Saturday, April 18, 2009

Structural Flaws: Part 3

This is part 3 in a four part series examining the situation of construction laborers in Dubai. Tonight we look at the state of overseas recruitment, how employees end up disappointed by wages significantly smaller than had been promised. Tomorrow will look at possible remedies for the current state of affairs, and the nature of actions that are currently being taken.

In parts 1 and 2, I looked at the issue of denial of freedom, and denial of wages, and how the international media uses these two issues as key supports in the assertion that construction laborers in Dubai are slaves. The final pillar on which this argument rests is in the expatriation of labor, how the construction laborers of Dubai, like Eastern and Western Africans three hundred years ago, were tricked or trapped and shipped off to a far away land.

As the construction boom ramped up to insane warp speed levels a few years ago, the demand for labor was acute to an extreme. Companies needed workers, and fast. Companies that had, even only a few years before, either not existed or had only worked on one or two much humbler projects, suddenly found themselves desperate to quadruple or quintuple their workforce as fast as possible. Since that sort of manpower is difficult to get on short notice in many places in the Middle East, these companies looked to where the vast majority of Dubaian labor is usually derived - the Sub-Continent.

Having little experience with the language, laws, and political or regulatory conditions in these countries, most or all of the construction companies look to third party manpower agencies to recruit and send over workers. These construction companies, who are private companies not related to the government controlled developers, do not have the resources to open and staff multiple international recruiting offices, which is why they have to depend on these third party companies. In a perfect world, each construction company would control each aspect of its own recruitment, from meeting the prospective employee, explaining the terms of the contract including wages and and accommodation, and arranging for transportation to and from Dubai. Sadly that is not, and most likely never will be, what happens simply due to the prohibitive logistical and financial costs involved. What remains is the very imperfect system of outsourcing recruitment.

So what do these third party agencies do that is so awful? In a word, they lie. City to city, town to town, and village to village, they move through the most economically depressed areas bringing a message of hope and salvation to the poor, hungry, and desperate. "Dubai, the land of gold and diamonds, beckons" they say. Riches can be yours," they promise. "Two, three, five times your current salary, and only half the work required!" they assure you. In the tradition of the greatest snakeoil salesmen of the old west, these recruiters know their target market, and know the stories heard and told about Dubai. They play upon the credulity of their audience and sell them a rotten bill of goods.

"All you have to do," they say, "is buy your ticket and sign on the dotted line, right here, right now."

Unfortunately for those prospective fortune seekers, the cost of a ticket to Dubai from the the subcontinent, while inexpensive by my and other expats standards, is often prohibitive for them. A few hundred dirhams, maybe one or two hundred bucks for an American or Canadian, translates out to thousands of rupees in India, several month's earnings for many of those who try to better their lot in Dubai. It's money most can't just whip out of their pockets and slap down on a shiny new ticket. SO what to do? Since banks won;t lend them the money, and family and friends don;t have that kind of money to lend, it's off to the local loan shark for some chai and a loan. Once they've signed on that dotted line, the rest, they say, is history.

When the workers arrive and learn that the wages they will earn are far less than what they were told they would earn, they are usually bewildered, confused, and angry. But instead of saying "you know what, this isn't what I signed up for," and heading back on the next flight out, they start having visions of broken kneecaps floating in their heads. Those loan sharks are there, waiting back home, and if the money these workers owe is not forthcoming, while the workers themselves may not have to worry about harm to themselves, they will have nightmares about what may happen to their families in their absence. In effect, the threat of violence towards themselves or their families, whether real or perceived, is a stronger chain than any of iron or steel could ever be.

The irony in the whole ordeal is that while the government, and by proxy, the people of the UAE are explicitly blamed for the situation of the construction laborers, they had no direct part in the tragic chain of events bringing those laborers to Dubai in such desperate straits. A government controlled developer decides to build a building, and they put out a contract for tender. The winning company, a private sector company, and usually the lowest bidder, wins. The winning bidder then has to go out and staff its massive new operation, and needs a lot of labor, fast. The problem is however, that in order to win the contract, the wining bidder had to budget X for wages. Unfortunately X is not a competitive wage, even in the markets where labor is being recruited from. Nevertheless, bodies are needed, and pressure is placed on the recruiters to provide them. Maybe this pressure is just words, threats to choose another agency, or withhold outstanding payment. The again, maybe recruiters are incentivized, promised bonuses for hitting recruitment targets. Whatever the case may be, the recruiters soon realize that telling prospective employees that they will earn X in wages isn't bringing anybody in. So then they promise Y, create a whole song and dance, figuring that most of the laborers will be stuck in Dubai for years, time enough to make a fast buck and get the hell outta Dodge.

One solution is to pressure foreign government to ensure that these recruiting agencies are regulated, accredited and monitored. In the US, Canada, and the UK this happens as a matter of course. But in Bangladesh? Are you kidding? If there is one constant in any of the nations on the Sub-Continent it is that any law, any regulation, and any regulatory authority is far from infallible. And due to the cost of implementing these sorts of changes, costs that would be entirely absorbed by these other nations, which would only benefit the the PR image of Dubai, it's not hard to see why these countries aren't taking the initiative on this.

So what to do?

Ideally, the recruiter would come back to the employer and report that nobody is interested in the salary being offered, that a better package is needed. The employer would go to the developer and say "looks like we'll have to increase the price of the whole show," and the developer would kindly nod and generously open their pockets, and rain money on down the chain.

In reality if the recruiter came back to the employer and reported that nobody was interested in the salary being offered, the employer would find a new recruiter. And if they didn't and went to the developer asking for a vast new infusion of cash outside of what was contractually agreed upon, the developer would find a new contractor. And if they didn't, the developer would go to the group of investors and ask for more cash to deal with unexpected costs overruns. Any guesses as to how that meeting would go?

What we are left with, then, is a very flawed and imperfect system. Even if construction company "A" decided to grow a conscience, double the wages, and pay for each employee's flight over so that they wouldn't have issues with loan sharks, construction company "B" would be more than happy to do none of the above, would prepare a much lower bid, and would win the contract. So that wouldn't solve the problem. But what about a regulatory change? What if the government decreed that these companies had to pay for the flights of each employee, and had to ensure that recruiters were advertising accurate salary levels? It would help the problem, but there is little chance it would ever happen.

By decreeing that a private company has to absorb much higher costs, what the government is really saying is that it will pay those costs themselves, since those costs would be passed up to them through increased development costs. Still, why wouldn't they do that? It's the right thing, after all. Well, the short reason is that because almost nobody would do that. Does the US government fly in planeloads of Mexicans for the edification of private industry? No. Would they ever? No. It is not within their interest and purview to ever do so.

Fortunately there is hope on the horizon. As the construction booms winds down, the intensity of the laborer issue, overall, will also subside. What development happens in the future will contend with a far different labor market, especially since India in particular, in contrast to much of the rest of the world, has an expanding market, with wages rapidly on the rise. As laborer contracts end, and laborers leave Dubai, when recruiting companies come calling again, they will have to contend with those market conditions. And while they may try to sell a whole song and dance again, the may find the opportunity to do so has long since passed.

No comments:

Post a Comment