Because migrants in the Gulf have few rights, locals let more of them in

MUHAMMAD DEV arrived in Bahrain three months ago from India, leaving behind his wife and baby. He misses his family, and calls them daily. But driving a taxi along Bahrain’s humid highways, he earns more than double what he did back home. “That’s why I’m staying here and they are happy,” he says.

News about migrant labourers in the Gulf states usually focuses on abuses. A recent case involves thousands of Pakistani and Indian construction workers who have been stranded in Saudi Arabia after a cash-strapped employer stopped paying them but refused to let them leave the country. Many are owed months of back pay. The Saudi government has promised to give them plane tickets home, and insists that this is a one-off. It is not.

Under the kafala (sponsorship) system used in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (collectively, the Gulf Co-operation Council or GCC), migrant workers are tied to their employers. They may not switch jobs or, in some cases, leave the country without their employer’s permission. Many have their passports confiscated, though this is illegal.

The power that the kafala system gives to employers squashes wages. A study by Suresh Naidu of Columbia University, Yaw Nyarko of New York University, Abu Dhabi, and Shing-Yi Wang of the Wharton School of Business found that in the UAE wages for foreigners were 27% lower than they would be if firms had to compete with each other for labour.

Yet still migrants flock to the Gulf. According to the Gulf Labour Markets and Migration programme, a research body, roughly half of the 50m people in the GCC are non-citizens. In Qatar and the UAE, it is more than 85%.

One reason for the long queues of Indians at the Qatari embassy is obvious: wages are much higher in the GCC than at home. Unpublished research by Michael Clemens, from the Centre for Global Development, compares migrants who moved to the UAE with those who had their contracts cancelled at the last minute because of the property-price crash in 2008. Those who moved earned 250-350% more. Many migrants send money home, which pays school fees and helps relatives start businesses. Having a household member working in the UAE made Indian households around 30 percentage points more likely to own a family business.

Another paper, by Glen Weyl of Microsoft Research and Yale University, finds that by letting in so many migrants the GCC countries do more (per head) to reduce global income inequality than richer OECD countries, which send loads of aid but keep their borders relatively closed. Were the OECD countries to open their borders to the same extent as Kuwait, which has two migrants for every native, global inequality could be cut by a quarter. That is politically impossible in the West. So why is it possible in the Gulf?

Mr Weyl argues that it is the kafala system itself that makes Gulf citizens tolerate ultra-high levels of immigration. Precisely because it grants migrants so few rights—they can never become citizens, nor share in the generous local welfare state—Gulf nationals do not feel threatened by them. On the contrary, they like having other people to mop their floors and sweat on their building sites.

Some Gulf states are trying to curb the most coercive elements of the system. Bahrain and the UAE have scrapped exit visas and allowed migrants to switch jobs. The Saudis are trying to crack down on exploitative middle men. Human Rights Watch, a watchdog, urges construction firms to treat workers better than the law requires. But the basic deal that Gulf states offer to migrants—you can work, but you will never be one of us—remains unchanged.