Qatar’s Next Gambit After World Cup? Convincing Expats to Stay

(Bloomberg) -- Qatar has set out to create a more permanent worker population with sweeping labor reforms introduced this week as it winds down a building frenzy for the 2022 soccer World Cup.

Achieving that goal would mark a fundamental shift in the economics of the world’s biggest exporter of liquefied natural gas. Foreign workers account for 95% of Qatar’s workforce and about 90% of its population.

The new rules impose a standard minimum wage applicable to employees of all nationalities and professions -- a first for the Gulf region -- and make it easier for workers to change jobs. Qatar’s Minister of Commerce and Industry Ali bin Ahmed Al Kuwari said the hope is that the revamp will encourage more foreigners, particularly skilled workers, to stick around.

“This is about creating a liberal labor market,” he said in an interview Monday.

“You don’t want people who for whatever reason want to leave their employer, or whose services are no longer required -- you don’t want them to just pack up their luggage and jump on an airplane,” he said.

Qatar Enacts Minimum Wage, Worker Reforms as World Cup Nears

Competition for talent will be healthy for the local market, even at the risk of driving poor performers out of business or pitting them against foreign competitors, he said.

“Companies will put lots of effort into retaining their employees, developing their talents, offering them the right packages,” Al Kuwari said. “This is part of our long-term investment -- an investment in the people, whether they are expats or locals.”

Ending Kafala?

Such sentiment is rare in the Gulf.

All countries in the region have policies that encourage hiring citizens over foreigners. But most hesitate to endorse a more permanent role for expats, with Kuwait even contemplating cutting the size of its foreign population by more than half.

Under a system known as kafala, or sponsorship, the ability of expats to stay is often restricted by their employers. Qatar has faced stringent criticism from human rights organizations for a labor system described as “abusive,” particularly for low-income workers brought in before the 2022 tournament.

Foreign Workers in Limbo as Crisis Tests Gulf Immigration Rules

Qatar’s new package eliminates the need for workers to acquire a document from their former employer in order to switch to a new job. But while switching jobs will now be possible, low-wage workers will continue to live in employer-provided communal housing and remain dependent on food and transportation furnished by companies, likely limiting free access to the job market.

Al Kuwari said he expects an imminent shift in the makeup of the foreign population now that construction projects ahead of the World Cup are drawing to a close. Qatar committed $200 billion to develop infrastructure since it won the rights in 2010 to host the world’s most watched sporting event.

“We are really reaching that stage now, where we’re moving toward a knowledge-based economy,” he said.

©2020 Bloomberg L.P.