Abolishing sponsorship system critical to altering demographics.

Ongoing COVID-19 pandemic has highlighted the urgency of addressing the demographic imbalance in Kuwait, where the number of expatriates exceed citizens by 3 to 1. This population disparity is caused to a certain extent by the large number of illiterate, unskilled marginal workers who in most cases are single-males, which increases social problems and skews the gender parity in the country.

It should not be forgotten that the issue of the ‘Beidoun’ represents another flaw, and it must be confronted and found solutions to it. It is an issue that has been exacerbated by government reluctance to take a decision regarding it. There is no doubt that the challenge of the age structure of citizens in which the percentage of those under the age of 25 About 53 percent represent the state’s biggest challenge, especially with regard to finding job opportunities for them and providing various services such as education, health and housing, issues that cannot be dealt with without facing the imbalance in the demographics, and the existence of an efficient, productive and dynamic labor market.

The pandemic demonstrated the enormity of population imbalance in Kuwait, the corruption that led to it, and the indifference of authorities in tackling this issue over the years,  despite it being a priority in various five-year development plans. Lopsided nature of the population was once  highlighted in the last national plan (2015-2019), which indicated that one of the most important current challenges in the field of human development is “the absence of a clear vision on a population policy.”

Our failure to address the imbalance in the demographics stems from various factors, including the absence of decision-making at the top level, the entire economy philosophy, our way of life, the nature of proposed solutions and the laxity in implementing them. Given the present wide population disparity, any non-radical solution to this issue will at best be only temporary.

In most discussions on finding solutions to the population problem, the one factor that is usually left out is the current ‘sponsor system’, which undoubtedly is a major reason for the increase in number of expatriates. The prevailing sponsor system has led to unscrupulous sponsors undermining the system and engaging in visa trade for illegal gains, which is a main reason behind the presence of a large number of illiterate and unskilled marginal workers who lack experience and do not have any appropriate educational or professional skills.

Increase in the number of these unproductive workers has caused severe economic losses, social problems and pressure on services and infrastructure of the country. Any radical treatment to solve the problem of population balance must include eliminating the ‘sponsorship system’.

Abolishing the sponsorship system has many economic benefits, which I will summarize as follows:

First: Eliminates the residency trade and reduces residency violations.

Second: Addresses distortions in the labor market with regard to salary disparity between Kuwaitis and foreigners, thereby raising the cost of expatriate labor to its true cost.

Third: Motivate citizens to work in the private sector, which encourages an increase in demand for their employment

Fourth: Improving the quality and efficiency of national human resources and the skill-sets they possess.

Fifth: Raises efficiency of the overall economy and increases the value of the gross domestic product.

Sixth: Maximizes state revenues and reduces government expenditures.

Seventh: Encourages foreign investment and transforms the citizen from a sponsor to an active partner in various economic activities.

The abolition of the sponsorship system will make the labor market more dynamic, efficient and competitive due to labor movement and freedom of movement, which will inevitably lead to a reduction in the salary gap between Kuwaitis and expatriates, and thus the comparison between them will be based on productivity and efficiency, not on the lack of salary.

Some fear that the abolition of the sponsorship system will increase the risks of expatriate labor use and employment churn; this may be true, but these risks will be a motivation for relying on the employment of Kuwaiti workers, and thus it could contribute to addressing the demographic imbalance. By abolishing the sponsorship system, interest in hiring and training of Kuwaiti workers will increase in order to ensure their retainment.

Abolishing the sponsorship system will also improve Kuwait’s global image, which is criticized from time to time due to the implementation of this system. The most recent criticism of the ‘sponsor system’ was made in the ‘Twentieth Report on Human Trafficking’ by the US State Department’. Despite improvement in Kuwait’s position to the second group, the report calls for a reconsideration of the sponsorship system. In addition, the International Labor Organization has demanded that the Gulf Cooperation Council (GCC) states, including Kuwait, cancel this system, which it describes as inconsistent with international labor standards. A number of human rights organizations have also accused this system as a violation of human rights.

There is no doubt that Kuwait has taken many important and serious steps in improving the conditions of expatriate workers and ensuring their rights, including permitting movement from one workplace to another workplace, but only on the condition of the sponsor’s approval. However, there are many more measures that could be taken to improve the working condition and rights of expatriates.

Since 2008, the Kuwait Workers Union has demanded the abolition of the sponsorship system. In the same year, Attorney Abdullah Al-Roumi submitted a parliamentary proposal for this purpose in 2009, but it was not taken into consideration. The Ministry of Social Affairs also announced its intention to cancel the sponsorship system in the same year, but again to no avail. In 2018, MP Dr. Khalil Abel made another proposal that was also rejected by the House Legislative Committee.

It is worth noting that the Arab Gulf states are among the few countries in the world that continue to use this system, although the State of Qatar has begun to take several measures towards its abolition.

Addressing the demographic imbalance must be made based on ‘economic development’ aspects rather than mere ‘computational’ aspects, such as residency permits for some age groups or setting quotas for the nationalities of expatriates. These are temporary and ineffective proposals that are impractical and harmful to the economy and to the higher interests of the country, as well as not being based on scientific methodology. (For example, the bases for determining nationality quotas).

A new proposal for a law “regarding the demographics and organizing the recruitment and insurance of workers from abroad”, which was recently submitted by the Speaker of Parliament and a number of parliament members, should be used as an entry point to abolish the ‘sponsor system’ and to set up an alternative system.

The abolition of the sponsorship system has become an urgent economic, social, and humanitarian necessity, which would raise Kuwait’s civilized reputation, and contribute directly to addressing the demographic imbalance. This is an issue of national importance and it can no longer be ignored or delayed.

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