These Citizens for Bahrain reports analyse all aspects of the activities of the 2014 Parliament, ahead of the autumn 2018 elections
The last four years have been a challenging period for expat residents, who were disproportionately affected by subsidy reforms, which became necessary as a result of sharply reduced oil revenues. With non-Bahraini residents making up over half Bahrain’s population, it could be argued that cutting subsidies to expats alone could allow for large savings to the national budget. These reforms occurred in parallel with similar measures across all GCC states.
With less public money available to spend, many MPs consistently argued that foreign residents could be a source of additional revenues, while demanding that Bahraini voters be protected from new fees and taxes. This Parliament also sought changes in the law to make job opportunities more favourable to Bahraini applicants as a means of addressing domestic unemployment. However, in some of these cases the government claimed that such proposals violated the constitution and international labour laws which stipulate fairness and equality in the workplace.
In spite of these measures, global expatriate surveys continued to find Bahrain coming out as the favourite nation worldwide for expats, with respondents citing low costs of living, the friendliness of Bahrainis and the suitability of Bahrain for rearing families. Bahrain continues to enjoy significantly lower costs of living than other neighbouring Gulf states.
Subsidy reforms
The aim of these reforms was to reduce government expenditure through reducing subsidies or phasing them out altogether. These reforms began in 2015 with the cutting of meat subsidies. Bahraini families received modest levels of compensation for these cuts. This was followed by gradual phasing out of electricity subsidies for buildings which weren’t the first home of Bahraini families, so again it was primarily non-Bahrainis who were affected, seeing very sharp increases to their utility bills.
After this came sharp cuts in fuel subsidies which affected Bahrainis and expats alike. At the beginning of 2018 GCC states introduced VAT on a small number of goods, a move which proved controversial among locals unused to paying taxes.
Proposed fees & taxes for expats
MPs like Mohammed al-Ahmed championed a proposal which would levy fees on all remittances sent overseas by foreign workers in Bahrain. A further proposal submitted by MPs demanded that every foreigner who owned a car should pay $106 in annual registration fees. However, parts of the government argued strongly against such measures, emphasizing the importance of not overburdening residents. Prime Minister Khalifa bin Salman Al Khalifa stressed: “Bahrain is a country of tolerance and co-existence that respects and appreciates those who live in it and contribute to building it.”
Ultimately, neither proposal made it into law, with Parliament’s own Foreign Affairs Committee describing the proposed vehicle tax as unconstitutional. Insufficient numbers of MPs voted in favour in order for the law to be passed. The pursuit of information-sharing agreements with the US and other nations may also mean that in the future Westerners holding income in Bahraini banks will have to be more scrupulous about paying taxes in their home countries.
During 2018, a new proposal drafted by MPs was under discussion which would force non-Bahrainis to renew vehicle licenses every two years, rather than every five years. Once again the government has argued against such proposals, pointing out that instead of being a revenue-generating initiative, it may increase costs, by forcing the creation of a parallel licensing infrastructure for expats. Parliament Minister Ghanim Al Buainain rebuked deputies, saying: “MPs are saying that they are only coming up with legislation for Bahrainis, but they are wrong because they are here to serve the nation as a whole.”
A number of MPs went even further with a proposal that has surfaced a number of times, seeking to reduce traffic congestion by banning expats from driving altogether, a move which would almost certainly violate Bahrain’s constitution. The Bahrain Chamber of Commerce and Industry strongly condemned this proposal, arguing that it violated the fundamental human right of freedom of movement.
Preference for Bahraini workers and businesses
One of the first measures by the 2014 Parliament was setting up a committee of inquiry into the phenomenon of “free visas”, whereby foreign workers were routinely able to exceed the limitations of their visa conditions and pursue a variety of jobs, potentially displacing Bahraini workers from such positions. MPs followed this up by demanding that the government crackdown on the phenomenon of free visas, thereby reducing the degree to which cheap foreign labour increased domestic unemployment.
Another controversial piece of legislation passed by MPs during 2015 obliged employers when making redundancies to always terminate expat employees instead of Bahrainis, introducing further protections to Bahraini terms of employment.
MPs furthermore sought to make public sector tendering processes and commercial agreements more favourable to Bahraini companies. They argued that this stimulated the local economy, although ministers claimed that this could make tendering processes less competitive. Yet another parliamentary probe in 2015 was set up to investigate the awarding of contracts for public advertizing spaces, which MP Jamal Buhassan claimed had been unfavourable to Bahraini companies bidding for such opportunities.
However, such efforts ran counter to efforts by Bahrain’s government to facilitate foreign investment and the entry of foreign companies into the Bahraini marketplace, particularly through facilitating commercial registration and stimulating a business-friendly regulatory environment. In consequence, despite MPs consuming a lot of effort and parliamentary time on such proposals for favouring Bahrainis, arguably most of such measures either never saw the light of day or in practice only had a negligible impact.