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Avoiding Reform, GCC States Seek Alternative Sources of Labor

On February 11, 2013

Sending-nations seeking to improve migrant worker conditions may induce reduced labor flows to the Gulf as states often react by pursuing cheaper and easily exploitable labor. Though tensions arising from labor disagreements appear to be resolved relatively quickly, they can have an enduring impact on state relations.

Saudi Arabia's recent negotiations with Indonesia, the Philippines, and Sri Lanka illustrates this trend in Gulf state behavior. Saudi preemptively proscribed visas to Indonesian workers in June 2011, following Indonesia's threat to ban workers unless the Kingdom instituted significant reforms. In the same month of 2011, Saudi responded to the Philippines' newly mandated Standard Employment Contract (SEC), which included a $400 minimum wage, by banning Filipino domestic workers. Saudi authorities signed new contracts with Ethiopia, Kenya, and Morocco - nations with less "illogical" or "excessive" requirements for workers - to meet labor demands.

Saudi recently announced impending agreements that will permit the redeployment of Indonesian domestic workers. Saudi has yet to enforce these new regulations, which include a higher minimum wage and weekly day off, but the after-affects of the ban have already reduced the rate of Indonesian employment in the country. Similarly, Saudi lifted the moratorium on Filipino domestic workers in October 2012 after relenting to SEC stipulations, though has not yet legislated all aspects of the new agreement. The UAE also agreed to implement the Philippines’ new minimum wage, but has also failed support its enforcement and many maids continue to be underpaid. The GCC states collectively disfavor the Philippine's new employment demands, in particular preferring a minimum wage capped at $240-$300. Recruiters estimate that a $400 standard wage may reduce Filipino employment in the region by 70% this year alone.

In January 2013, Saudi once more obviated calls for essentials labor reforms; Sri Lanka imposed a moratorium on domestic workers to Saudi following the execution of Rizana Nafeek, demanding improved protections for its domestic workers. As Saudi continues to deny any negligence in Nafeek’s case, the likelihood of Saudi relenting (even in word only) to reform is unlikely. Instead, Saudi will contract over 45,000 Ethiopians to meet domestic worker demands. Chairman of the Jeddah Chamber of Commerce and Industry’s Recruitment Committee noted that Ethiopians are “a good alternative," likely because they are less expensive and because of Ethiopia's lax labor requirements.

The practice of turning to cheaper, more easily exploitable nationals to avoid essential labor reforms is also evident in Qatar. Outsourcers for Nepali workers recently requested that Nepal rescind calls to increase the minimum wage to QR 1000, fearful that recruiters will turn to Bangladeshi workers who cost only QR 700. This conception of workers rights as market dependent, avoidable so long as "low cost alternatives" exist, commodifies migrants and stagnates labor rights.

The GCC's modus operandi is inauspicious to sending-nation's efforts to procure fair wages and suitable working conditions. Despite signing a number of ILO conventions, GCC nations deflect international standards when pressed - instead turning to more "impoverished" countries less likely to demand their enforcement. However, there is a limit to this policy's viability; in regards to domestic workers particularly, GCC citizens tend to favor certain nationalities for perceived talents or skills they posses. In the past, state attempts to force alternatives have aggravated citizens, who often turned to illegal markets to secure their preferences. Black market labor is a concern for states as it siphons profits from legitimate recruitment agencies and creates a number of security issues.

GCC states' penalization of sending-nations attempting to improve workers' rights circumscribes the proactive course of action available to these nations. Consequently, until GCC nations begin to routinely engage in good faith labor negotiations, sending-nations must intensify reactive protections for their expatriate citizens. Pre- and post- departure mechanisms such as recruitment agency regulation, training programs, and support structures including hotlines and attorney services can significantly buffer poor working conditions - with minimal intervention from receiving nations.

The preceding examples evidence that relations between nations are eventually re-established and that migrant workers achieve some potential gains. However, GCC responses to labor proposals remain detrimental to migrant worker conditions because they ensure an excruciatingly slow process for even the most marginal labor reforms.