x Abu Dhabi, UAEThursday 18 January 2018

Qatar looks to toughen employment law for nationals

The labour ministry is reviewing an increased fine scheme for businesses that fail to meet Qatarisation quotas, but analysts question its viability and accountability.

DOHA // Qatar could soon have some of the most stringent rules in the Gulf to force private and public firms to employ nationals. 

Under a proposed law being reviewed by the labour ministry, employers would face a fine of up to 100,000 rials (Dh100,900) if less than 20 per cent of their workforce is Qatari. Repeat violations would lead to a doubling or tripling of fines, and firms would face surprise inspections from officials to check if they are meeting the quota.

The proposed rules, which were passed on to the labour ministry by the state cabinet last month, would not be the first time Qatar has attempted to expand the Qatari role in its workforce. In May 1997, the Qatari emir decreed that Qataris had to make up at least 20 per cent of all private business staffs. But without legislation and enforcement, the edict had little effect: by 2005 the percentage of Qataris working in the private sector was still less than one per cent, according to the Qatar Planning Council.

Few doubt that efforts to nationalise labour forces in Qatar and across the Gulf are essential to ensuring the region's long-term social and economic security. But as far-reaching policies such as Qatar's come up against the realities of the marketplace, some question the means used to achieve this end. "It's a very, very ambitious attempt," said Steffen Hertog, a lecturer at the London School of Economics who has studied labour in the Gulf. "But no labour minister or other ministry has the regulatory capacity to monitor such a law."

Such laws lead to corruption and manipulation of the rules, he said. "It's been tried in most of the other countries in the Gulf Co-operation Council and it has uniformly failed." 

Gulf states have relied heavily on skilled and unskilled foreign workers since the oil boom of the 1970s. Today, a combination of rapid growth, high unemployment and a youth bulge are compounding the problem. By 2020, the number of expatriate workers in the Gulf will increase to 30 million from today's 17 million, according to the secretariat of the GCC.

"More and more GCC citizens are graduating from universities and institutes and cannot find jobs," said a GCC Secretariat report last year. "It is time for the GCC countries to intensify their efforts to find jobs for their people … otherwise it will be too late." In the UAE and Qatar, nearly 40 per cent of the population is under 20 years old and expatriates comprise about 90 per cent of each country's workforce.

Continued failure to provide young Qataris with "the education and training needed to equip them with the appropriate skills for the market could threaten Qatar's long-term economic viability", said a 2009 report from the Rand-Qatar Policy Institute. Bahrain launched one of the region's first official nationalisation programmes in 1998. The UAE started setting quotas for the hiring of Emiratis in various sectors soon after. In 2002, Saudi Arabia set a target of a 70 per cent Saudi workforce and has begun building economic cities to employ nationals in large numbers.

Oman has made considerable strides in employment. With 80 per cent nationalisation of the public sector, it is the only Gulf state that has taken steps to reduce the government's employment of nationals. Officials in Qatar's oil and natural gas sector kicked off the country's nationalisation drive in the mid-1980s, setting a sector target of 40 per cent national staff. Many of the Qataris hired as a result were unprepared and the goal soon shifted to "quality Qatarisation", which called for improved education and training.

Qatar launched its first Strategic Qatarisation Plan in June 2000. With a target of 50 per cent national workforce across the oil and gas sector, the plan included education, training, monitoring and a biannual review. An overhaul of the Qatari school system followed, along with the opening of several prestigious US universities in Education City. Next year will see the addition of HEC Paris, one of the world's leading business schools.

In May, the energy minister, Abdullah bin Hamad al Attiyah, said he was satisfied with the programme, which had tripled the number of Qataris working in the industry, to 9,000, and achieved nearly 30 per cent Qatari staffing. Yet as in other Gulf states, bringing nationals into the private sector has proven more difficult. In 2005, private sector employment for Gulf nationals ranged from Saudi Arabia's 15 per cent to 0.7 per cent in Qatar.

The advantages of public sector employment include greater total compensation, job security and shorter working hours. In addition, many public sector jobs involve minimal skills and commitment. For years, Gulf states embraced quotas in their attempts to bring nationals into the private sector. But a backlash is building. A May 2009 study by the UAE's Emiratisation authority, Tanmia, found that the effect of quota policies was more negative than positive. Just last month, an editorial in ThePeninsula daily newspaper in Doha said that such laws could "create a sense of entitlement among its citizens".

Maryam al Sabaiye, who recently wrote her thesis on Qatarisation for the University of London's School of Oriental and African Studies, saw many cases in which the experienced expatriate was fired and replaced by the unprepared national. "If you want to use a quota, you have to ensure there is quality, there is training and monitoring," she said. A steady supply of cheap foreign labour and little incentive to acquire the necessary skills are additional hurdles. "Most [Qataris] have the option to enter the public sector," Mr Hertog said. "They have little reason to acquire top-notch education and experience."

He called for a market-based solution, such as a tax on employers of foreigners or increased visa fees, and commended Bahrain for moving in this direction. "As long as Qataris must compete with foreign labourers from the poorer part of the labour market, they will lose out," Mr Hertog said. Some see the proposed law - which also includes fines of up to 50,000 rials for private firms that fail to adequately train their Qatari employees - as a step back.

"This is not a good way to implement Qatarisation," Ms al Sabaiye said. "In the end it will just cost more money, time and effort."