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Labor Standards and Labor Market Flexibility in the Middle East: Free Trade and Freer Unions?

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Abstract

This paper examines how two, potentially opposing trends—pressure to adhere to international labor standards and movement toward greater labor market flexibility—have affected labor market characteristics in the Middle East. Focusing on 13 countries, the paper presents indices of de jure and de facto labor flexibility and standards in the region. The paper makes two main contributions. First, it develops a typology of post-independence Middle Eastern political economies based on oil dependence and political regime type (including oil monarchies, low-income republics, and low-income monarchies) to explain widely divergent sub-regional trends in labor flexibility and standards. Second, it argues that different actors have spurred changes in labor flexibility and standards in distinct sub-regional political economy groupings. In the low-income countries, the state and domestic business were most instrumental in driving increased flexibility, although unions were able to win concessions in countries where the political system permitted some voice for labor. In the oil monarchies, international pressure, particularly through negotiations over trade agreements with the USA, spurred a trend toward increased labor standards, while domestic programs to indigenize the workforce account for a trend toward decreased flexibility.

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Notes

  1. We focus on Arab countries in the Middle East and use the terms “Arab world” and “Middle East” interchangeably, although non-Arab countries such as Iran and sometimes Israel and Turkey are considered part of the region. Based on membership in the Arab League, the Arab world includes countries ranging from Mauritania to the west and to Iraq in the east and from Syria and Iraq in the North to Yemen and the Sudan in the south. We cover North Africa only as far west as Morocco and also exclude the Horn of Africa which is not normally considered part of the Middle East. Palestine, Sudan, and Iraq are not covered here because of their internal strife and/or occupied status.

  2. The UAE recently shifted to “moderate” oil dependence, which largely reflects the growing importance of financial services and other related sectors in the Federation’s economies.

  3. The negative economic and political effects associated with oil dependence, including stunted industrial development and authoritarian rule, are not inevitable (Hill 1992; Luong and Weinthal 2010; Smith 2007).

  4. Until recently, Jordan was less industrialized than the other non-oil and low-income economies. In comparison with Morocco, the other non-oil monarchy in the region that has a much longer history of industrialization dating back to the colonial period, the union movement is relatively docile in Jordan.

  5. See Botero et al. (2004) on the importance of colonial legacies on labor legislation in post-independence developing countries.

  6. The two major exceptions are Lebanon, the only quasi-democracy in the region, and Libya, which is based on Muammar Qaddafi’s peculiar brand of personalistic rule. Given their deviant status, we do not include these countries in this analysis.

  7. Authors’ interviews with a number of trade unionists between 1987 and 2000 in Egypt, Jordan, Morocco, and Tunisia revealed that employers commonly forced workers to sign blank resignation letters at the time of hiring, falsely stating that they had received their severance entitlements, in order to evade labor regulations. Employers were also known to bribe labor inspectors to underreport the number of employees at their firms, reducing their mandatory insurance contributions and impeding unionization where the law specified a minimum workforce size for the establishment of a union.

  8. Nonetheless, the extent of political freedoms in the non-oil monarchies should not be exaggerated. In both countries, governments had to rely on interference and repression, rather than a loyalist party–union symbiosis, to achieve the control they desired, and they did so extensively prior to political liberalization in the early 1990s. Furthermore, the Jordanian and Moroccan monarchies retained the power to ignore legislative decisions, dismiss the assembly, and/or issue important policies by decree.

  9. For a description of how these indices are constructed, see Stallings (this volume).

  10. In practice, Saudi and Emirati citizens enjoy greater social protection than labor laws suggest given access to extensive welfare entitlements from the state.

  11. Cammett interviews: Former UGTT representative and director of a non-governmental association, Tunis, July 13, 2000; Officials, UGTT, Tunis, July 17, 2000.

  12. The effect was particularly noticeable in Saudi Arabia where per capita GDP (current US dollars) fell from $17,108 in 1980—then among the world’s highest—to around US$7,321 in 1998, temporarily dropping it into the upper-middle income category (World Development Indicators).

  13. Little scholarly research addresses the renegotiation of social contracts in the Gulf oil monarchies, preventing a more comprehensive treatment of variation in the evolving labor regimes of these countries.

  14. The actual language of the agreements calls on countries only to enforce existing labor laws. Where the laws are in conflict with ILO standards, there is no formal requirement for the countries to change either the letter of the law or the practice. Mechanisms exist for consultation over discrepancies, but it is not clear that the USA has the political will to challenge friendly regimes with these provisions. Moreover, domestic organizations such as unions are not permitted to file complaints about non-compliance as part of these arrangements. Thus, labor activists who might seek to promote competitive unionism cannot challenge monopolistic union structures through the FTA mechanisms.

  15. Recent studies indicate that the Middle East lags behind all other world regions in female labor force participation, and various human rights reports document cultural and legal barriers to female employment (Kelly and Breslin 2010; Ross 2008; Tzannatos and Kaur 2003; Nazir and Tomppert 2005).

  16. Posusney interview: Labor union representative, Amman, Jordan, July 2003.

  17. Posusney interviews: Labor union representatives, Rabat, Morocco, June 2002; Economist, Rabat, Morocco, June 14, 2002.

  18. A smaller group of foreign workers occupy positions requiring higher skills and technical training beyond the expertise and educational background of most nationals. In practice, however, high-skilled labor migrants enjoy much better working conditions than low-skilled imported labor (Vora 2009: 20).

  19. In the 2000s, the percentage of migrant workers appears to have increased substantially in all Gulf countries. Based on estimates from the 1990s, Longva (1999) reports that foreign workers accounted for 61% of the workforce in Kuwait, 75% in Qatar, 76% in the UAE, 32% in Bahrain, and 27% in Oman and Saudi Arabia.

  20. Little research addresses the renegotiation of social contracts between Gulf governments and nationals in the past decade. For an overview of labor market restructuring in the Gulf states from the 1970s through the 1990s, see Kapiszewski (2006). In general, countries with more limited petroleum reserves, such as Bahrain and Oman, were quicker to adopt indigenization policies.

  21. The non-replacement of retired civil servants is the main reason why some bureaucracies in the Gulf state have decreased (Howell 2009; Kapiszewski (2006): 228).

  22. Among other things, Article IV of the IMF Articles of Agreement stipulates that the Fund can oversee the compliance of countries with the obligations they incur as recipients of support (IMF n.d.).

  23. Syria, which did not undergo structural adjustment, nevertheless gave employers considerable flexibility with respect to hiring and firing regulations. Its labor laws permit short- and fixed-term contracts and a wide range of causes for firing workers. While employers are required to notify a third party before dismissing a worker, there is no mandatory retraining or priority rules regarding layoffs. We were unable to determine whether Syrian labor codes have always granted this flexibility or whether these provisions reflect changes that might have occurred during or after a period of limited economic liberalization in the country during the 1980s.

  24. In Egypt, too, some labor activists see single confederations as a tool that can still strengthen the workers’ movement, if run democratically.

  25. See, for example, Brynen et al. (1995); Posusney et al. (2005).

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Acknowledgments

We are grateful to Francisco Resnicoff, Caline Jarudi, Colleen Anderson, Mary Elston, Eric Hubble, and Julia Zweig for research assistance and to Ragui Assaad, Linda Cook, Barbara Stallings, and Katrina Burgess for helpful comments on earlier drafts. Some information contained herein comes from labor activists who have requested anonymity. Any errors are our own responsibility. The two authors started the paper together, but it was ultimately completed by Melani Cammett due to the untimely death of Marsha Pripstein Posusney.

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  1. Department of Political Science, Brown University, Providence, RI, 02912, USA

    Melani Cammett

  2. Department of History and Social Sciences, Bryant University, Smithfield, RI, 02917, USA

    Marsha Pripstein Posusney

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  1. Melani Cammett
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  2. Marsha Pripstein Posusney
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Correspondence to Melani Cammett.

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Cammett, M., Posusney, M.P. Labor Standards and Labor Market Flexibility in the Middle East: Free Trade and Freer Unions?. St Comp Int Dev 45, 250–279 (2010). https://doi.org/10.1007/s12116-010-9062-z

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