VZCZCXYZ0000
OO RUEHWEB

DE RUEHMK #0089/01 0311422
ZNR UUUUU ZZH
O 311422Z JAN 07
FM AMEMBASSY MANAMA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6359
INFO RUEHC/DEPT OF LABOR WASHDC PRIORITY

UNCLAS MANAMA 000089 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR DRL/IL: AL ANZALDUA, NEA/PI 
DEPT PASS USTR/JBUNTIN 
 
E.O. 12958: N/A 
TAGS: ELAB EAID ECON EIND ETRD BA ECTRD
SUBJECT: BAHRAIN:  SURVEY OF LABOR PROGRAMMING NEEDS 
 
REF: A. 2006 STATE 200668 
     ¶B. 2006 MANAMA 2013 
     ¶C. 2006 MANAMA 1979 
 
------------------------- 
Bahrain Trade, Labor Scene 
-------------------------- 
 
¶1.  (SBU) Bahrain,s economy is growing at a healthy pace. 
The IMF credits Bahrain with GDP growth of 7.1 percent for 
2006 and forecasts an increase of 6.3 percent for 2007. 
Bahrain,s 2006 purchasing power parity GDP was $17.7 billion 
and per capita GDP stood at $25,300.  The GOB makes efforts 
to keep inflation low and its currency stable (the dinar is 
pegged to the dollar at $1 = 0.377 BD).  Despite Bahrain,s 
modest oil reserves, its refineries process local oil and oil 
from Saudi Arabia, allowing Bahrain,s economy to realize a 
significant benefit from high oil prices.  The US-Bahrain FTA 
was implemented August 1, 2006, furthering Bahrain,s already 
solid economic growth prospects.  Bilateral trade for 2006 
through November reached over one billion dollars for the 
first time, a growth rate of 45% over the same period in 2005. 
 
¶2.  (SBU) Bahrain's economy depends on foreign laborers from 
South Asia and Southeast Asia.  Expatriate workers and their 
families make up approximately 38 percent of the total 
population and 57 percent of the labor force, which totals 
approximately 325,000.  Most foreign workers are unskilled 
laborers working in manual jobs, but there are also skilled 
foreign workers in the public sector and in white collar 
private sector jobs.  A labor reform project championed by 
Crown Prince Shaikh Salman Bin Hamad Al Khalifa established 
the Labor Market Regulatory Authority and a Labor Fund that 
will be used to fund training for Bahraini workers to improve 
their skills to make them more marketable.  The new 
legislation contains components that will modify the 
sponsorship system, making it easier for workers to move 
legally from one employer to another, and in turn encourage 
employers to improve working conditions in order to satisfy 
workers.  The legislation also imposes an annual fee on 
businesses employing foreign workers, an attempt to diminish 
the cost differential between foreign workers and relatively 
more expensive Bahraini workers. 
 
-------------------------- 
Priority Programming Needs 
-------------------------- 
 
¶3.  (SBU) A Bahrain Petroleum Company (Bapco) trade union 
official spoke highly of the cooperation between the 
Federation, workers, media, and Bapco mid-management during 
the salary talks in October and November 2006.  He said that 
pressure from both the inside and outside was effective in 
raising the profile of the issue, leading to a favorable 
outcome.  He said that a new executive order (62) issued by 
the Prime Minister in November 2006 seems to prohibit strikes 
in the oil and gas sector, thereby taking away one of his 
union's tools (Refs B and C).  In light of their inability to 
strike, he asked for advanced training in collective 
bargaining to strengthen the union's hand to protect the 
rights of all workers. 
 
¶4.  (SBU) A Bahrain Telecommunications Company (Batelco) 
trade union leader stated that he and his colleagues were 
very satisfied that legislation was passed by the Bahraini 
parliament prohibiting the firing of a union employee solely 
for his union activities, which he attributed to pressure 
related to FTA ratification.  He said that support is needed 
to strengthen collective bargaining skills.  He also inquired 
about the collective bargaining tools available to hospital 
emergency unit employees in the U.S. 
 
¶5.  (SBU) A General Federation of Bahrain Trade Unions 
official recognized that Bahrain is a pioneer in the region 
in granting workers rights and passing legislation to protect 
these rights.  He said that although there has been much 
union activity in the four years since unions were legalized, 
stakeholders still lack much expertise in understanding and 
practicing their rights and responsibilities.  The federation 
and individual unions need to establish an annual event to 
raise awareness about labor issues and to highlight 
mechanisms available to negotiate with management.  He also 
proposed activities to promote core labor standards. 
 
¶6.  (SBU) A labor specialist at the Ministry of Labor, who 
previously was a federation member, complimented the 
federation and trade unions for their active agendas leading 
the way in the Gulf.  Regarding possible programming needs, 
he said that the Ministry could benefit from best practices 
in educating expatriate workers about their rights under 
Bahraini law.  He also expressed a need for continued 
training of workplace safety and labor audit inspectors as 
the economy, and the need for expatriate workers, continues 
to grow. 
 
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Visit Embassy Manama's Classified Website: 
http://www.state.sgov.gov/p/nea/manama/ 
********************************************* ******** 
ZIADEH