The Kuwaiti government is considering limiting the number of expats in the country, with the potential for new laws to be imposed in order to shift the labour market and force unemployed workers out of the country, the minister for social affairs and state minister for economic affairs, Hind Al Subaih, has said.
Residence permits for some foreigners – such as those who are between jobs – may not be renewed if reforms are enacted.
The minister said any such reforms would be aimed at protecting vulnerable workers from being employed illegally. Kuwait's total population is 4.4 million and approximately two thirds are foreigners. It is understood that any changes in the law would mostly affect unskilled Asian construction workers and domestic helpers. There have been calls from officials to tax foreigners more heavily, and many MPs have pushed for a system to keep expat communities below 15 per cent of the Kuwaiti population.
An anonymous spokesperson from a Kuwait-based law firm told People Management of several new rulings affecting expatriate workers. “Regulations have been passed recently making it near impossible for expatriate employees hired by subcontractors to work on government projects, or to transfer to another employer once the project is completed,” said the spokesperson, adding there were very few exceptions that would allow these workers to stay in Kuwait after the government project was completed.
“As a result, most expatriates working on government projects will have to return to their country of origin,” said the spokesperson. “Additional fees are now being imposed on companies who hire expatriates from abroad – using no-objection certificates – above a specific percentage of the workforce set by the Ministry of Labour and Social Affairs in respect of certain business sectors.”
David Jones, labour market economist, founder and CEO at The Talent Enterprise, said his organisation’s own research indicated that employers view the labour policy reform agenda in Kuwait as the most “opaque” in the region.
Commenting on the potential effect of any new ruling to limit expat numbers, Jones said: “In the short term, such moves can only serve to reduce domestic demand at a time when it is needed most, as some expatriates and their families are encouraged to leave.
“For employers, particularly locally owned family conglomerates, such moves in the long run will accelerate the move to new business models, less reliant on cheaper expatriate labour. Initially, productivity could fall and pressure to reduce national wages in the private sector will increase as a result,” he said.
“We predict an acceleration of the adoption of new approaches towards HR, seeking to drive greater productivity and positivity in the workplace.”
Jones said he also believed that due to Kuwait’s relatively open parliamentary system, it was likely that a reaction from local business interests and private citizens may complicate the government’s efforts to move towards a new social contract.
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