Shura Council to Review Unemployment Insurance Fund Accounts and Cap Bill

(Bahrain) Bahrain’s Shura Council is set to take up two files that touch the lives of both citizens and the foreign workforce on the same day: the audited 2023 accounts of the Unemployment Insurance Fund, and a draft change to cap labour permits under Article 4 of Law No. 19 of 2006. The session, announced by the council, comes as employers, expatriate workers and job seekers watch for signals about how the kingdom will balance social protection with labour market demand.

While the fund’s accounts point to a strong surplus in 2023, the proposed permit cap has drawn pushback from the Shura’s Services Committee even after it cleared the elected Parliament.

Unemployment Insurance Fund — audited 2023 accounts

The Financial and Economic Affairs Committee recommended approving the fund’s audited financial statements for the year ended 31 December 2023, after the Board of Directors of the Social Insurance Organisation signed off on them.

The key numbers show:

• Contributions exceeded benefits by BD54.4 million in 2023, compared with BD51.3 million in 2022.
• The committee described the rise as evidence of a healthy position for the fund.

For citizens who rely on unemployment support during a layoff, the surplus is a reassurance that payments are being backed by steady inflows. For policymakers, it is also a measure of how the insurance system is coping as the private sector adjusts hiring plans and wage costs. The committee’s note lands at a time when regional competition for investment keeps pressure on Bahrain to keep labour costs predictable.

Procedural milestone and call for review

Lawmakers flagged a procedural milestone: this is the first time the fund’s accounts have been submitted to the legislative authority under paragraph (e) of Article 9 of the Decree-Law on Unemployment Insurance. That requirement followed a 2023 amendment aimed at tighter legislative–executive cooperation.

The amendment gives Shura members a clearer window into how the programme is run and whether it still matches today’s labour market. After nearly 20 years of operation, the committee urged a wider review of the fund’s work, including whether it should expand its scope while keeping its main purpose:

• Primary purpose: social protection for citizens
• Secondary purpose: support for stability

Transparency issue: missing statement of comprehensive income

One technical gap drew pointed criticism. The committee said the audited statements did not include a statement of comprehensive income, commonly treated as a profit-and-loss view that helps readers see income, expenses and other gains and losses in one place.

The committee urged that future reports include that statement so legislators and the public can track trends more easily, especially when benefit rules or contribution rates come under debate. They noted that transparency around the Unemployment Insurance Fund matters beyond accounting, because the fund is part of the country’s wider social contract: workers pay in, the state helps administer, and people expect support when jobs end.

Any hint of opacity can quickly become political.

Several Shura members have previously pressed for clearer reporting across public funds as government spending faces tougher scrutiny.

Draft amendment to Article 4 of Law No. 19 of 2006 — permit cap proposal

In the same sitting, the council will consider a draft amendment that would tighten the language of Article 4 of Law No. 19 of 2006, Bahrain’s main framework for regulating the labour market and work permits.

Parliament has already passed the draft, but the Shura Council’s Services Committee recommended “rejecting in principle” the change, despite the Legislative and Legal Affairs Committee confirming the text is constitutional and legally sound.

What the proposal would do

The proposal would require Bahrain’s four-year national labour market plan — prepared by the Ministry of Labour with the Labour Market Regulatory Authority (LMRA) and approved by the Cabinet — to set a fixed maximum number of work permits for foreign workers, either:

• Overall, or
• By sector and occupation

Under the current law, the plan “may include” a maximum, giving officials room to adjust when conditions shift. The Services Committee, echoing positions from the LMRA, the Ministry of Labour and government legal advisers, argued that locking a cap in place for four years could pose serious problems.

Committee concerns and alternatives

Key concerns raised by the Services Committee:

• Rigidity during shocks: Locking a cap could leave authorities scrambling during sudden growth, sector-specific shocks or emergencies, because changing the number could require new legislation.
• Fairness issues: A national ceiling might reward early applicants for permits while disadvantaging later ones.
• Displacement of needs-based allocation: It could replace the current approach of allocating permits by establishment based on stated business need.
• Mismatch with Bahrain’s model: The committee said statistical caps fit high-migration states better than Bahrain’s context, where many families depend on expatriate wages and firms rely on specialist hiring.

Officials said their preferred tools are:

• Bahrainisation targets
• Training programmes
• Incentives to encourage employers to hire citizens, without freezing recruitment for projects that must be staffed quickly

The committee’s report also said it found no clear economic benefit in moving from needs-based permit planning to hard caps, and suggested alternatives focused on workforce replacement:

• Targeted training
• Skills building
• Wage support
• “Balanced Bahrainisation” programmes

Implications for migrants and employers

For migrants already in Bahrain on employer-sponsored permits, the debate is practical, not abstract. Any shift toward fixed permit limits can change:

• Renewal strategies
• Timing of transfers between employers
• Willingness of companies to recruit abroad

Employers — especially in construction, hospitality and healthcare — have long argued that delays or uncertainty in permit availability can stall contracts and push up costs.

According to analysis by VisaVerge.com, Gulf labour market rules often shape immigration choices as much as salary, because workers plan around visa renewal and family support. The LMRA’s services portal, which lists permit procedures and requirements, is available at LMRA’s services portal.

What’s next and why it matters

No further updates were reported after the announcement, according to News of Bahrain, leaving the Shura Council’s debate as the next public test of where policy is heading.

Possible outcomes and their implications:

1. If the Shura approves the 2023 accounts:
   • The fund’s surplus could strengthen calls to review benefits and eligibility rules without weakening its core role.
2. If the Shura blocks the permit-cap amendment (as its Services Committee recommended):
   • The government would keep wider discretion to adjust work permit numbers as the economy changes.

Either way, the session will be watched closely by businesses and foreign workers planning their next contract in the kingdom.