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Labour rights groups across the world have welcomed Bahrain's decision to become the first Gulf Arab state to end a system binding foreign workers to employers, a practice critics say is open to abuse.
The kingdom's Minister of Labour, Majeed Al Alawi, said the new policy would create a 'more liberalised and dynamic' labour market by allowing workers to move from one employer to another.
"Hopefully it will create an incentive for employers to compete ... to attract workers with better working conditions," said Nisha Varia, who monitors global migration issues for New York-based rights group Human Rights Watch.
She called on larger neighbouring countries like Saudi Arabia to follow suit.
Many low-wage jobs in Gulf countries are filled by Asian expatriate workers whose residency permits are typically linked to a sponsoring employer.
Critics of the sponsorship system say it is open to exploitation, with some employers withholding pay, holding onto workers' passports and trapping them in potentially
abusive situations. Switching to a new job can put workers in violation of local laws.
"Sponsorship is not humane. We think sponsorship is outdated," Mr Al Alawi said in an interview. "This will bring our laws into the 21st century."
About half of Bahrain's one million residents are foreigners. In some Gulf countries, such as the United Arab Emirates and Qatar, expatriates outnumber citizens by at least four to one.
Many unskilled workers rack up large debts in their home countries to find work in the Gulf.
Marietta Dias, a spokeswoman for the Bahrain-based Migrant Workers Protection Society, said the kingdom "is leading the way" in terms of Gulf immigrant labour issues.
But she questioned how effective the new policy would be in practice. "Most of these laws are difficult to implement for low-income workers, because they are not always aware of their rights and do not have the time or resources to challenge employers in court," she said.
The Cairo-based Egyptian Organisation for Human Rights urged other Arab countries to follow Bahrain's lead in ending the sponsorship system, which it called a type of 'slavery' that violates basic human rights principles.
Bahrain's new employment policy takes effect in August. The Bahrain Chamber of Commerce, however, has already formally expressed 'reservations' over scrapping the sponsorship system and voiced concerns about expat executives with confidential information being able to switch to rivals.
