Bahrain is currently working hard to foster new businesses
and attract international talent to the Kingdom. For too long it has been a far
lower-profile destination for expat workers and businesses than its flashier,
better-known cousins like the UAE. Releasing that oil won’t last forever – and
that foreign investment will be key to their future development, Bahrain is
trying hard to attract talent from around the world.
However if local business owners are to be believed, a new
law being introduced could have a significant negative impact on this policy.
Like all the Gulf nations, Bahrain has a flourishing
expatriate population, however recently the costs of medical care for expats
has come under fire. In theory all expat workers are expected to have their own
health insurance policy to cover emergency care if necessary. While standards
of medical care in Bahrain are high, the same care can be quite expensive.
Health insurance is therefore essential – especially to less skilled expat
workers on lower salaries.
However the reality of the situation is often rather
different. The last few years have seen growing problems with expats either
possessing insufficient levels of insurance – or even none at all. In cases
where medical assistance is needed the Kingdom itself often ends up
out-of-pocket when offering medical care to foreign workers.
In a move to eliminate this problem, and ensure that every
resident of Bahrain receives the level of medical care that they need – and at
a price that they can afford – the government is following in the footsteps of
the UAE by making health insurance the employer’s responsibility.
While the movement has its supporters, small businesses in
Bahrain are concerned at the increased costs they will be expected to shoulder.
The work permits required to hire expat workers are increasing in price by
almost 200% and the money will have to come from somewhere. Whether Bahraini
business owners lower salaries to account for their increased costs, or raise
prices to consumers, isn’t clear.
What is quite clear is that the Bahrain Chamber of Commerce
has taken up the torch and is campaigning to over-turn this recent ruling. They
point to the possible negative impact on small and medium-sized businesses in
the kingdom. They also make clear that initiatives like this normally involve a
consultation period; something which has not occurred this time.
While work permits for expats will now be far more expensive
than ever before, even permits to hire Bahraini workers themselves are set to
rise by almost 10% in the coming months.
Expats considering visiting Bahrain for work should
therefore carefully investigate the situation before signing any new employment
contract. Try to ascertain exactly who will be shouldering the costs, should
they become law. Without this some expats could find a nasty surprise if the
costs are somehow passed onto them either by lower overall wages or by salary