GRM 2010 GRM 2011

Abstract Details

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Paper Proposal Text :
Two premises underlie this paper and presentation. First, foreign workers are needed to make up for the overall, and the sectoral and occupational, shortage of national labour supply GCC countries. In other words, foreign workers are needed for the effective and efficient functioning of GCC labour markets. Second, foreign workers present in the GCC countries are considered temporary contractual labour. In other words, the paper respects GCC policies of not setting up systems of permanent immigration.

The “Kafala” (sponsorship) system is aimed at meeting the demand for labour with foreign workers while at the same time ensuring that these workers are only temporary residents in the country. In other words, the system has the objective of maintaining the temporary contractual nature of foreign labour brought in to meet the demand of enterprises.

Clearly, the “Kafala” is at one and the same time an employment and immigration system. In the terminology used in GCC countries, it is an employment and residence system. Employers play a pivotal role in the operation of the system. They are the initiators of action and its direct beneficiaries.

Under the system, employers are the “Kafeels” (sponsors) who determine their demand for labour and meet it either directly or through intermediaries, such as private employment agencies. The employment or work permits “Kafeels” eventually obtain from government authorities are the bases for issuing temporary residence permits. It is clear that the specific employment relationships that brought the workers in provide for their legal stay for work in the country. Once the employment relationship is broken, there is no legal basis for the stay of workers. They are required to leave at once.

The hypothesis in the paper is that the system allows for easy access to foreign labour, which results in abundant supply of workers. This produces three sets of deleterious and interrelated consequences for GCC countries and for foreign workers. These consequences relate to the functioning of GCC countries, to the immigration situation of foreign workers and to the terms and conditions of employment of these same workers.

With regard to the functioning of labor markets, easy access to abundant supply of foreign labour results in depressed wages and other terms and conditions of labour of foreign workers; segmentation of the labour market; and ensuing unemployment among national workers.

Three forms of violations of the immigration (residence) regulations, which assume a tight link between employment relationships and residence permits, can result from easy access to an abundant supply of labour. Foreign workers can legally reside in GCC countries without formal employment relationships; they may abandon formal employment relationships and seek informal employment while keeping legal residence permits; and finally they may extend their stay beyond the expiry of the formal employment relationship and thus falling in irregular situations from the perspective of immigration (residence) law.

The third set of consequences relate to continued deterioration in the very terms and conditions of employment of foreign workers, often in contravention of the same legal and regulatory orders of GCC countries. Wage levels, underpayment, non-payment and late payment, overtime payments, leaves and paid flight tickets, living conditions, passport retention are among these terms and conditions.

The paper will finally make some policy suggestions for reforming the recruitment and immigration system, which will be aimed at realizing objectives of GCC countries and at improving the terms and conditions of employment of foreign workers and at improving their migration outcomes.