State help sought for three more months

TALKS are underway with the private sector to ensure large numbers of Bahrainis are not dismissed in the coming months as the financial impacts of the pandemic takes its toll.

However, MPs believe uncertainty caused by the Covid-19 outbreak will continue, prompting them to present an urgent proposal yesterday to extend government support for individuals and businesses for three more months.

The parliamentary proposal, spearheaded by MP Dr Abdulla Al Thawadi and signed by seven others, hopes to ensure the stability of the country’s unemployment rate which was registered at 4pc at the end of last year.

Labour and Social Development Minister Jameel Humaidan said yesterday that job dismissals among Bahrainis have been minimal and were being dealt with.

He was speaking during a meeting held with MP Mohammed Buhamood at the ministry’s headquarters in Zayed Town.

“We are in contact with establishments in the private sector to ensure the stability of jobs,” said Mr Humaidan.

“We are also ensuring that rights are not affected while minimising the effects of Covid-19 on the labour market.

“There is commitment from the private sector not to dismiss Bahrainis if there is a restructure or downsize.”

The government is currently paying wages for private sector employees along with bus and taxi drivers and kindergarten teachers for April, May and June.

It has also exempted individuals and businesses from paying electricity and water bills and waived municipal, tourism and labour fees for the same period.

All rents of government property for the three months have also been dropped.

Grants worth between BD1,050 and BD12,000 for affected businesses have also been distributed through Tamkeen, while others were given low interest loans under the Liquidity Fund that has been doubled from BD100m to BD200m.

Bank loan instalments for Bahrainis have also been deferred for six months.

This is all part of the BD4.3 billion economic stimulus package launched by the government to offset the impact of the pandemic.

Dr Al Thawadi

However, Dr Al Thawadi said the country was yet to recover from the impact of Covid-19 and that the private sector needed additional support.

He said less than a quarter of the stimulus package has been spent so far, stressing that the government was able to continue this support until September.

“All of the good done by our government in these three months will be undone from July as many businesses will close and Bahrainis will lose jobs,” he said.

“The government has not shared with us the plan for the next phase so at least it can keep the support going for three additional months until September, as less than a quarter of the stimulus package has been spent so far.

“It is necessary that legislators and the government work together to provide assurances as plans for dismissals, downsizing and other cost cut approaches are in the pipeline within the private sector.”

Mr Al Zayed

Parliament’s second vice-chairman Ali Al Zayed, who signed his name alongside the other MPs, said the unprecedented circumstances warrant the continuation of government support.

“Even if the situation improves the economy will need time to recover,” he said.

“I think the government support needs to continue for three more months until it draws up a plan for the next two years that sees new lower benefit packages introduced until things pick up again.”

Mr Al Saleh

Parliament’s services committee chairman Mamdooh Al Saleh said the additional support could be tailored for certain sectors that are fighting to stay afloat.

“Telecom companies, private schools, banks and hypermarkets have made huge profits while there are many businesses that are still closed,” he said.

“These businesses have not benefitted from the waivers and have minimal Bahraini employees so they did not receive the wages support.

“The continuation of government support needs to happen, but the format needs to be changed into something that doesn’t see the rich get richer.”

Dr Jaffari

Meanwhile, leading Bahraini economist Dr Akbar Jaffari explained that the government would be within the financial safe zone if it continued support for three additional months.

He also predicted an 8pc increase in unemployment if the government support ends this month.

“The Unemployment Fund still has around BD500m for two three-month payments for Bahraini wages, while waiving of the fees are not costly and have not been spent as half of the businesses were partially or fully closed,” he said.

“Should the government stop financial support then unemployment will at least double to 8pc if not jump to 15pc.

“Also, the cost of paying the unemployed will be higher than securing their jobs in the next few months.”

The urgent proposal was submitted to Parliament chairwoman Fouzia Zainal, who will refer it to the Cabinet for review and action.

Source: http://www.gdnonline.com/Details/824751/State-help-sought-for-three-more-months