Qatar firms’ failure to pay leaves migrant workers destitute – report that details how ‘Despite government measures, thousands left struggling during Covid outbreak as companies withhold salaries and benefits, research shows’
Companies in Qatar have failed to pay “hundreds of millions of dollars” in salaries and other benefits to low-wage workers since the coronavirus outbreak, according to new research by the human rights group Equidem.
Construction workers at Al Janoub stadium during a media tour in Doha, Qatar. The stadium is the second among eight stadiums being built for the Fifa World Cup 2022 in Qatar. Photograph: Ali Haider/EPA
In its report, Equidem describes how thousands of workers have been dismissed without notice, put on reduced wages or unpaid leave, denied outstanding salary and end of service payments, or forced to pay for their own flights home.
The report’s findings appear to amount to “wage theft” on an unprecedented scale, leaving “worker after worker” destitute, short of food and unable to send money home during the pandemic, in one of the richest countries in the world.Advertisement
“I came here to work for my family, not to be a beggar living on my own,” said a cleaner from Bangladesh, who said he had not received his salary for four months.
In separate research, the Business and Human Rights Resource Centre found that unpaid or delayed wages were cited by workers in 87% of cases of alleged labour abuse affecting almost 12,000 workers since 2016.
Equidem praises some measures put in place by the Qatar government during the coronavirus pandemic. In March, the government made it mandatory for companies to continue to pay workers in quarantine or government-imposed isolation, and set up a £625m loan scheme to help companies do so, but the report warns of “widespread failure to comply” with this and other regulations.
The government later permitted companies that had stopped operating due to Covid restrictions to put workers on unpaid leave or terminate their contracts as long as they complied with requirements of the labour law, including giving a notice period and paying outstanding benefits.
The report highlights a number of companies that exploited or ignored this directive. Up to 2,000 workers employed by one construction company were laid off on the spot, workers claim. Most did not receive their outstanding salary or end of service settlement, a payment equivalent to three weeks’ salary for each full year of work.
“Many migrant workers are in an extremely vulnerable position with no real ability to assert their rights or seek remedy for violations,” says the report.
Mustafa Qadri, the director of Equidem, said the lack of a lawful right to organise or join a trade union has been particularly damaging. “It has prevented workers from having a seat at the table with government and employers to negotiate an equitable share of funds,” he said.
The report describes similar findings in the United Arab Emirates and Saudi Arabia, as well as policies in response to the pandemic which amount to racial discrimination. In both countries, the authorities required private companies to continue to provide wages and benefits to nationals, but allowed them to reduce wages or stop paying non-nationals.
In a statement, the Qatar government said its response to the pandemic, “has been driven by the highest international standards of public health policy and the protection of human rights”.
The government has provided free testing and treatment and said, “employers failing to pay their staff on time or withholding end of service payments have faced disciplinary action, including heavy fines and bans that prevent them from operating”.
The answer to What is the State of Human Capital in the MENA Region? is given by Keiko Miwa, Regional Director, Human Development, Middle East & North Africa – World Bank and Jeremie Amoroso, Strategy & Operations Officer, Human Development, Middle East & North Africa – World Bank.
Countries in the Middle East and North Africa (MENA) have made good progress in improving human capital over the past decade. And yet a child born in MENA today can expect to achieve (on average) only 57 percent of her future productivity. On top of that, the COVID-19 crisis poses significant risks to hard-earned improvements in human capital in MENA. We can—and should—do much more to preserve and improve human capital in the MENA region.
The World Bank recently released the Human Capital Index 2020 (HCI). This update covers 174 countries—17 more than when the index was first launched in 2018. Not surprisingly, the HCI scores among MENA countries vary widely from 0.67 in the United Arab Emirates (UAE) to 0.37 in Yemen. Countries affected by conflict, such as Iraq and Yemen, score low on the index, which poses an important question on how to support the protection and enhancement of human capital even in the midst of conflict.
Looking at the 10-year trend, the HCI improved in 11 out of 14 MENA countries (with available data). Morocco, Oman, and the UAE registered the largest gains in the HCI during this period. School enrollment—at the preprimary and secondary levels—as well as harmonized test scores and adult survival, are the main drivers of the region’s HCI improvements. During this period, girls surpassed boys in educational attainment. On the other hand, enrollment declines in primary and lower-secondary school outweighed gains in other components of HCI for Kuwait, Tunisia, and Jordan.
Figure 1. Change in HCI 2020 and HCI 2020 in MENA countries
Source: World Bank. 2020. The Human Capital Index 2020 Update: Human Capital in the Time of COVID-19.
Note: Arrows indicate a decline in the HCI between 2010 and 2020. Data unavailable for Yemen, Iraq, Lebanon, and West Bank and Gaza for HCI 2010. See World Bank’s list of countries/economies by region.
WHAT’S NEW IN THE HUMAN CAPITAL INDEX 2020?
The HCI 2020 update introduces the Utilization-Adjusted Human Capital Index (UHCI). This is quite relevant in several MENA countries since there is a large gap between human capital and labor market outcomes. The utilization of human capital accounts for the fact that when today’s child becomes a future worker, she may not be able to find a job (Basic UHCI). And even if she can, it might not be a job where she can fully use her skills and cognitive abilities in better employment that increases her productivity (Full UHCI). When adjusting for the proportion of the working-age population who are employed, MENA’s HCI value declines by at least one-third—from 0.57 to 0.32 (Basic UHCI) and 0.38 (Full UHCI). Low female labor force participation rates in MENA countries are a key factor for the region’s low Utilization-Adjusted HCI.
Figure 2. The average MENA HCI value declines by more than a third when accounting for the proportion of the working-age population who are employed.
Source: World Bank. 2020. The Human Capital Index 2020 Update: Human Capital in the Time of COVID-19.
RISKS TO HARD-EARNED HUMAN CAPITAL
COVID-19 has cascaded into education shocks and the worst economic recession since World War II. At the height of the pandemic, almost 84 million children were out of school in MENA, and now countries that started to open schools are now reconsidering their decision due to the second wave. This could result in the loss of 0.6 years of schooling (adjusted for quality). Nevertheless, some MENA countries took early actions and adopted innovative measures to continue education. In Jordan, for example, the private sector and education officials collaborated to develop an education portal and dedicated TV channels for virtual lectures in Arabic, English, math, and science for grades one through 12. And Saudi Arabia’s universities achieved unprecedented results as more than 1.2 million users attended over 7,600 virtual classes, totaling 107,000 learning hours.
The HCI 2020 update uses data gathered as of March 2020—prior to the COVID-19 pandemic. It serves as a baseline for policymakers to track changes in human capital and inform policies to protect and invest in people through the pandemic and beyond. Previous pandemics and crises taught us that their effects are not only felt by those directly impacted, but often ripple across populations and, in many cases, across generations. COVID-19 is no exception. As a result, the region can—and must—build on its human capital progress amid the turmoil in three key ways.
First, the MENA region needs to continue building its human capital even during the pandemic or conflict. Crisis response measures that emerged out of necessity—such as distance learning and telemedicine—present new opportunities for building back better and differently the “new normal.”
Second, many countries in MENA have shown their sharp focus on protecting human capital by ramping up cash transfers and strengthening social safety nets since the onset of the pandemic. However, stronger efforts are still needed to preserve the human capital of internally displaced persons and refugees and to foster social inclusion for economic mobility.
Third, utilizing human capital is important to the immediate recovery and long-term development of MENA—the region with the highest youth unemployment in the world at more than 25 percent. Utilizing human capital requires job-focused policies as concerns about the future of work grow louder.
The HCI 2020 update shows that many MENA countries have made meaningful human capital progress over the past 10 years. As the pandemic threatens these precious gains, investment in human capital is more important than ever. Governments in MENA have launched promising initiatives that will help to build a better future. When today’s children in MENA become adults, hopefully, they will see how their region of the world turned the unprecedented crisis in 2020 into an opportunity to build stronger human capital.
Kuwait Times of 10 August 2020 published Govt, Assembly near deal on plan to cut expat numbers in Kuwait by B Izzak. The issue is as an old hat as any in the Gulf region, particularly in Kuwait where the migrant workers have been on its Parliament’s agenda for years. It is estimated that migrants, the majority of which come from Asia, make up more than 50% of the workforce and even as much as 90% in some countries in the region. Kuwait is no exception and at this conjecture, things have gone so far as to prompt, last week, a collective of international investors got in touch with 54 businesses operating in the region to ask what safeguards are in place for any migrant workers they employ, either directly or indirectly.
In any case here is Govt, Assembly near deal on plan to cut expat numbers .
KUWAIT: The government and the National Assembly appear to be nearing to approve a plan that envisages short-, mid- and long-term measures to drastically cut the number of expats in the country, with the government proposing to deport as many as 360,000 workers in the short-term.
Member of the Assembly’s manpower resources development committee MP Osama Al-Shaheen said the government’s plan calls to deport 120,000 illegal workers, 150,000 expats aged over 60 – employees, dependents or those suffering from chronic diseases – in addition to deporting 90,000 marginal and poorly-educated laborers.
The plan also proposes to cut tens of thousands of other expats through replacement, adopting technology and tightening the screws on recruitment, the lawmaker said. Shaheen said government plans show that the Kuwaiti population grew by 55 percent to 1.33 million between 2005 and the end of last year, while expats grew by more than 130 percent to 3.08 million during the same period.
Head of the committee MP Khalil Al-Saleh praised the government’s plan, presented to the panel by Minister of Social Affairs Mariam Al-Aqeel. He said the panel asked the minister to submit timelines for implementation, like setting an exact timetable for the next five years showing the size of cuts each year. He said the panel asked the government to submit legislation needed to implement the plan by the end of this week. This will allow the committee to complete its report next week and submit it to the Assembly for voting.
Saleh said the discussion with the minister focused on steps needed to introduce a quota system that creates a balance between communities and takes care of security requirements. He said the government’s plan is more than excellent as it provides many solutions regarding the numbers of expats, nationalities, domestic helpers and trafficking in persons.
The committee is also expected to review seven draft laws presented by MPs, all concerning measures to amend the population structure, currently tilted in favor of expats who make up 70 percent of the population. Shaheen said the government plan shows that one of the main problems for the small number of Kuwaitis in the private sector is the huge difference between benefits in the public and private sectors.
He said the plan shows that the average monthly salary for Kuwaiti males in the government is KD 1,769 and KD 1,265 for females, with 154 average monthly working hours. At the same time, average salaries in the private sector are KD 1,387 for Kuwaiti men and KD 835 for Kuwaiti women, with 187 monthly working hours, far more than the government sector. Shaheen said that the plan also shows that the state budget rose 15.5 percent with each 5 percent increase in the number of expats as a result of spending on health, subsidies and infrastructure.
As the coronavirus pandemic hits jobs and wages in many sectors of the global economy that depend on migrants, a slowdown in the amount of money these workers send back home to their families looks increasingly likely. These international remittances will be crucial in transmitting the unfolding economic crisis in richer countries to poorer countries. They will fundamentally shape how, and the pace at which, the world recovers from coronavirus.
Remittances shelter a large number of poor and vulnerable households, underpinning the survival strategies of over 1 billion people. In 2019, an estimated 200 million people in the global migrant workforce sent home US$715 billion (£571 billion). Of this, it’s estimated US$551 billion supported up to 800 million households living in low- and middle-income countries.
The majority of remittances are small sums of money, spent by recipients on everyday subsistence needs including food, education and health. The World Bank projects that within five years, remittances will outstrip overseas aid and foreign direct investment combined, reflecting the extent to which global financial flows have been reshaped by migration.
But the social distancing and lockdown measures used to contain the spread of coronavirus have led to a global economic slump, with the International Monetary Fund predicting the global economy will contract by 3% in 2020. Three issues make this looming crisis particularly salient for the migrant workers who generate remittances.
Migrant workers at risk
First, as the Institute for Public Policy Research think tank illustrated in a recent briefing, migrant workers tend to work in sectors that are particularly vulnerable at times of an economic downturn and have less employee protections. They are also more likely to be self-employed.
Second, the access migrant workers have to public funds is – with some exceptions – specifically restricted as a condition of their visas. So it’s uncertain whether they will be able to access the already limited government interventions to mitigate the effects of the pandemic. For example, the South African government’s initiative to help small- and medium-sized businesses is only available for those with South African citizenship.
Third, and as a result of this, migrant workers adopt a series of strategies or tactics to cope. They often continue to work in compromised circumstances, such as in jobs with lower wages, poor working conditions and, in the current crisis, exposure to infection. They also restrict their spending – and contemplate a return back home.
In the UK, some migrants are hyper-visible NHS doctors and nurses. Their labour has been somewhat belatedly acknowledged by the government, and their importance to the health service demonstrated by the Home Office’s decision to extend all visas of health workers coming up for renewal by a year.
But many more migrants are hidden and largely unsung heroes who continue to work in so-called semi-skilled or unskilled jobs in sectors such as food manufacturing and delivery, social care and cleaning. High rates of infection among Somali migrants in Norway, for example, are partly attributable to their concentration in these “close-contact” professions where home working is not an option.
Shops shuttered in Brooklyn, New York during the coronavirus pandemic. Alba Vigaray/EPA
The 2008 financial crisis
The 2008 financial crash and recession provide some indications of how this crisis in migrant work may affect remittance flows. Between 2008 and 2009, remittance flows declined by 5.5% globally. Some parts of the world saw even more marked declines. Transfers to Latin America and the Caribbean, most originating from the US, decreased by 12%. Migrants remitted smaller amounts, more infrequently, or in extreme cases, stopped altogether as they were laid off and faced uncertain future employment prospects.
Early predictions of the impact of coronavirus on remittances detail significant declines. One study by the Inter-American Dialogue estimated there would be a 7% decline in remittances from the US, which will fall from by US$76 billion to US$70 billion, with receiving households from Mexico and Central America being most affected. According to another study by BBVA Research, remittances to Mexico could fall by 17%.
With the global economy slowing down even before coronavirus, and the pandemic affecting different parts of the world over different timelines, long-term recovery prospects are unclear. The particular vulnerability of poor countries is apparent with the World Bank pledging US$160 billion over the next 15 months to aid both immediate health priorities and longer term economic recovery.
It remains unclear whether that US$160 billion is adequate and will reach vulnerable households, particularly given the negative impact the World Bank and IMF’s historic structural adjustment programmes, in which strict spending conditions were attached to aid, had on the healthcare systems of many developing countries.
In contrast, remittances – often known as aid that reaches its destination – constitute a significant safety net for vulnerable households. Our own research shows that remittances don’t just reach immediate household members but are also distributed among extended family and friends. They also support local economies through family payments to shopkeepers and construction workers. In regions such as the Horn of Africa, where 40% of households are heavily dependent upon remittances, any disruption in flows sent by the Somali diaspora will further exacerbate food insecurity.
How richer nations respond to the current crisis will have significant economic ramifications for countries dependent on remittances. Richer nations must adopt inclusive economic policies which both protect the livelihoods of migrants and reduce the socio-economic impacts of the pandemic. Their jobs are linked to the survival of millions of others.
Posted on March 8, 2020, in The Arab Weekly, Six decades after independence, Middle East still looking for growth model by Rashmee Roshan Lall is an accurate survey of the region that faces, as we speak, prospects of harshest times. How is the Middle East still looking for a growth model? Investing in the human capital of children and young people as well as enhancing their prospects for productive employment and economic growth is little more complicated than relying on Crude Oil exports related revenues. These are the main if not the only source of earnings of the region now plummeting perhaps for good before even peaking. In effect, all petrodollar inspired and financed development that, put simply, was transposed from certain parts of the world, using not only imported materials but also management and all human resources can not result in anything different from that described in this article.
Though a large youthful population would normally be regarded an economic blessing, it’s become the bane of the MENA region.
Dramatic changes. Employees of Aramco oil company at Saudi Arabia’s Abqaiq oil processing plant. (AFP)
It’s been 75 years since World War II ended and the idea of decolonising the Middle East and North Africa began to gain ground but, while formal colonisation ended about six decades ago, the region seems unable to find a clear path to growth.
Rather than an “Arab spring,” what may be needed is a temperate autumn, a season of mellow fruitfulness to tackle the region’s biggest problems. These include finding a way to use the demographic bulge to advantage, reducing inequality of opportunity and outcome and boosting local opportunity.
Here are some of the region’s key issues:
Youth ‘explosion’
The MENA region’s population grew from around 100 million in 1950 to approximately 380 million in 2000, the Population Reference Bureau said. It is now about 420 million and half that population lives in four countries — Egypt, Sudan, Iraq and Yemen.
The 2016 Arab Human Development Report, which focused on youth, said most of the region’s population is under the age of 25.
The youth bulge is the result of declining mortality rates in the past 40 years as well as an average annual population growth rate of 1.8%, compared with 1% globally. The absolute number of young people is predicted to increase from 46 million in 2010 to 58 million in 2025.
Though a large youthful population would normally be regarded an economic blessing, it’s become the bane of the MENA region. The demographic trend suggests the region needs to create more than 300 million jobs by 2050, the World Bank said.
Jihad Azour, International Monetary Fund (IMF) director for the Middle East and Central Asia, said MENA countries’ growth rate “is lower that what is required to tackle unemployment. Youth unemployment in the region exceeds 25%-30%.” The average unemployment rate across the region is 11%, compared to 7% in other emerging and developing economies.
Unsurprisingly, said Harvard economist Ishac Diwan, a senior fellow at the Middle East Initiative, young Arabs are unhappier than their elders as well as their peers in countries at similar stages of development.
Last year’s Arab Youth Survey stated that 45% of young Arab respondents said they regard joblessness as one of the region’s main challenges, well ahead of the Syrian war (28%) and the threat of terrorism (26%).
The region’s population is expected to nearly double by 2030 and the IMF estimated that 27 million young Arabs will enter the labour market the next five years.
Poverty and inequality
Most Arab people do not live in oil-rich countries. Data from the UN Economic and Social Commission for Western Asia (ESCWA) stated that 116 million people across ten Arab countries (41% of the total population), are poor and another 25% were vulnerable to poverty. This translates to an estimated 250 million people who may be poor or vulnerable out of a population of 400 million.
The MENA region is also regarded as the most unequal in the world, with the top 10% of its people accounting for 64% of wealth, although the average masks enormous differences from one country to another.
The middle class in non-oil producing Arab countries has shrunk from 45% to 33% of the population, ESCWA economists said. In a report for the Carnegie Corporation last year, Palestinian-American author Rami G. Khouri described what he called “poverty’s new agony,” the fact that a poor family in the Middle East will remain poor for several generations.
Egypt is a case in point. In 2018, Cairo vowed to halve poverty by 2020 and eliminate it by 2030. However, Egypt’s national statistics agency released a report on household finances last year that said that 33% of Egypt’s 99 million people were classified as poor, up from 28% in 2015. The World Bank subsequently nearly doubled that figure, saying 60% of Egyptians were “either poor or vulnerable.”
Wealth gaps between countries are greater in the region than in others because it has some of the world’s richest economies as well as some of the poorest, such as Yemen.
Inequality is not the only problem in the region. Former World Bank economist Branko Milanovic said the uneven picture means that last year’s protests in Lebanon, Algeria, Sudan and Iraq cannot be explained by “a blanket story of inequality.”
Indeed, Algeria, a relatively egalitarian country, was roiled by protests, first against a long-serving president and then against the wider political system.
French economist Thomas Piketty, who wrote the bestselling book on income inequality, “Capital in the Twenty-First Century,” said Arab countries must come up with a way to share the region’s vast and unequally distributed wealth.
Lost decades of growth
In the decade from 2009, the region’s average economic growth was one-third slower than in the previous decade. The IMF said per capita incomes have been “near stagnant” and youth unemployment has “worsened significantly.”
The state is the largest employer in many Arab countries and over-regulation of the private sector left it underdeveloped and unable to overcome the significant barriers to trade and economic cooperation across regional borders. Meanwhile, inflexible labour laws stifled job creation and cronyism allowed inefficiency to stay unchallenged. In 2018, the average rank of Arab countries on the World Bank’s Doing Business survey was 115th out of 190 countries.
Along with structural factors, conflict has had a debilitating effect on economic growth. Three years ago, the World Bank noted that the Syrian war had killed approximately 500,000 people, displaced half the population — more than 10 million people — and reduced more than two-thirds of Syrians to poverty.
By 2017, conflict in Yemen and Libya had displaced more than 15% and 10% of their respective populations of 4 million and 6 million. Taken together, the Syrian, Yemen and Libyan civil wars have affected more than 60 million people, about one-fifth of the MENA population.
Infrastructural damage runs into the billions of dollars but it is the loss — or outright collapse, as in Yemen — of economic activity that has affected real GDP growth.
Countries in the region affected by conflict lost $614 billion cumulatively in GDP from 2010-15 — 6% of the regional GDP, ESCWA’s 2018 report on institutional development in post-conflict settings stated.
New thinking needed
This is the year when, for the first time, an Arab country holds the chairmanship of the Group of 20 of the world’s largest economies. It could be an opportunity to consider existing trends within the region, what needs to be changed and how.
In the words of Oxford development macroeconomist Adeel Malik, “the Arab developmental model… seems to have passed its expiration date.” In a 2014 paper for the Journal of International Affairs, Malik said “failure of the Arab state to deliver social justice is ultimately rooted in the failure of a development model based on heavy state intervention in the economy and increasingly unsustainable buyouts of local populations through generous welfare entitlements.”
It’s a good point, for the region’s richest countries just as much as its poorest. Oil-rich states are affected by dramatic changes in oil prices and the increasingly urgent suggestion that the world is at “peak oil.” An IMF report warned that, by 2034, declining oil demand could erode the $2 trillion in financial wealth amassed by Gulf Cooperation Council members. The IMF said “faster progress with economic diversification and private sector development will be critical to ensure sustainable growth.”
Creativity and courage will be needed if the Arab world is to meet the expectations of its youthful population and the challenges posed by its increasing inequality.
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