive an allowance of 120 BD (240 €) per month for unskilled workers, 150 BD (300 €) for skilled workers. Recipients must enroll in training programs and their allowance is cancelled if they turn down two job offers.
- 29 Hertog, 2014, p. 12.
- 30 Labour Market Authority figures (http://blmi.lmra.bh/2013/09/data/lmr/Table_A.pdf) (accessed 27/02/ (...)
- 31 Labour Market Authority figures (http://blmi.lmra.bh/2013/09/data/mol/Table_14.pdf) (accessed 27/02 (...)
- 32 Gulf News, “Bahrain’s unemployment rate down to 3,7 per cent”, 16 March 2010 (http://gulfnews.com/n (...)
- 33 Foucraut, 2010, p. 14-15.
- 34 Oman Daily Observer, “43,921 Omanis quit private sector”, 17 February 2014 (http://main.omanobserve (...)
- 35 Times of Oman, “More than 88% civil services staff now Omanis”, 24 February 2014 (http://www.timeso (...)
- 36 Gulf News, “Oman’s unemployment rate ‘not worrisome’”, 11 December 2012 (http://gulfnews.com/news/g (...)
25On the eve of the 2011 uprising, the Bahraini experiment was rather positively assessed by observers29 and the Bahraini government was posting very satisfactory figures. 92,528 Bahrainis were working in the private sector at the end of 2010 (as compared to 366,795 expatriates) and 48,111 Bahrainis in the public sector (as compared to 7,912 expatriates).30 The number of registered jobseekers was 1,815 at the end of 200931 and in early 2010 the government announced a 3,8 % unemployment rate.32 These figures should however be treated with caution. First, as mentioned previously, the official category of “private sector” includes public enterprises, so figures on the number of Bahrainis working in the fully private sector are unavailable. Second, the Labor Market Reform has changed the method of counting the unemployed, who are no longer counted in census-taking operations or labor surveys (the latest dating back to 2004) but are now considered to be those registered as such. After six months, people are systematically struck from the list if they have not bothered to re-register — which would appear to be the case for many of them, unaware of the obligation or not seeing the point of doing so.33 For the same reasons, employment figures according to sectors are as difficult to analyze in Oman. Like Bahrain, Oman claims to have more nationals working in the private than in the government sector: 224,698 in the private sector (with 1,520,000 expatriates)34 as compared to 138,315 in the public sector (with 18,073 expatriates) by the end of 2013.35 As for unemployment figures, the government never releases rates but rather gross numbers. In December 2012, it counted 153,326 jobseekers.36 Among foreign observers, the consensus is that the unemployment rate has been stable for many years at around 15 %.
26As mentioned above, the main difficulty encountered by job nationalization policies is the reluctance of private sector employers to hire nationals in place of expatriates. In the eyes of employers across the GCC, the new labor policies have entailed an unacceptable increase of labor cost and a correlated decrease in their profits, endangering what has been one of their primary assets since the 1970s oil boom: unlimited access to cheap and easily controllable expatriate labor.
- 37 Personal interview, Muscat, September 2013.
27Employers overall perceive a general pro-labor policy shift that is threatening to significantly change the rules of the game. Indeed labor laws have been regularly amended in the course of the 2000s. In Oman and Bahrain, they were completely overhauled respectively in 2003 and 2012 with the aim of improving employees’ working conditions and to encourage nationals to apply for private sector jobs. With the legalization of trade unions, employers now face the prospect of having to deal and to bargain with organized labor for the first time, and this in a political context where the government, both through formal legal means and informal pressure, strongly supports labor demands. In the words of an Omani businessman, “the mindset of the government is to defend the poor and the middle class against the rich! It is becoming a socialist country!”.37
28As mentioned previously, in Bahrain in 2008, a significant reduction of the fees on expatriate workers was obtained as compared to what McKinsey had initially recommended. This negotiation occurred in a very specific political context and for which there was no equivalent in Oman. As most economic reforms undertaken since the 2000s and which aim at opening Bahrain to international trade and investment, the Labor Market Reform emanated from a specific faction of the ruling Āl Khalīfa dynasty, aggregated around Crown Prince Salmān b. Hamad. This faction is mainly composed of morally and economically liberal-minded technocrats but is isolated from the mainstream business community. The rise of Prince Salmān was supported by his father the King but at the expense of the King’s uncle, Khalīfa b. Salmān, the regime’s strongman during the reign of the previous ruler (his brother ‘Īsa b. Salmān, who ruled between 1961 and 1999). Holding the position of Prime Minister since 1970, Prince Khalīfa is himself a businessman with networks of patronage within the private sector. For the Prime Minister, the reform was a golden opportunity to emerge as the champion of business interests and to remind reformers he still carried clout. The fee reduction was formally agreed upon between him and the Crown Prince on the premises of the chamber of commerce.
- 38 This was obvious in interviews I conducted in Bahrain in 2010 with both big and small business owne (...)
- 39 These are ‘Aref al-Mulla and Nāḍer Allāwī, personal interview, Bahrain, December 2013.
29Among businessmen who made themselves a name as the main opponents to the Labor Market Reform, the Prime Minister was widely referred to as being the main legitimate authority within the government and the main recourse to get the reform cancelled or at least amended.38 This position, it should be noted, was expressed to me both by big and small businessmen from both the Sunni and the Shia faith in a political context deeply polarized along sectarian lines. As a matter of fact, the Committee of the Employers, an unlicensed body gathering SME employers which aims at fighting the Labor Market Reform and is responsible for numerous anti-reform demonstrations since 2008, is headed by a rather odd duo composed of a typical Sunni salafi wearing a long beard and a short dishdāsha, and a Shia. While the two men have very different opinions about political matters in Bahrain, in particular in terms of sectarian discrimination and state policies toward the opposition, they have similar class interests, which they feel are endangered by the new labor policy.39 This shows that while the sectarian divide sometimes frames the debate on labor policy, this issue is also one that activates class-based interests, cutting across religious identities.
- 40 A point also noted in Hertog, 2013, p. 3.
- 41 Bahrain is already indebted at around 40% of its GDP (Dana El Baltaji, “IMF Says Bahrain’s Growing (...)
- 42 Hibou, 2004; Soliman, 2011.
30Despite amendments made to the Labor Market Reform in Bahrain, the private sector both in Bahrain and in Oman has been unable to obtain a significant shift in attitude towards labor issues on the part of the political leadership. This reflects an entrenched approach to distributing resources among rulers: when they have to arbitrate between the interests of labor and business, they will choose labor.40 Several reasons can be put forward to explain that. First, rulers have more leverage on business, a small milieu dominated by oligarchs who are heavily dependent on the state. By contrast, the great mass of wage earners and job seekers who join actual and potential protest movements are perceived as unpredictable, dangerous classes which need to be accommodated. Second, with fewer per capita hydrocarbon resources than their neighbors and hence a different fiscal situation, Bahrain and Oman do not have the budgetary means to meet all the costs of the welfare state41 thus, in a move witnessed in other Southern states whereby the state hands over some of its traditional responsibilities to private actors42 and use the private sector as a recourse: business is pressured to take its share of the social expenditure burden, by recruiting more nationals but also by paying increasing visa, residence and health care charges for their expatriate employees. Some long-term economic arguments are given by policy-makers to justify this: reducing unemployment contributes to growth and is good for business; recruiting nationals implies rethinking labor management and organization in a way that can lead to enhanced productivity; limiting migration will help prevent significant money outflows to foreign countries. But the dominant legitimation argument is taken from a moral and patriotic register which transpires in most interviews with policy makers, employers and trade unionists: the private sector has to be generous and behave in a patriotic manner, it has to give back to society a share of its wealth. This discourse implicitly supports critics of the private sector which is overly focused on the short-term losses due to the new labor policies.
31At the end of the day, what is at stake in employment policy reform is the overhaul of the rulers-business relations as they were established during the 1970s oil boom. Business was protected from international competition by commercial laws restricting foreign investment, was granted unrestricted access to cheap foreign labor, took its share of the hydrocarbon wealth by contracting with the public sector and, overall, benefited from a laissez-faire approach. Because few nationals joined the private sector and because trade unions were forbidden, employers were spared negotiations with organized labor. In the new context created by mass-unemployment and new fiscal constraints, business is facing an increasingly regulated environment where its room for maneuver is being reduced. Small and medium-sized businesses suffer the most from the increased cost of labor. Better equipped to face these rising costs, large firms have to negotiate with organized labor, as trade unions are being formed, even in the family-controlled conglomerates where management is traditionally characterized by authoritarianism, informality and privacy. It should be noted that in Bahrain, some company trade unions operating in the construction sector are mostly staffed by South Asian expatriates who, although they cannot head trade unions, can and do actually join them.
32The “Arab Spring” unfolded in Bahrain and Oman in this context of shifting balance between state, business and labor. Despite a relative weakening of trade unionism in Bahrain, in both countries the pro-labor orientation has been confirmed and even strengthened since the protests.
- 43 Valéri, 2007, p. 66-72.
- 44 Valéri, 2013, p. 30.
33Of all the GCC countries, Oman is probably the country where the private sector has been the most directly involved in economic policy-making. This is the direct result of the structure of power itself. Faced with restive Arab tribes of the interior, the ruling family of Āl Bū Sa‘īd owes its power in part to an alliance with merchant families from peripheral social categories and ethno-sectarian minorities, mostly established in Muscat and the coastline.43 Because Sultan Qābūs b. Sayyid Āl Bū Sa‘īd (ruler of Oman since 1970) has never trust his family, his reign has witnessed the inclusion of members of the merchant oligarchy into positions of power within the government and the bureaucracy where, compared to Bahrain, members from the ruling family are under-represented. In such a situation where business oligarchs have significant policy leverage, workforce nationalization has been much less sustained than in Bahrain. Hence in 2005–2006, the Omani government launched a policy of economic liberalization that gave priority to developing the national and foreign private sectors, and entailed less pressure to nationalize employments.44
- 45 See the article by Marc Valéri in this issue.
34Coupled with the absence of an organized opposition, this particular context helps explain why Arab Spring protests in Oman were mainly expressed in terms of social grievances, especially against the considerable influence of business interests on social and economic policy-making. Unemployed youth and low-skilled private sector wage earners in the newly industrialized city of Ṣūḥār and its vicinity played a critical role. Gathered on one of the main roundabouts of Ṣūḥār, protesters demanded that labor problems be addressed, notably unemployment and low wages, and also stigmatized having to pull strings (wasta) in public sector recruitment. They were also especially critical of the economic ministers belonging to the business oligarchy, most notably Ahmad Makkī, the Minister of National Economy, and Maqbūl al-Ṣultān, the Minister for Commerce and Industry.45
- 46 Personal interview with Salīm b. Nāṣir al-Haḍramī, director of the Planning and Development Departm (...)
35It is significant that in such an unprecedented situation, the reaction of the regime was to reinforce their pro-labor policy orientation as part of an increase of welfare state allowances. The minimum wage for nationals working in the private sector was increased from 140 OMR to 200 OMR as soon as February 2011, and again to 325 OMR a year later. Two days off a week were also granted to private sector workers (prior to that, they had only had one). A monthly allowance of 150 OMR was granted to 50,000 unemployed who made themselves known during the protest. Contrary to Bahrain, the government finally decided not to set up a full-fledged unemployment insurance, considering that there were enough jobs for nationals willing to work and that, in this case, such a system would encourage voluntary unemployment.46 The allowance turned out to be only a one off. The creation of 50,000 new jobs in the public sector was also announced. Finally, the Sultan decided to dismiss twelve ministers, including the aforementioned Ahmed Makkī and Maqbūl al-Sultān, the long-serving ministers from the ranks of the business oligarchy. The Ministry of National Economy was abolished. Not to mention the generous housing and student allowances, among others.
- 47 The information in this paragraph was gathered from several personal interviews with trade unionist (...)
36Strikes in the private and semi-private sectors were a conspicuous feature of protests in Oman. Contrary to what happened in Bahrain however, where the General Federation of Bahrain Trade-Unions launched a general strike during the uprising, Oman had wildcat strikes undertaken by people not affiliated to any trade union. In some cases, these actions included contesting the legitimacy of the official unions and led to a reshuffle of union leadership. This was the case at the national oil company PDO, where demands mainly pertaining to “omanization” and retirement conditions for Omani employees were articulated by representatives designated during an assembly of Omani employees who, at the end, decided to reshuffle trade union leadership whom they saw as ineffective.47
- 48 Personal interviews with trade unionists and employers, Muscat, October and November 2013.
37The absence of the Omani trade unions as actors of the 2011 protests reflects their specific positioning as compared with their Bahraini counterparts. Omani unions clearly do not position themselves as a political opposition and avoid showdowns with the government. This attitude allowed them to benefit from a substantial upgrade in the aftermath of the protests. Indeed, whatever leverage Omani unions have, they owe it more to state support than to their membership, thus during the strikes the unions were often considered by the government and management as the employees’ legitimate representatives, and were required to supervise negotiations and sign the agreements.48 They more generally were expected to moderate the demands and the modus operandi of the strikers, a role of arbiter and broker they accepted as a way to show that they were not a destabilizing but rather a stabilizing actor at times of crisis. As a result, the number of trade unions has rapidly increased since 2011, reaching 169 in early 2013 according to figures from the 2012 annual report of the General Federation of Omani Trade Unions. The General Federation itself has been associated to all nation-wide negotiations pertaining to labor issues that have occurred since, most notably amendments to the 2003 Labor Law, in particular getting two days off per week, a 3% mandatory annual wage increase and a modification of the retirement scheme which makes retirement conditions in the private sector now very close to those of the public sector.
- 49 Personal interview, Muscat, November 2013.
- 50 A dozen.
38The Arab Spring has hence fostered a clear empowerment of organized labor, a recent social actor created through a top-down process and that had not proven itself until then. This actor owes its rise to strong government support. To put it in the words of one trade unionist: “the private sector had long been the government’s favorite, now it’s the era of the workers”.49 This new context is well reflected in the very positive mindset of most of the Omanis working in the private sector that I interviewed in the fall of 2013.50 They hold the conviction that they are supported by the government and that hard work can be quickly rewarded. As a matter of fact, the pro-labor policy shift has generated obvious dynamics in the labor market. While many young Omanis still face difficulties stabilizing their jobs in the private sector, those who have done so tend to become much sought-after by employers anxious to fulfill their omanization quotas. Hence these employees are in a position where they can negotiate their work contract, a situation that is rather atypical in contexts of persisting high unemployment rates.
39The “Arab Spring” spread to Bahrain in a political context marked by an alliance between the reformist faction of the ruling dynasty, headed by Crown Prince Salmān, and the mainstream opposition, embodied by al-Wifāq. When parliamentary life was restored in 2002, al-Wifāq decided to boycott the elections to protest the decision by the King to unilaterally promulgate a new constitution according to which parliament was deprived of many of its powers. In 2006 however, the movement decided to participate in the ballot. Its officials acknowledge that the ascent of the Crown Prince was instrumental in fostering this decision. Al-Wifāq leadership saw the young prince as able to outdo the older conservative factions, in particular the group aggregated around the Prime Minister. This decision cost al-Wifāq its unity as major figures defected to form a new political organization, al-Ḥaqq (the Right), which continued to boycott the elections.
- 51 The experts on economic issues are mainly ‘Abd al-Jalīl Khalīl, an engineer also trained in busines (...)
40It is in this particular context that the Labor Market Reform was launched and implemented. Faced with the resistance of the private sector and the conservative factions, the Crown Prince benefited from the support of al-Wifāq, which openly endorsed the reform and, in particular, voted for it in Parliament. This positioning resulted both from al-Wifāq’s consent to offer support for the dynasty’s reformists as well as from the movement’s own diagnosis of the unemployment problem. While continuing to protest against discrimination against Shias for employment in the public sector, the movement’s officials specialized in economic issues51 globally endorsed the technical diagnosis put forward by McKinsey and strongly supported the idea to impose fees on expatriate workers as well as the creation of a contribution-based unemployment scheme. Support continued even when Sheikh ‘Īsa Qāsim, the country’s most influential Shia cleric, with significant influence on al-Wifāq, publicly said that he disagreed with the principle of the unemployment contribution, seeing it as going against Islamic law which accepts only taxation on wealth and not on wages. Within the opposition, criticism of the Labor Market Reform mainly came from al-Ḥaqq and the boycotting societies, which maintained that unemployment mainly resulted from sectarian discrimination and, overall, saw the regime as a single bloc with only minor differences between its different factions.
- 52 For a detailed analysis of this period, see Louër, 2014, p. 172-198.
41When a handful of demonstrators mostly unaffiliated with formal organizations staged the uprising’s first demonstration on 14 February 2011, al-Wifāq was caught between its will to avoid any showdown with the regime in order to maintain its alliance with the reformist faction, and the need to take action to protest against the death of several demonstrators at the hands of the police. When the Crown Prince initiated a formal negotiation with the protestors, al-Wifāq came to believe that it could obtain more reforms by participating in the uprising than by staying on the outside. However, it joined the movement reluctantly and just as reluctantly withdrew from Parliament in protest against the repression. In mid-March, the final decision of the regime’s conservative factions to stop the negotiations and call upon the troops of the Gulf Cooperation Council to put an end to the uprising hurt al-Wifāq’s strategy of alliance with the regime’s reformists. The latter were indeed weakened to the benefit of conservative and radical factions. If the repression left al-Wifāq relatively intact as compared to other opposition societies, the leaders of which were sometimes sentenced to life imprisonment, the structure of political opportunities became much less favorable for the movement.52
- 53 The most detailed account of the Bahraini uprising is to be found in the report by International Cr (...)
- 54 Tariq Al Hasan, 2012.
42Contrary to what happened in Oman where labor issues figured highly on the protestors’ list of grievances, Bahraini protestors mainly articulated political demands, with protestors divided into a reformist camp, headed by al-Wifāq and demanding the establishment of a genuine constitutional monarchy, and a radical camp, embodied by al-Ḥaqq and other boycotting societies, expecting no less than a full-fledged regime change leading to the establishment of a republic.53 Labor issues came back to the forefront of the debate after the uprising in the context of an escalation of intra-regime conflicts. To consolidate their power base and to weaken the opposition, the conservative factions, who felt bitter about the role organized labor played during the uprising, strove to consolidate their relations with business, notably by attempting to dismantle the Labor Market Reform and to divide the trade union movement.54
- 55 There are three tripartite institutions: the Labor Market Regulation Authority, Tamkin (“Reinforcem (...)
43As soon as April 2011, the government announced that the monthly 10BD fees on expatriate workers would be frozen, hence giving in to business demands. It then amended the Workers Trade Union Law, introducing provisions allowing for what it called “trade union pluralism”. The move built on old demands by trade unionists close to Sunni Islamist and Marxist societies who complained that unions were in the hands of al-Wifāq and its allies. It also specifically targeted the General Federation of Bahrain Trade-Unions which had initiated a general strike during the uprising. Hence amendments to the law authorized the formation of more than one union per company and the creation of more than one federation. The law left to the appreciation of the Minister of Labor the decision about which federation would represent labor in national tripartite institutions55 and in the international organizations. Unions split in a number of big public companies and, in 2011, several trade unions left the General Federation of Bahrain Trade Unions to set up the Bahrain Labor Union Free Federation. In the context of heightened sectarian polarization, the split occurred on a political and religious basis, with most Shia trade unionist remaining in the General Federation while Sunnis joined the Free Federation, dominated by a coalition of Muslim Brothers and Marxists.
44However, if steps were definitely taken to please business and to weaken organized labor, the post-uprising situation should not be analyzed as an unequivocal pro-business shift, as labor issues, although embedded into the intricacies of Bahraini politics, are also influenced by broader and deeply entrenched non-partisan, non-sectarian political dynamics. Hence, the promulgation of a new Labor Law for the Private Sector in August 2012, which replaced the old 1976 text, can be read as an attempt at balancing business and labor. If the right to strike is more regulated, if it is easier to layoff workers and if nationals and Arabs are not anymore officially prioritized for employment, workers also have higher benefits for layoff, sick leave, maternity leave and holidays, and a minimum wage of 250BD for nationals working in the private sector has been set up. In 2011, the regulation regarding the kafāla’s non objection certificate was amended: expatriates must now wait at least a year before moving on to another employer. This move is no doubt to accommodate business. In September 2013 however, another move went against their wish when the monthly 10 BD fee on expatriate workers was reinstated though adapted: in order to alleviate the discontent of SMEs, the smaller firms which have up to five expatriate workers now only pay 5BD.
- 56 In GCC countries, wages are made up of basic salary and allowances, which vary according to family (...)
- 57 Personal interview with Ya‘qūb Yūsuf Muḥammad, head of the Bahrain Labor Union Free Federation, Bah (...)
- 58 See the account of the debate in the Bahraini daily Akhbar al-Khalij, « Strong Agreement among MPs (...)
45Besides, the post-uprising period has seen the development of conflicts over labor policy tools between the government and supposedly pro-regime institutions and organizations. These have emerged as part of the counter-revolutionary measures and are far from favoring a pro-business shift. This is first and foremost the case of the parliament as it emerged from the September 2011 by-elections held to replace resigning al-Wifāq MPs and which al-Wifāq boycotted. The new assembly focused on distributive measures contradicting government and/or business approach. The most telling example is the conflict of January 2014 that occurred after the parliament voted a bill entitled Improvement of the Situation of Private Sector Workers which actually consisted in subsidizing low wages: a fund financed by the government was to be created to supplement the wages of those earning less than 300 BD (the minimum wage was set at 250 BD). The Free Federation supported the bill, as instituting a basic minimum wage at 300 BD — 400 BD with the allowances56 — by a way or another is one of its declared priorities.57 The debate in Parliament was heated, with the Minister of Labor and the Minister of Finance expressing their disapproval of a measure which they argued would not only be a burden on state finances but would also encourage businessmen to maintain low wages. Stigmatizing the project as “charity”, they defended the more market-oriented measures adopted by the government to foster higher wages for nationals, notably the improvement of professional training.58 The bill has few chances of being approved by the Consultative Council, the assembly appointed by the King and which has the power to veto all parliament bills. Dominated by businessmen and technocrats, it is usually deeply against this type of distributive measure. Nevertheless, the episode shows that labor policy is the object of fierce disagreements among actors usually categorized by observers as belonging to the single category of “pro-government” people.
46It is significant that, despite variations due to important institutional, political and historical differences, Bahrain and Oman are heading in the same general direction of empowering organized labor as a way to generate support for labor policy reforms and to pressure business to comply with the nationalization of employments agenda.
- 59 I am indebted to Steffen Hertog for this idea, which he presented to me after making very careful a (...)
47These types of policy choices have the potential to deeply alter the social pact typical of rentier states and on which a great part of the regimes’ legitimacy rests. Asking the private sector to participate in financing labor policy through fees actually results in policies that are more re-distributive, as opposed to the classic distributive measures whereby the state distributes resources it has not previously extracted from society because they accrue directly from the oil rent.59 In Bahrain, labor policy debates have already aroused disputes about the management and spending of public money. Moreover, the pro-labor policy shift, if confirmed, could change the internal structure of business, pushing it to act in a more concerted way than it currently does to confront the rise of organized labor and the establishment of tripartite negotiation mechanisms. Tripartite mechanisms, at the end, means that the political economy is becoming more bargained.
- 60 Discussions with officials from the Saudi Ministry of Labor in the framework of a workshop on labor (...)
48Is this shift specific to Bahrain and Oman or is it also observable in other GCC countries? Labor market nationalization policies have been hastened everywhere in the Gulf in the 2000s, with a clear push after 2011. In all countries, the result is an increase in labor costs, an overall pressure on the private sector and a pro-labor policy shift. What is more specific to Bahrain and Oman is the rise of organized labor, something not seen elsewhere. Kuwait has had strong trade unions since the 1960s but, because they mostly operate in the public sector, they do not take part in policy bargaining the way Bahraini and Omani unions are. This could change however if Kuwaitization were accelerated so as to give birth to a critical mass of Kuwaiti wage earners in the private sector. In the aftermath of the 2011 protests, Saudi Arabia has overhauled its labor and migration policies in order to better tackle unemployment. It has yet to embrace the idea of trade unions but, significantly, since 2005 it has authorized the creation of employee committees in some large public enterprises (which operate under the private sector law) and it established in 2011 an annual tripartite Forum of Social Dialogue where government, labor and business can discuss labor issues. Officials of the Ministry of Labor clearly state that it is part of the ministry’s policy to create a more balanced equilibrium between labor and business by reinforcing the worker committees.60 This move shows that the concept of a more negotiated economic order is also making its way among Saudi policy-makers.