Contractors protest but LMRA stands by labour fees

by Benjamin Millington

Bahrain’s Labour Market Regulatory Authority (LMRA) downplayed the concerns of around 500 contractors and small business owners who held a protest this morning against government imposed labour fees.

From 9am until noon the protestors waved placards, chanted slogans and gave speeches on the steps of the LMRA headquarters in Sanabis, calling for the government to remove a monthly $26.50 (BHD 10) fee paid by employers for every expatriate worker.

Some placards showed the LMRA laughing while taking money from families crying tears of blood – representing how the fees are hurting families, said building materials supplier Nader Allawi of Nader Allawi Trading Centre.

“I have seven workers and cannot afford 70 dinars ($185) a month,” he said. “I have had to tell my wife now that we cannot pay for the school fees because of this.”

Jabal said the fees will soon force many small businesses like his to go bankrupt amid the financial pressures of the global recession.

But, LMRA spokesperson Waheed Al Balushi said the statistics do not support the protestor’s claims.

“Our studies show that the 10 dinar labour fee will only add 3% to the cost of labour and in general this should not affect a true working business,” he said.

“They could be protesting because they are making less profit, but 3% of the labour cost is not much.

“Statistics from the Chamber of Commerce also show that the rate of business failure has not increased since the fees were introduced in July. If it was increasing I would ask them to provide proof and we will conduct a review of the affects of the fees.”

Al Balushi said the main purpose of the fee was to close the gap between the cost of local labour and expat labour in a bid to reduce the country’s growing unemployment rate.

He said their statistics show that the rate of Bahraini employment is still declining and the demand for expat labour increasing, which also proves that the fees are not having a huge financial impact on contractors.

But, owner of the National Transport Company Khalid Abdulrahman said Bahrainis do not want to work in the construction sector.

“If I get a Bahraini who is willing to work then I will employ them, but you can’t get them easily, they all want to work in banks and offices,” he said.

“They say our money is going towards training and these things but we have had technical colleges for the last 50 years and still I cannot get a Bahraini plumber.

“In the last seven months they have collected 120 million dinars ($318 million) from these fees and for what, where is it going? The money needs to go directly to the small business owners so that they can revive themselves.”

According to the LMRA, 20% of the revenue raised by the fees goes towards the government budget and 80% to the Labour Fund (Tamkeen), which offers training and consultation services to improve the productivity and profitability of small businesses.

“Around 350 construction firms have had the benefit of a business consultant who has improved their productivity and these firms have no problems,” said Al Balushi.

“Tamkeen has also handed out more than BHD 7 million ($18.5 million) in grants and loans to small businesses.”

Al Balushi said any decision to remove the monthly fees must be made by Bahrain’s parliament and cabinet.

The head of Bahrain Contractors Association Needham Kameski said they will continue to protest each Sunday for the next five weeks until their concerns are addressed.

2 thoughts on “Contractors protest but LMRA stands by labour fees

  1. how did you come up with the 3% increase in labor cost? if labor are being paid around BD 80 a month and contractors would pay ten dinars on the salary, this will make a 13% increase.
    The 3% could be true in other industries, Not contracting! be logical please.

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