It is a sound system, if there are some flaws they are in the execution. Those were the opening words of the UAE Minister of Labour Saqr Gobash Saeed Gobash when asked in Parliament about the future of the sponsorship system in the UAE. He was very clear that the system, which he argued exists in many countries under different names, is an issue of sovereignty and necessary to protect national interests. Essentially, it is a system that is here to stay.
Those who argue for the abolition of the sponsorship system argue that it leads to exploitation of foreign workers, especially of women working as domestic maids and unskilled labourers. Only recently, the Indonesian government banned its citizens from working as domestic workers in Saudi Arabia due to the recent cases of abuse of Indonesian domestic maids in the kingdom.
Another argument made against sponsorship is that it represents a barrier towards the free movement of labour and healthy competition.
In addition, some Emiratis abuse the sponsorship system by treating it as an easy source of income, leading to negative implications, fostering complacency, and exacerbating the demographic imbalance. The practices of confiscating employee passports until the end of their contracts and requiring approval or release papers to leave the country, have led many to liken sponsorship to indentured labour.
In fact, over a year ago, the Chief of Dubai Police Lt Gen Dahi Khalfan Tamim called for the abolition of the sponsorship system, arguing that it created an unnecessary burden on Emiratis.
Reasoning
In addition, the US State Department argues against the sponsorship system in the Gulf Cooperation Council, claiming that it leaves labourers and domestic workers exposed to human trafficking and forced labour. The UN High Commissioner for Human Rights Navanethem Pillay also stressed this same reasoning during a recent visit to the region.
Those who advocate abolishment also claim that this would provide more job opportunities for nationals and limit the seemingly automatic recruitment of foreign labour.
The counter-argument has been that the sponsorship system provides an important tool for the state in monitoring labour flow and it regulates the entry and residency of foreigners.
Others argue that another challenge to abolishing would be the resulting chaos in the local labour market and an unregulated influx of foreign labour, thereby further exacerbating the nation's demographic imbalance.
In addition, supporters of sponsorship argue that it provides a clear mechanism for employers to hire foreign workers, which has proven to be an economic advantage to private companies and the UAE economy. The assertion is also made that the sponsorship system reinforces the competitiveness of the UAE economy as it has made it easy to hire cheap and unskilled workers.
While the existing labour sponsorship system costs the UAE Dh50 billion annually to host four million foreign workers, Gobash contends that "the social cost could be even more, but the legitimate question here is: What are the benefits the country is getting from the current subsidies spent on foreign workers? Does the investment in subsidies pay off economically or socially at the end of the day? All of those questions have some validity and we need to answer them in a scientific manner."
Return on investment
Recent studies address the minister's comment by showing that the return on investment on foreign labourers is five times higher, making the hiring of foreign labourers and the ease of doing so through sponsorship an attractive option.
National interest, Emiratisation, strict application of zero tolerance of abuse of labourers, rights of employers, growth of the local economy, and national identity, are all issues that must be seriously taken into account as we move forward the dialogue and debate of sponsorship.
Bahrain has already abolished the sponsorship system and Kuwait will next year. I'm often asked if I'm for or against the sponsorship system and my response is that it's not a question of abolition but of reformation.
Gobash is correct in saying that virtually every country has a form of sponsorship system to regulate the influx of foreign workers into its country. However, we must also acknowledge that there are some fundamental flaws in the current sponsorship systems that inadvertently create scenarios for serious abuse.
To tackle some of those flaws, a new labour law effective January 1, 2011 introduces new policies that ease an employee's labour and residency transfer between sponsors.
In the final analysis a gradual phasing out of the flaws must be made and a more progressive regulating and monitoring system of labour and residency regulations introduced. This isn't a choice; it is a necessity as we choose to move towards a knowledge based economy and a sustainably competitive open market.
- Najla Al Awadhi is a member of the Federal National Council.
