Four Gulf States Sign Deal On Monetary Union

"The Gulf Cooperation Council (GCC) took a major step towards a single currency union on Sunday when four members signed a pact to create a joint monetary council after years of hesitation. Foreign ministers from Bahrain, Kuwait, Qatar and Saudi Arabia agreed at a Riyadh meeting to set up the council, a precursor to the ultimate goal of establishing a common currency.... Foreign ministers from Oman and the United Arab Emirates also attended the meeting but refused to sign on...." [Agence France Presse (6/7)/Factiva]

Arab News writes that "... 'The GCC Monetary Council will manage the transition toward monetary union, which is targeted to be operational in 2013,' said a GCC spokesman, Abdelaziz Al-Uwaisheg on Sunday. The original target date for minting a common currency was 2010, but that was later postponed so that member states could have more time to work out differences....The agreement will still have to be ratified by each of the four GCC governments of the remaining participants before it can be enacted...." [Arab News (Saudi Arabia, 6/8)/Factiva]

FT reports that "...the UAE withdrew from the proposed monetary union and plans for regional economic integration in May. It pulled out after Riyadh, the Saudi capital, was selected as the headquarters for the future regional central bank over Abu Dhabi, the capital of the UAE....Oman pulled out of plans for the monetary union in 2006...." [Financial Times (6/8)/Factiva]

Gulf Economies To Contract, Says IMF.

"The Gulf's largest economies are expected to contract this year as Opec-mandated cuts in oil production and declining petroleum revenue erode growth. The International Monetary Fund (IMF) said Sunday that real gross domestic product in Saudi Arabia, the United Arab Emirates and Kuwait would shrink after a slump in oil prices spurred the cartel to reduce output.... 'The bottom line is that nearly all countries in the region will be seriously affected by the global crisis in important but different ways,' the IMF said in its MENA Regional Economic Outlook...." [Financial Times (5/11)/Factiva]

However, AP adds that "...IMF Mideast and Central Asia Department Director Masood Ahmed said the region as a whole was likely to weather the financial crisis better than other parts of the world because of 'prudent financial and economic management' and the ability of oil-exporting countries to draw upon hefty cash stockpiles accumulated during boom times.... Non-exporting countries are at greater risk, particularly if the recession dragging on the economies of trading partners in the West and elsewhere proves lengthy. A drawn-out global downturn could lead to significantly higher levels of unemployment and poverty, Ahmed added...." [Associated Press (5/10)/Factiva]

Reuters reports that "...while Gulf banks are financially sound, indicators 'may not fully capture risks posed by high credit growth and concentration in real estate', the IMF said, adding any sharp deterioration in bank balance sheets could delay recovery...." [Reuters (5/10)/Factiva]

Saudi Arabia: Enact Protections for Domestic Workers

Saudi Arabia's Shura Council should ensure that proposed labor protections for domestic workers adhere to international standards and recommend their prompt enactment, Human Rights Watch today. The Shura Council is planning to discuss the draft annex to the labor law next week and to make recommendations to the Saudi cabinet, which can enact the measure into law.

Saudi Arabia's current labor law excludes domestic workers, denying them rights guaranteed to other workers, such as a weekly day of rest, limits to hours of work, and overtime pay. A 2008 Human Rights Watch report, "'As If I Am Not Human': Abuses Against Asian Domestic Workers in Saudi Arabia," documented how domestic workers often worked 18 hours a day, seven days a week, and had little power to collect owed wages in labor disputes.

"The Saudi government has an opportunity to improve conditions for domestic workers dramatically and to serve as a model for the region," said Nisha Varia, deputy director of the women's rights division at Human Rights Watch. "It should adopt these reforms quickly to prevent future cases of abuse."

The Shura Council is a consultative body. It debates draft legislation presented by the cabinet and, once approved, the draft law goes back to the cabinet which can make further changes and enact it into law.

Approximately 1.5 million women from Indonesia, Sri Lanka, the Philippines and other countries are employed as domestic workers in Saudi Arabia. Saudi authorities and the foreign missions of domestic workers' home countries receive thousands of complaints of labor exploitation or abuse each year. Excessive workload and unpaid wages, for periods ranging from a few months to 10 years, are among the most common complaints.

Many more cases probably go unreported, given domestic workers' isolation in private homes, employers' ability to have workers summarily deported, and migrants' lack of information about their rights.

"The Shura Council should ensure that the proposed reforms provide domestic workers the same rights accorded other workers under the labor law," said Varia. "Working in private homes does not mean they should lose basic protections, and guaranteeing these rights by law can be especially important since they work out of the public view."

Domestic workers' rights are further compromised by the restrictive kafala (sponsorship) system, which ties migrant workers' visas to their employers, and means employers can deny workers the ability to change jobs or leave the country. Human Rights Watch interviewed dozens of domestic workers who said their employers forced them to work against their will for months or years. In other cases, domestic workers face forced confinement in the home, or physical and sexual abuse.

"Comprehensive reforms by the Saudi government are long overdue," said Varia. "Extending the labor law is an important first step the Saudi government can take to fight labor exploitation and violence against domestic workers."