Thursday, October 22, 2015

Kuwait Labor Market to Remain Strong

Kuwait's fourth oil refinery on stream

Govt's oil policy based on clear vision
AFTER waiting for more than ten years and obtaining all necessary approvals, Kuwait has finally signed the contract worth $15 billion for building Al-Zour Refinery by the end of 2019. 
Finally, another mega oil project has been approved and is on-stream for completion. It is very important that the construction of the new refinery progresses, as it was postponed more than once. Now that it is on, it is a huge indication that Kuwait is serious about completing its outstanding projects and has finally realized it is time to move forward.
The new refinery is expected to become fully operational by the end of year 2020 with three local refineries of total capacity exceeding 1.2 million barrels per day after closing down Shuaiba Refinery and turning it into an oil terminal
Therefore, the total refining capacity of Kuwait will be close to 2 million barrels inside and outside Kuwait including the refineries in Italy and Vietnam. 
It is indeed good news for the industry as a whole including the commercial arena, traders and small businesses. We must remember that mega projects lead to smaller projects due to which everyone will have work and the commercial activities will be revived. The cash, which will amount to more than $25 billion after taking into account the other refinery project, should be directed to different commercial projects.
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Kuwait plans new terminal as stop-gap for delayed airport expansion

 Kuwait's government is to build a new terminal at the country's international airport that can handle 5 million passengers a year, as the Gulf state seeks a short-term solution for rising traffic before a larger expansion project is ready. 

The new terminal will lift capacity at Kuwait International Airport to 10 million passengers a year, Yousef al-Fouzan, director-general of Kuwait's Directorate General of Civil Aviation, 

It has tendered the project and has set a deadline of Nov. 3 for bidders to respond. Fouzan said construction would take around 15 months to complete, with the new terminal operational at the start of 2017. 

The proposed terminal will bridge the gap until a much larger expansion project at the airport is ready - one which will boost capacity to 25 million passengers a year but which has already been hit by delays. 

Turkey's Limak Holding and local construction firm Kharafi National won the bid in August to build the new terminal at a proposed cost of 1.312 billion dinars ($4.35 billion). 

Growth Partners

GCC rail will 'spur economic growth'

HE the Minister of Transport Jassim Seif Ahmed al-Sulaiti has stressed that establishment of the GCC railway network will not only facilitate faster movement of people and cargo, but also accelerate the region's economic development. Addressing the concluding session of the 19th annual meeting of GCC transport ministers in Doha yesterday, al-Sulaiti expressed hope that work on the GCC rail network would start without any delay. 

He said there was "excellent co-ordination" between the states and they were aware of the importance of the ambitious project and how it would benefit each of them. Al-Sulaiti said every GCC member-state has initiated a number of significant moves and this has helped facilitate better co-ordination that will eventually contribute to the establishment of the network. While recalling the developments that have taken place in the region's transport sector over the past few years, including the establishment of better road infrastructure, HE the minister said the sector has received utmost attention from the GCC leaders all along and similar support could be expected in future for further progress. 

Besides the development of highways and diversification of transport options, all future developments in the sector would contribute to the faster growth of regional economies in the coming years, he said. Referring to steps taken by the member-states since the meeting of GCC transport ministers in 2003, HE al-Sulaiti said the leaderships of each country was well aware of the positive impact the railway network would have on their economies, once completed. 

Al-Sulaiti said the studies carried out since then have found that the project would be beneficial to the people as well as to the economy of the region. At the 2009 meeting, the leaders agreed to go ahead with their detailed studies, which included - among other issues - the engineering designs and possibility of establishing a GCC railway authority to supervise the entire project. A committee consisting of the transport ministers of the member-states has been assigned to intensify the work as early as possible, incorporating the best international standards, practices and specifications, the minister noted. 

He also reminded the gathering that the development of maritime transport was equally important as it was in line with the requirements of the region's international trade. The minister said all recommendations of the previous meeting held in Kuwait last year have been deliberated upon and priority areas have been shortlisted. Speaking later, GCC secretary-general Abdullatif bin Rashid al-Zayani said the member-states should do necessary follow-up on the Gulf railway project as it would have a considerable bearing on the economy of the entire region. 

Kuwait consumer sector remains robust despite mild moderation - NBK Economic Report
KUWAIT: The consumer sector continued to grow more rapidly than the rest of Kuwait's economy despite some slowdown in growth. Household debt growth remained in the double-digits, though it has moderated over the last twelve months. Consumer spending growth also maintained a robust pace, driven by good sentiment and healthy growth in household income. Indeed, employment growth has been improving over the last 12 months, supporting the consumer sector. While overall expatriate employment has been strong, there was some weakening in skilled expat hiring over the last 12 months.
Household's debt growth stood at 12.5 percent year-on-year (y/y) in July, mostly unchanged from the pace a year ago. Personal facilities excluding credit for the purchase of securities rose to KD 10.2 billion. Most of the growth has been in installment loans, which largely finance home acquisition. Installment loans grew by 15 percent y/y in July, with the pace picking up slightly from a year ago. This most likely reflects the role strong demand for housing plays in driving household debt growth. 
Employment among Kuwaiti nationals has been picking up slightly over the last 12 months, providing some additional support to the sector. New hires among Kuwaitis over the 12 months ending in June 2015 are estimated at 21,900 compared to 20,100 a year before.Net employment growth has been mostly steady at around 3 percent y/y.
Hiring among skilled expatriates appears to have slowed somewhat over the last 12 months, especially among the more highly skilled. Employed non-Kuwaitis with at least a secondary education rose by 8,600 during the 12 months ending in June 2015, down from 15,000 a year before. The weakness was more notable among those with a university education. By contrast, total expatriate employment in the private sector continued to see strong growth, rising by 7.5 percent y/y, implying robust growth in the unskilled segments.

Changing Labor Market Dynamics

Kuwait deports 20,000 expats in nine months

Manama: Kuwait has deported 20,000 expatriates in the first nine months of the year for their non-compliance with the residence and labour laws.
“Those who were expelled from the country are from various nationalities and included expatriates without jobs or doing odd jobs, beggars and people implicated in the selling of alcoholic beverages, managing flats for suspicious activities or engaging in immoral acts,” security sources told Kuwaiti daily Al Seyassah. “The public order department has pledged a zero-tolerance towards all violations of the law and involvement in illegal or immoral activities.”
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Around 7,000 other expatriates, men and women, will be deported as soon as the paper work regarding their situation and their sponsors is completed, the sources added.
“They are in the police custody now and their sponsors have been called to pay for their return tickets and settle all pending issues with their employers. They are expected to be deported within days,” the sources added. 
However, some legal experts said that the security action should not be confined to expatriates staying illegally in the country, but should be extended to include those who traded in visas and exploited the system to take advantage of the situation.
“There needs to be strong action to tackle the roots of the problems, and not the results,” they said, quoted by the daily. “Some expatriates have done nothing wrong and they are in fact the victims of their sponsors. Some of them arrived in Kuwait, secure they have a job. However, they were shocked to discover there were no jobs and the companies mentioned in the arrangements before their arrival were fictitious and did not exist. Those who lied and abused the visa system should be brought to justice, particularly that the minister of social affairs and labour has often said there were bogus companies and threatened to name and shame the people behind them,” they said. 
In July, Minister of Social Affairs and Labor Hind Al Subaih announced the uncovering of 150 companies that did not exist on the ground.
The minister said legal measures were being taken against the companies in addition to the 60 other companies discovered earlier.

GCC unemployment rate to increase from 12% to 16% by 2020 

Unemployment across the oil exporting countries in the region including the GCC is expected surge as governments are poised to cut spending to cope with rising fiscal deficits, according to the IMF's regional economic outlook. 
In the GCC, excluding the UAE, more than 2 million nationals are expected to join the workforce by 2020. If private sector job growth were to follow past trends, and public sector employment growth is consistent with the current fiscal projections, more than half a million job market entrants will end up being unemployed, in addition to the 1 million who are already out of work. 

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"The aggregate GCC unemployment rate would increase from 12 per cent to 16 per cent. Clearly, if more fiscal adjustment were to take place, with some of it in the form of reined-in public sector hiring, unemployment rates would be even higher," said Masoud Ahmad, the IMF's regional director for Middle East and Central Asia. 
In the non-GCC region, about 8 million people will enter the labour force over the next five years. Under current growth projections, and using historical growth -- employment elasticities, the average unemployment rate would increase from 14 per cent to 15.5 per cent. In practice, the increase could be much higher, because cash-strapped governments will not be able to maintain the pace of public sector hiring. 
Limited direct employment 
Clearly, the private sector will have to take over from the public sector as the main source of job creation. However, the expansion of the private sector and the diversification away from oil that are needed to absorb the growing workforce have so far proven elusive. Though some progress has been made, most economies in the region are still deeply dependent on the capital-intensive hydrocarbon sector, which generates limited direct employment. 
Additionally, the private sector itself is highly reliant on government spending and needs to become self-sustaining through increased competitiveness in other markets including exports. Creating incentives for nationals to move to the private nonhydrocarbon sector, improving skills, and making those skills more relevant to the private sector by improving the quality of education are crucial in this respect.

Tuesday, October 13, 2015

Are changing labor laws silencing the teachers’ voice?

Many states have made significant changes to the laws governing public sector labor relations in recent years, changes that are already impacting teachers unions’ efforts to maintain membership. Most of the controversy in Wisconsin – and other states undergoing similar labor retrenchment – has centered on economic consequences such as government spending and worker wages. Yet, states’ ongoing efforts to redesign public sector labor law may prove even more consequential for the political power and influence of public employees unions in the years ahead.

As his critics are quick to emphasize, Gov. Scott Walker weakened collective bargaining rights for the public employees whose unions have historically been strong supporters of the Democratic Party (e.g., teachers and state, county, and municipal employees). This change leaves the state’s more Republican-friendly police and firefighter unions intact, showing that politicians believe union-friendly labor laws help enhance the political effectiveness of union interest groups. In a forthcoming article in The American Journal of Political Science, Patrick Flavin (Baylor University) and I examine just how instrumental one union-favored policy—mandatory public sector collective bargaining laws enacted in the 1960s and 1970s—have been to union efforts to mobilize their supporters in electoral politics.

In particular, we looked at data on the political participation of public school teachers from 1956 to 2004. During this time period, 34 states adopted mandatory collective bargaining laws for teachers, which enabled us to compare the political activity of individual teachers before and after their unions operated with the benefit of a mandatory bargaining law. Substantively, our quantitative analysis found that the effect of a teacher working in a mandatory bargaining law environment significantly influences his or her likelihood of participating in politics (e.g., campaign contributions, volunteering, attending political meetings).  The big surprise is that this effect of the bargaining law environment is greater than the effect of a teacher’s household income, education, and union membership status. We further identified increased contact (outreach) from organized groups (i.e. teacher unions) seeking to mobilize rank-and-file teachers as a likely explanation for this finding.

What specifically about mandatory bargaining laws helped catalyze political participation among teachers? For one thing, the onset of collective bargaining in the public sector conferred an assortment of benefits (often formal and contractual) to teacher unions at the organizational level, benefits that in turn made it easier and less costly for unions to focus on recruiting rank-and-file employees to participate in politics. To mention just two small examples: it is quite common to find collective bargaining agreements (CBAs) that provide teachers unions unlimited use of the school district’s internal mail service (the equivalent of congressional franking privileges). Moreover, many CBAs also subsidize the local union president’s salary so she or he can focus their efforts on union business. In other words, some school districts effectively subsidize the equivalent of a full-time political activist for the head of the local teacher union interest group.

Our findings speak directly to the growing debate about how to structure American public sector labor relations. Traditionally, unions have been relied upon as an antidote to upper-class bias in American politics, with many scholars pointing to the decline of unions as a major factor in the growth of representational inequalities between the working class and economic elites. As politicians seek to overhaul public sector labor laws, it is a strong possibility that membership and the political influence of labor unions will decline even further.

On the other hand, critics of public employee unions argue that they are the ultimate special interest group – uniquely advantaged in the public policy making process by being afforded “two bites at the apple.” That is, public sector unions are able to lobby elected officials at both the ballot box and the bargaining table. For those who believe public employee unions have widely contributed to the current fiscal crises (namely, pension obligations) facing many state and local governments around the nation, the finding that these two bites at the apple (collective bargaining and political activism) work in concert with one another will likely confirm opponents’ convictions that the time to rein in public employee unions is long overdue.

Also, while it makes good sense that unions are concerned about losing favorable labor laws, a longstanding body of research has shown that the politics of policy retrenchment often differ significantly from the effects of new public policies themselves. That is, taking away collective bargaining rights and other union-favored labor laws may not have as powerful of an effect as granting those rights did in the first place. This argument will be put to the ultimate test in the upcoming U.S. Supreme Court case, Friedrichs v. California Teachers Association, which will decide whether the U.S. adopts a national “right-to-work” regime for all state and local government workers. Interestingly, in 1995, Indiana eliminated the right of teachers unions to charge agency fees to non-members. Although the state’s major NEA-affiliate (ISTA) did not grow rapidly in the decade that followed agency fee elimination, neither did it see its membership disappear. What this portends for other state and local affiliates should the Supreme Court rule against the unions in Friedrichs is difficult to say.

In the end, irrespective of how one views all of these recent changes in public sector labor relations from a normative perspective, what’s clear is that even when it comes to the arcane intricacies of public labor law, these policy choices can often have enduring implications for interest group organization, public workers’ political participation, and, ultimately, the distribution of political power across American society.

Disclaimer : Following Article Come From Brookings

Wednesday, October 7, 2015

Turkish power firm denies violating labor laws.

Turkish power firm “Karpowership,” a contractor with state-run EDL, said over the weekend that it was operating in compliance with Lebanese laws, in response to a statement issued Friday by the Labor Ministry accusing the company of registering over 50 Turkish professionals under fraudulent job titles. “Karpowership is operating in compliance with Lebanese laws and the presence of Turkish professionals in Lebanon is legal. They have entered Lebanon in a legal manner and were registered under the appropriate job titles following professional legal advice” the statement said.

The statement added that the firm had no bad intentions behind the mistake that occurred while registering its employees.

“We were keen to increase power generation this year which prompted us to develop the role of employees in a bid to meet the requirements of our operations and secure power supply for the Lebanese electricity network,” the statement said.

The Labor Ministry Friday accused “Karpowership” of registering more than 50 Turkish professionals as cleaners.

In a statement, the ministry said that 54 Turks were using forged job titles as porters and cleaners, when in fact they were working as technical engineers and experts with the Turkish power firm.

The statement did not say why the company lied about the job titles, but it is common for employers in Lebanon to cheat on paperwork to limit their fees.

The firm works on a power-generating ship off the coast of Zouk Mosbeh, just north of Beirut.

The ministry said it fined each of the 54 individuals and is in the process of filing a complaint to send to the public prosecutor in order “to question every person that had a role in this scandal, including the company’s Lebanese representative.”

On the other hand, the statement issued by “Karpowership” said that the company quickly rushed to settle the issue by changing the workers’ job titles before any legal action was taken.

“Karpowership paid all of the fines imposed by the Labor Ministry also,” the statement added.

It also said that “Karpowership” is proud of its active role in the Lebanese economy by providing job opportunities for 200 families.

Disclaimer :- Following Article Come From AlBawaba

Sunday, October 4, 2015

How Kuwait Going To Manage It's Cultivate Dependence On Foreign Labor?

Kuwait and other Gulf countries rely on foreign labor to run local economic sectors. According to a report issued by the Manpower Public Authority in Kuwait, the total number of migrant workers in Kuwait by mid-September stood a little above 1.5 million employees and workers, divided between the private and the public sectors, with the private sector's share reaching up to 96%.

The foreign workforce is distributed among the various economic sectors as following: transportation and warehousing (5.4%); manufacturing (9.7%); agriculture and fishing (5.1%); power, gas and water (0.3%); finance, insurance, real estate and business services (42.2%); building and construction (13.3%); other activities (1.2%); social and personal services (15.9%); and mining and quarries (0.9%).

The percent distribution indicates that the service and commodity distribution sectors combined make up 70% of the foreign workforce. Other sectors such as agriculture and fishing — which do not account for a significant share in the country’s GDP — employ 80,000 workers. Such distribution of foreign labor highlights the gap in the economy and the prevalence of the service sector and the tertiary ones.

The data also underlined the low level of education as well as the lack of working skills among the majority of migrant workers, as 42.5% of them are underqualified, 32.8% have low qualifications, 18.3% with moderate qualifications, while only 6.4% possess high qualifications. These facts should prompt employers in Kuwait to review the current situation of the labor market and look for means and mechanisms to reform it.

Moreover, do economic requirements really justify this high number of foreign workers knowing that it is possible to use technology to run the business in many sectors? Not only that, but the present sectoral distribution gives rise to many questions concerning the economic efficiency of this foreign workforce as it is mainly based in the sectors of personal services, commodity distribution, as well as hospitality services or agriculture and fishing.

These sectors employ a larger workforce compared with the one employed by vital and primary sectors. For example, the mining and quarries sector, which is responsible for 49% of the total GDP, employ less than 1% of foreign workers, while the agricultural and fishing sector has 5.1% of these workers even though its total share of the GDP is no more than 0.3%.

The rentier nature of the economy explains such distribution of foreign labor as demand on services is increasing along with the companies that employ underqualified and unskilled migrant workers. Nearly 600,000 migrant workers are employed by families and households, indicating that the total number is estimated at 2.1 million. Meanwhile, government officials reiterate solutions such as rationalizing foreign recruitment and stress the importance of setting higher educational and professional standards for migrant workers.

However, efforts should be aimed at reforming the labor market so as to boost the national workforce, which currently represents 17% of the total labor force in Kuwait. It is also a fact that most working Kuwaitis are either civil servants or employed by the public sector. The government is trying to motivate Kuwaitis to work for the private sector and has established a system to subsidize the salaries of these employees through a new law that imposes an annual tax of 2.5% of the annual net profits on Kuwaiti companies listed on the Kuwait Stock Exchange. This government plan is funded by the treasury. Furthermore, over 50,000 Kuwaiti workers in the private sector benefit from this workforce support program, with the government allocating nearly 5 million Kuwaiti dinars ($116 million) per month for these workers.

However, these programs and attempts to reform the labor market and its systems lack determination and seriousness, since many interests and influential figures are hindering this reform process, in addition to a large number of fake companies that recruit foreign workers illegally and receive tributes from them, in a circumvention of local laws and international treaties. For these reasons, it is necessary to enforce the law, put an end to manipulation and limit the actual needs of economically efficient institutions. Raising business efficiency and using modern technologies are also instrumental in order to limit the need for manpower or raise the educational and professional standards of the workforce needed. As for developing the national labor force, it requires enhancing the educational system and according more importance to vocational education.

Can we expect real changes in the upcoming years after it became evident that none of the goals set in previous development plans was achieved, the latest being the 2010-2014 development plan? Human development goals will remain beyond reach as long as no crucial decisions were taken to reform the educational system and adjust the economic system as to promote modern development approaches and curtail rentier economy. Can the fall in oil prices and oil revenues lead the government and the National Assembly to adopt legislations amending financial policies as well as employment policies in the public sector and the employment procedures of foreign labor in the private sector? Changing that reality demands a brand-new economic philosophy, i.e., the implementation of policies that would seem unpopular at first but prove fruitful later on.