Bahrain to fund private sector salaries with $570 million relief initiative due to Covid-19

Kingdom to pay for wages of 100,000 citizens in private sector jobs from April to June

FILE PHOTO: General view of Bahrain's financial district in Manama, Bahrain, June 20, 2019. REUTERS/ Hamad I Mohammed/File Photo
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Bahrain rolled out a $570 million (Dh2.09 billion) initiative to pay for the wages of 100,000 citizens working in the private sector for three months, covering April to June, as a measure to help relieve the economic impact of the coronavirus on businesses and workers.

Employers can register for the aid through an online portal launched on April 8, according to a statement from the Bahrain Economic Development Board on Wednesday.

The government guarantee is part of a move to provide liquidity to the private sector to help mitigate the social and economic impacts of the current global health crisis, Jamil Humaidan, Bahrain's Minister of Labour and Social Development, said. The assistance will also maintain the growth of the private sector and its vital role in supporting the national economy.

The initiative is part of an $11bn economic support programme aimed at helping the private sector cope with the impact of the Covid-19 crisis. Additional initiatives by Bahrain's Ministry of Finance and National Economy include the government sponsoring electricity and water bills for all subscribers, exempting commercial institutions from municipal fees, exempting industrial and commercial institutions from industrial land rental fees and exempting tourist establishments from tourism fees.

The salaries initiative comes as Gulf nations announce a series of measures to mitigate the impact of the fast-spreading virus on their economies.

Among the hydrocarbon-rich states in the Gulf, which account for about a third of the world’s proven oil reserves, the Central Bank of the UAE was the first to rollout a Dh100bn economic stimulus, which it increased to Dh256bn. The regulator reduced reserve restrictions on bank deposits and massively expanded its Targeted Economic Support Scheme. In parallel, the UAE government pushed out a Dh26bn in fiscal stimulus.

Saudi Arabia pledged to cover 60 per cent of worker salaries up to 9,000 Saudi riyals (Dh 8,787) per month in private sector industries hit by the coronavirus pandemic for the next three months. This is in addition to the government’s 70bn riyal package to support the corporate sector and a 50bn riyal programme for banks and financial institutions.

Kuwait's central bank also announced a stimulus package on April 2 to support smaller businesses as it reduced liquidity and capital adequacy requirements for banks and cut risk weighting for SMEs. The package increased banks' lending capacity by 5 billion dinars (Dh58bn).

Governments across the world have similarly rushed to put together stimulus packages to shield their economies from the pandemic that has ravaged the global economy.