GOB EMPLOYMENT AND WAGE INITIATIVES SHOW MIXED

C O N F I D E N T I A L SECTION 01 OF 03 MANAMA 000571

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/11/2017
TAGS: ECON ELAB PGOV PREL PHUM BA HUMRIT REFORM
SUBJECT: GOB EMPLOYMENT AND WAGE INITIATIVES SHOW MIXED
RESULTS

REF: MANAMA 219

Classified By: Ambassador William T. Monroe for reasons 1.4 (b) and (d)
.

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Summary
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1. (C) Bahrain's National Employment Project (NEP),which
government officials have credited with reducing the rate of
unemployment from 16 percent to 3.7 percent, will come to a
close at the end of June. Of 19,625 registrants in the
program, according to GOB statistics, just under 6,000 remain
unemployed. Approximately 22 percent withdrew from the
program, most of them women, and are no longer counted by the
government to be among the unemployed. Bahrain Training
Institute (BTI) officials told Poloff June 13 that the NEP
had trouble placing women in certain job sectors, primarily
due to cultural bias in the workplace. Since 74 percent of
NEP registrants were women, this moderated the level of
success of the overall program. On June 3 Minister of Labor
Dr. Abdulmajeed Al Alawi announced the start of a new program
of unemployment benefits to begin November 22. Since the
announcement, there has been resistance to the proposed
funding mechanism for the program: a mandatory one percent
deduction (income tax) from the salaries of most workers in
the country, which will then be matched by a government
contribution. End summary.

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National Employment Project
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2. (U) Press reports June 2 carried updated statistics on
the government's NEP, which has been touted by government
officials as having reduced unemployment in Bahrain from 16
percent to 3.7 percent in the space of 18 months. According
to Ministry of Labor Assistant Undersecretary for Training
Ahmed Al Banna, the program is scheduled to complete its
activities at the end of June, at which time the registration
for unemployed workers will be conducted at the Ministry of
Labor and at the unemployment centers in each of the
country's five governorates. Al Banna stated that the total
number of registrants under the program had reached 19,625
and that the program directly resulted in job placements for
7,825, a 40 percent success rate. In addition, several
thousand registrants found jobs through their own initiative
while participating in the program's activities. The total
number of those trained through the NEP was 6,069, and the
current count of unemployed is 5,941, according to Al Banna.


3. (U) Per an earlier set of NEP statistics released in
February 2007 (reftel),which included 18,580 registrants, 22
percent (4,132 people) had withdrawn from the program. For
example, 1,654 (8.9 percent) had withdrawn because they would
only accept day-shift jobs with the government. According to
Al Banna, most of these were women. (Note: Although there
were some government jobs available through the program, the
number was not sufficient to employ all those who insisted on
public sector work.) Another 1,363 (7.3 percent) had
registered but then did not respond to calls from the program
to appear for orientation. Just under two percent (359) left
the program to pursue further studies, and 190 (1 percent)
rejected all three job opportunities offered to them and were
therefore ineligible to continue. All of these individuals,
plus those in several other categories, were considered to
have left the program voluntarily and are no longer
considered by the Ministry to be unemployed. (Comment: This
move, as well as the government's decision to count only
those who signed up for the NEP as unemployed, account for
the steep drop in the official unemployment rate from 16 to
3.7 percent.)

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Bias Against and Challenges for Women
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4. (C) Nizar Al Qari, the former head of the marketing unit
for the NEP and currently with the Bahrain Training Institute
(BTI),told Poloff June 13 that although the program had
great success placing those seeking jobs in some sectors,
there was difficulty in others. For example, male workers
who received training in trade skills, such as carpentry,
construction, electrical wiring, and aluminum processing,
were placed into jobs immediately. The very few women who
were interested in these fields had great difficulty being
hired. Employers were reluctant to introduce women into work
environments that have traditionally been filled by men. Al
Qari admitted that these hiring practices were

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discriminatory, but that it took much time to overcome this
type of cultural bias. He said there was a higher number of
women interested in fields such as accounting and graphic
design, which would appear to be mixed gender careers, but
even trained women in these fields had a difficult time
finding placements. This presented a problem for the NEP
program because 74 percent of the participants in the program
were women.


5. (C) Al Qari expressed some disappointment with aspects of
the program that were not true to the initial design. He
said that the crowning feature of the program was supposed to
have been an assessment of the aptitudes and abilities of
registrants before they were to be counseled on placement in
training or directly to work. This part of the project was
out-sourced to EFI International, an Australian firm with
expertise in the area. Al Qari said that early in the
program, Minister of Labor Al Alawi was dissatisfied with the
speed at which program participants were being placed, so he
decided to circumvent this portion of the placement, against
the advice of EFI. The lack of a proper assessment combined
with undertrained job counselors undercut the quality of the
placements and therefore harmed the long-term job
satisfaction of those who were placed in jobs.


6. (C) In a June 13 discussion about the role of the BTI in
the NEP, director Hameed Saleh confirmed that BTI provided
the bulk of the training for NEP participants, and that the
final batch of trainees would finish their programs in
August. (Note: BTI graduates 800-1000 regular students, not
NEP trainees, each year and boasts an 84 percent job
placement rate.) He said that in addition to BTI, some NEP
participants received instruction from the Bahrain Institute
for Banking and Finance, and others received training as
nurses and optical technicians at alternate sites. Saleh
echoed the challenges of placing women in many jobs and said
that the greatest number of openings for women in the market
is in the retail sector, with some openings in banking,
finance, and information technology. However one challenge,
he said, is that jobs in retail involve interacting with the
public, and families are reluctant to allow women to take
retail jobs. Second, many women have lived sheltered lives
and lack effective interpersonal skills to deal with the
public in the retail environment. And third, many women in
the NEP program are not interested in full time employment.
To counter the last of these obstacles, the program has tried
to encourage employers to consider part-time "job-shares" as
an alternative, where two or three women make up a full-time
equivalent, but only a few employers have agreed to the
experiment.

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Unemployment Insurance
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7. (U) On June 3, Minister of Labor Al Alawi told the press
that a new unemployment insurance program would begin
operation November 22. Modeled after aspects of the NEP, and
channeling those still unemployed from the NEP, the program
will register unemployed workers, then offer them a stipend
for up to six months while they receive relevant job skills
training. Minimum benefits for those with education up to
the level of a high school graduate is BD 120 ($318) monthly,
while university graduates will receive BD 150 ($398).
Workers who are newly unemployed will reportedly receive 60
percent of their former salary up to a maximum of BD 500
($1325) per month. After completing training, each trainee
will be offered up to two job opportunities. If a trainee
refuses both opportunities, he will be considered unwilling
to work and no longer eligible for the program and its
benefits.


8. (U) The GOB's intent to fund the program through a one
percent deduction from worker salaries, which the GOB will
then match, has drawn resistance from both public and private
sector workers. (Note: There is no income tax in Bahrain.)
The press reported June 16 that an independent national
committee had formed to oppose the salary deduction.
Ministers, parliamentarians, members of the armed forces, and
public security personnel reportedly are among those who will
be exempt from the deduction. Blogger Mahmood Al Yousif
explained in a June 16 Weblog entry that the objection of
some clerics is that under Islam people cannot be forced to
give up part of their income without their willing consent.
Money obtained in this way is considered "tainted," and thus
it is forbidden for either the government or unemployed
individuals to accept it. Hence, he goes on, rather
sarcastically, Al Wifaq MPs are backpedaling from a royal
decree establishing the unemployment insurance scheme that
they passed unanimously at the beginning of the parliamentary

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session, on the basis that it would help their constituents,
now that clerics are weighing in against the program. MPs
claim they did not know at the time of the vote how the GOB
was planning to raise funds for the program.

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MOL Wage Subsidy
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9. (U) In an effort to raise the floor of wages in the
private sector, the Ministry of Labor's Committee to Improve
Wages and Productivity has been seeking the partnership of
companies in Bahrain to boost salaries. In the absence of a
minimum salary in the private sector, the ministry has set a
level of BD 200 ($530) per month, but only for Bahraini
workers. For workers currently earning less than this
amount, the ministry pledges to pay up to BD 50 per month for
six months. During that interval, the ministry also offers
training to these workers to increase their productivity. At
the end of the six month period, the company will be
responsible to maintain the BD 200 salary and, hopefully,
will have a more productive employee. The ministry announced
June 8 that an additional 25 companies had signed on to the
plan, bringing the total number of companies who have pledged
to participate to 420, thereby raising the salaries of almost
14,000 Bahraini workers. Although it is the ministry's
desire to have all private sector companies participate in
the program, some companies have expressed skepticism that
the program can ensure higher productivity and anticipate
that the program will not last long.

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Comment
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10. (C) Although it is clear that the NEP has contributed to
greater employment of Bahrainis, the unemployment percentage
of 3.7 is positively skewed by the Ministry of Labor's
limited definition of who is unemployed, even when taking
into account the statistical effect of housewives merely
looking for a change of scenery, not a job. One positive
effect of the NEP has been the drop in the number of
demonstrations by disenchanted unemployed, which resulted in
low-level violence in 2005. The program to a great extent
took the wind out of the sails of protesters looking for a
reason to fight the government.

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