Yes! At least this is the feeling I get from a recent Advisory Council’s recommendation to overhaul Qatar’s much needed sponsorship law (news published in Gulf Times, 24 June 2008). Under the existing sponsorship law when an expatriate worker quits his job and subsequently leave the country, he cannot re-enter the country with a new (or better) job within the next two years. And this was not enough! The Council is now recommending to increase the re-entry ban from two to five years, meaning that if I quit (or lost) my job today and leave the country immediately, I shall not be allowed to re-enter Qatar with a new job until this time around in 2013!
Why the Council’s recommendation is bad and needs rethinking? There is an aesthetic reason for this. Only a few years ago Qatar hosted a WTO negotiation, the well-known Doha Development Round, which aimed to lower trade barriers around the world and thereby permitting free trade across nations. As can be seen, the proposed (new) sponsorship law emerges as an apparent contradiction to country’s policy that promotes free trade of goods and services while simultaneously increasing the limit of free movement of labor.
There are reasons to believe why a protracted re-entry ban may hurt country’s non-oil private sector. It is very easy for sponsors in Qatar to hire or fire expatriate workers. Why not allowing the same flexibility for expatriate workers? According to the Council, since sponsors bear the costs of hiring workers, quitting seems costly for sponsors. To my view it is not the cost of hiring expatriate workers that is at stake, it is because the firms (or sponsors) are not competitive enough to face the challenge of losing workers.
If workers move from Firm A to Firm B within Qatar, it cannot be harmful for the country’s growth since output produced by the workers have not changed, if not increased. By allowing workers to move freely across firms, workers are better able to match their skills which likely to improve their productivity. By limiting the labor market adjustment, not only Firm B is being deprived from getting matched workers, it is also not allowing Firm A to rebalance and become competitive. At the end, the overall economy suffers.
The non-hydrocarbon private sector in Qatar is heavily dominated by foreign skilled and unskilled workers. The proposed re-entry ban will clearly lead the country into backwardness, when Qatar is already infamous for its entrenched labor market rigidities. The Advisory Council should rethink their recommendation if not totally abolish the re-entry ban.