Employment Opportunities, Labor Laws in Kuwait

Kuwait Demographic

Kuwait is pearl of Middle East. Kuwait is third largest producer of oil in OPEC countries. Kuwait has very well fended off storm of Financial Crisis. Economy has slowed down during last three years. Kuwait is progressing very well. Kuwait’s Development Plan which is under implementation is very big project and will take Kuwait to the new highest of development. This does not mean Kuwait will suddenly start growing at 9 or 10 percent per annum this means Kuwait will continue to grow slowly but economy will be stable and when this project will be completed it will write a new chapter in Kuwait’s growth and development.

If we look at last 6 to 7 years of demographic changes in Kuwait, the Kuwaiti Population has increased around 3 percent per annum and this is stable, in the near future the Kuwaiti population will continue to grow at the same rate.

The number Kuwaitis employed is increasing at around 6% per annum, the percentage of women in work force is increasing steadily, i.e. it has increased from 41% to 45%., similarly the Kuwaiti’s working in private sector is also increasing. The Kuwaitis working in Private Sector has increased from 31,500 in 2005 to 80,100 in 2011. One of the important shifts is number of women employed in private sector; this has increased from 39% to 51% in last 5 years.

The other big contributor to the Kuwaiti population is non-Kuwaiti work force or expatriate work force. Non Kuwaiti constitutes almost 68% of total population. There is no major shift in this percentage over last five years. Kuwait is trying very hard to reduce the non-Kuwaiti population but this may not be easy for oil rich tiny nation. Even though non Kuwaiti population growth is slowed down over the period, in fact working non- Kuwaiti population has reduced in 2009 and 2010 even there is marginal increase in non-Kuwaiti population.

124,400 non-Kuwaitis are employed in Public sector, 1,113,300 are employed in Private sector. The real challenge is 566,900 employed in domestic sector. Those who are working in domestic sector are marginal labor, this percentage is really high and Kuwait government is trying to reduce this number. Domestic sector does not come under the labor law. There are many issues and challenges facing the ever increasing demand of skilled manpower in growing economy. To manage and streamline demands of modern time Kuwait has passed new labor law.

Kuwait New Labor Law

Kuwait has passed new labor on 10^th February 2010. This is remarkably different than old labor law and also very different than other GCC countries. New labor law protects interest of employees as well as employer. This is different on many counts and good for the employees.

· Notice Period – Either side will have to provide 90 days’ notice period.

· Indemnity – For first five years 15 days for every completed year after that 1 month per completed months.

· If employee leaves within 3 years, he will not get any indemnity, if he leaves between 3- 5 years he will get 1/2 of the indemnity, if he leaves after 5 years then he will get 2/3^rd of the indemnity, he will get full indemnity if he leaves the company after 10 years.

· The employee will get 13 days of paid holidays.

· 30 days of paid annual leave, paid before going on leave.

· Sick leave – 15 days fully paid, 10 days – three quarters of the salary, 10 days – half of salary, 10 days - quarters of the salary and 30 days without paid.

· 21 days paid leave for Hajj, 3 days paid leave for death of first and second degree relatives,.

· If contract is terminated without fulfilling the contract, then employee has remedy to approach to labor department.

Special Provisions for Women

· Women should not be employed beyond 10 PM.

· Women will get 70 days maternity leave and can avail another 4 months without pay.

· After child birth she can take 2 hours break for feeding the child.

· 4 months for Muslim women during Mourning period after death of her husband.

Public Authority for Labor

Public Authority for labor will be established under this law. This new Authority will be responsible for recruitment of expatriate workers as per the requirement of the employees.

Employers are not allowed to recruit expatriate employees without taking prior permission for the authority.

This authority will be the new corner stone in the development of manpower in GCC countries. This will reduce the exploitation and cheating by the employees and ease the transfer of employees from one employer to the other.

The authority will work towards streamlining the manpower needs of the employees and will stop Visa trading. Visa trading is very important reason of the marginal workers and high number of domestics in Kuwait. According to this law employee can can recruit an expact without providing him job.

Effect of New Labor Law on employment opportunities

This is a significant development in labor law. This is very different than traditional labor law of G.C.C. . This is designed to stop exploitation of the expatriates. With incorporation of new public authority for labor, it will stop Visa trading which the main reason for increasing number of marginal labor in Kuwait. Over the last few years even though cost of living has gone up significantly, the real wages has come down. The changes in the law will make visa trading difficult and reduce the marginal labor significantly. This will reduce human trafficking.

Visa trading has become a major cause of concern for authorities, this has resulted into exploitation of expat labor that came here with dream job after paying huge amounts, and unfortunately these dreams became sore after coming here. This ultimately results into increased crime rate and illegal businesses.

Nationalities under Ban

Presently six nationalities are banned in Kuwait; these are Pakistan, Afghanistan, Iran, Iraq, Syria and Lebanon. These nationalities are banned for new Visa, because of security threat. They are not issued any kind of Visa including new Family visa, new visit visa, and new commercial visa, no exceptions are allowed.

No new visa is issued even for Bangladesh; there are many restriction on Bangladesh visa and those already working in Kuwait. Transfer of these visas is also restricted. This has reduced significant number of Bangladeshi expats in Kuwait.

Employment Opportunities in Kuwait

Kuwait has remained very bright spot in the good employment opportunity. Even in the worst financial crisis it has not been much affected. Even though Kuwait remain slow, it has really done well. Kuwait is third largest oil producer of OPEC with oil significantly above the 100 USD per barrel has improved the financial capability of the Kuwait. Kuwait has started implementing Development Plan from 2010. This development plan is designed to transform Kuwait into Financial and Trading hub. Many new projects are being implemented to achieve this objective. Significant investment is being made into the development of new infrastructure. Total cost of the development plan is around 120 Billion USD. Apart from this major expansion work is being carried out in Oil and petroleum sector. Oil and petroleum sector will see huge investment of 30 billion USD. These investment will be made into new refinery project and up-gradation and clean fuel project of two other refineries. This will take a big leap forward in oil sector.

Kuwait is developing new infrastructure to diversify its economy into Knowledge Economy. The new airport expansion and financial district will make Kuwait into financial hub for the world. This will increase Kuwait’s importance as financial capital of GCC. There is major opportunity in global financial sector, and this financial district will play a major role in developing Kuwait into major financial center for MENA region.

This development plan will create a niche as a modern day bustling business center.

Job Opportunities in Kuwait

In the changing environment and ever changing expertise needs new opportunities will be needed. In this regards Kuwait will see long term needs of professionals. Few of the professions which will remain in demand are as follows.

· Oil, Gas and Petroleum – With new refinery and up-gradation of existing one new man power needs will arise. Initially for 4 years it will be erection and commissioning and afterwards expertise to run and maintain the business line. Erection and commissioning may see additional 3000 peoples employed and after completion according to government statement this public sector will recruit around 3500 engineers, apart from this many more services will be outsource so over all it may see the additional manpower of around 7000-10000 will be required over the period of time.

· Healthcare – Doctors, Pharmacist, and Support Staff- Government has started upgrading its facilities and new facilities are also under construction. Over the next five years present capacity of the government hospitals will be doubled. It is add up another 7000 beds minimum to government hospitals apart from this private sector is not far behind the in building new facilities. This is lead to massive recruitment drive from government and private sectors in Healthcare sectors.

· Financial Sector – Even though this is most effected of all sector during financial crisis and still suffering from the aftershock will be one of the most important sector to rebound. With new offshore financial center being developed under development plan will cater to growth and development of this sector. Financial sector is one of the most vibrant and happening sector before financial crisis. There is wealth in this country, this wealth needs channels for further development this need exist and when people has money expertise and institutions will come up to cater the needs of the people. This will make this sector again vibrant over the period of time.

· Construction, Water and Electricity - These are ever green sector and they will remain robust because of new infrastructure projects and housing needs. These sectors will continue to grow and new manpower will be required to manage these sectors.

· Marginal Labor – This is one of the sector which will not grow fast enough because private sector visa are presently not being issued, new visa are only issued for the government projects. Even though there are many projects are coming but all these new visa will be issued for these projects based on the real needs of projects, this will reduce the exploitation of expats and ultimately improve living conditions of expat workers. This will also improve the status of the Kuwait as dream destination for expat workers.

Why do I love Kuwait?

Kuwait a dream destination – Kuwait is tiny Muslim country with population of 3.69 million. It is one of the best democracies in MENA region. The present parliament is dominated by the Islamic MP’s. Even though it is traditionally conservative country it has no restrictions and when one looks at Kuwait, it is truly a cosmopolitan state with multicultural society. In this cosmopolitan state all cultures, religion and ethnicities are tolerated and treated equally. Drinking is not allowed and so are pubs and disco.

The situation of law and order is very good and city state remains quite throughout the years where Women can drive alone in mid night without fear. I have seen single women driving on roads whole night and they feel safe; this feeling of safety which cannot get in the cities like Delhi, Mumbai and London, Washington, where crime rate is much higher than Kuwait.

Government is making all efforts to make life easy for all citizens; in its efforts with new labor law salary must be deposited into bank account on every month on specified date. The bread is subsidized and so are many other commodities. One of the best things is cheap oil. To keep watch on price rise and inflation government regularly keep tab on Co-operative societies prices, so that there is no extra burden on citizens.

No one goes Hungry – Kuwait is known as one of the most generous in taking care of the poor across world. Its contribution in this sector can summarized as below. Specially during Ramdan , the Holy month of fasting Government and Private Sector organizes Food at every masjid and during this time it feels really nice when no one goes hungry. But this is not only the Ramdan when people see the generosity of Kuwait, but around the year such projects are carried out to reach as many needy people as possible. These contributions towards the human needs definitely will help the Kuwait grow and Develop for long time. When these people hungry prays to their Lord, Allah the almighty who is ALL Knowing and All Listening to fulfill the needs of the one who fulfilled his hunger definitely Most Merciful listens to it and accept these prayers.

Kuwait in Development Financing

HUMANITARIAN AID, 2009: US$34m Total Aid, 2009: US$221m

HUMANITARIAN AID PER CITIZEN, 2009: US$11 Total Aid Per Citizen, 2009: US$74

Since 2000 Kuwait has contributed US$221 million in humanitarian aid, making it the fourth largest non-DAC donor in this period

Palestine/OPT was the largest recipient in 2009, with a donation of US$34 million, and has featured in the top three, three times since 2000

In 2008 Kuwait gave US$80 million to the World Bank’s multi-donor trust fund for Palestine/OPT, the largest contribution to the fund to date

Kuwait is the third largest contributor to IFAD resources (following Saudi Arabia and Venezuela) among members of the OPEC group (List B) of IFAD’s member states. Kuwait contributed US$8 million to the 7th Replenishment of IFAD’s Resources in 2005, bring the country’s total contributions up to US$176 million (including Kuwait’s contribution to the Special Programme for Sub-Saharan Africa). This has helped IFAD increase its investment in rural poverty reduction by 10 percent per year to US$2 billion over the period 2007-2009.

IFAD, with the support of Kuwait and its 164 Member States, has gone a long way in helping the neediest and least developed countries to tackle extreme poverty and hunger. These include the 55 member countries of the Organization of the Islamic Conference (OIC), in which IFAD has financed 333 projects for total of US$4.38 billion. In fact, 43 percent of IFAD’s loans and grants have gone to OIC countries. IFAD works closely with OIC and Arab financial institutions, such as the Arab Fund for Economic and Social Development and the Islamic Development Bank. Some 110 IFAD-supported projects worth a total of US$5.2 billion are co-financed by these partners.

Cooperation between IFAD and Kuwait has also helped sharpen IFAD’s approach and enhance the impact of its projects in the Near East and North Africa (NENA). By December 2007, IFAD’s had invested in 106 projects in the NENA region through soft loans and grants in excess of US$1.3 billion to the benefit of more than 30 million rural poor people.

UNDP thanks Kuwait for generous contribution for flood affected areas in Pakistan - UNDP expressed its gratitude to the Government of the State of Kuwait for contributing USD 250,000 in response to the international efforts to assist Pakistan cope with the devastating flood that hit the country this year.

New Voluntary Contribution from Kuwait - During the meeting, Ambassador Razzooqi handed over a cheque for USD 200,000 in an annual gesture of voluntary support and recognition of IOM's global humanitarian activities.