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Middle East & North Africa
Deindustrialization in the Middle East and North Africa
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Middle East & North Africa
Unpacking the Political Stakes Behind Baghdad’s New Central Bank Tower
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Middle East & North Africa
Systemic Violence and Social Reproduction through the Kafeel System: Vietnamese Domestic Workers in Saudi Arabia
Processes of deindustrialization have set the course for postmodernity. Though its impact varies with geography, it is deindustrialization which defines the conditions of social, political, and economic life across most the world today. This is certainly so in the Middle East and North Africa (MENA). There, premature deindustrialization bequeaths legacies of grave and enduring salience. In the economic domain, effects are observable in the region’s struggles with job creation, productivity, growth, and macrostability. Socially, they are present in MENA’s extreme levels of inequality. Politically, deindustrialization contributes to democracy’s recurring failures to launch.
This report takes identifying the drivers behind deindustrialization in the MENA as its primary task. Based on months of desk research and an extensive exploration of the historical archive, we trace causality across time and beyond the borders of the region. Findings are many, prominently including the following:
(i) The early onsetting of deindustrialization in the MENA was provoked by the global economy’s drift into stagnation beginning in the late 1960s.
(ii) Due to global issues of overcapacity and falling profit rates, securing the investment needed to nurture competitive manufacturing sectors has been exceedingly difficult.
(iii) Though global dynamics did make opportunities for healthy industrializing scarce, they did not condemn MENA countries to the fates ultimately suffered. Political choices and policy errors also played a role in shaping the course of events. Critical in these regards were modalities of state-capital relations, inadequate policy design, and a series of contingencies derived from the management of natural resource endowments.
(iv) Neoliberalism’s resolution of capitalism’s profitability crisis harmed MENA’s industrial prospects significantly. The deepening of global value chains over the past forty years has been detrimental to capital accumulation. The enforcement of intellectual property claims has obstructed traditional pathways to industrial progress. Furthermore, competitive pressures have forced firms to adopt capital intensive forms of production, limiting industry’s capacity to absorb greater shares of MENA’s workforce.
(v) The corporate welfarism that many MENA governments have institutionalized in hopes of attracting foreign investment in recent decades is fundamentally misguided: The extension of non-conditional benefits to corporate actors serves only to minimize the social and developmental utility of a prospective investment.
Looking ahead, it is plain that deindustrialization will continue weighing heavily on the region’s outlook. For a better future to be realized, local policy officials and members of the international community alike will need reckon with the factors compelling deindustrialization. Materially, this requires rethinking the terms and incentives governing matters of production, trade, and investment.
This publication has been supported by the Rosa-Luxemburg-Stiftung. The positions expressed herein do not necessarily reflect the views of Rosa-Luxemburg-Stiftung.
Introduction
Since the American invasion of 2003, discussions surrounding Iraq’s economic development have frequently centered on the reform of the financial sector. To this end (and following sanctions that “may well lay claim to be the worst humanitarian catastrophe ever imposed in the name of global governance”1), the American-led Coalition Provisional Authority (CPA) issued multiple Washington Consensus-inspired diktats within the 100 binding orders that were meant to transform Iraq’s political economy. These measures were carried into Iraq’s 2005 constitution,2 rendering capital market development, liberalization, and compliance with International Financial Institutions\’ (IFI) recommendations into the compass guiding Iraq\’s economic trajectory.
In a context where finance has been conceived as a conduit for Iraq’s awaited prosperity,3 the new 170-meters-high Central Bank of Iraq (CBI) tower stands as both a totem and mechanism of an impending national resurgence. Looming atop the skyline, the 90,000-square-meter structure itself, a modern-day ziggurat imagined by Zaha Hadid, offers material testament to Iraq’s current developmental priorities.4 Construction began in 2018—delayed by Iraq’s violent 2010s, the nadir of which was reached with the war against ISIS—and is scheduled to be completed shortly. In official discourses, the tower symbolizes a new day dawning: its glass and rebar project growth, stability, and renewal. For some, the tower also augurs Baghdad’s nascent financialization: The city’s elevation as an investment hub at the center of the projected Iraq Development Road. All of this is in keeping with regional trends—both architectural and economic. The CBI tower will join an archipelago of high-profile buildings designed by the late “Queen of the desert” in the Middle East and North Africa region, buildings that all in their own way testify to Arab states’ growing power, capital, and social designs.5
Beneath the narrative surrounding the CBI tower is a reality marked by competing actors and agendas and structured according to contradictions inherent to Iraq’s political economy. This article probes these underlying dynamics by focusing on the intricate relationships between capital, developmental investments, and Iraq’s “state partisan oligopoly”.6 In unwinding some of what is at play in the CBI’s monetary and investment policies and in contemporary fiscal initiatives, a sightline into Iraq’s nascent financialization is profered.
A political economy of post-ISIS Iraq
Iraq’s political field crystallized following the defeat of ISIS in 2017. This event reopened “a new round of critical state reinforcement in Iraq”,7 mobilising variegated public and private actors to deepen their involvement in national affairs. This had significant effects on the country’s economic prospects and geography of power. Concerning the latter, Baghdad progressively reasserted its position as the dominant fulcrum of Iraq’s political economy, a shift consolidated by its 2017 military campaign against Kurdish forces. Concurrently, numerous armed groups’ executives underwent a process of “notabilization”.8
Notabilization entailed pursuit of strategies to secure revenues entrenched in state rent distribution. Beyond laying claim to oil wealth, those participating in the process worked to position themselves within the state’s investment circuits and to acquire stakes within the country’s consumption-driven economy (real estate, retail, imports, etc.). Real estate speculation, both commercial and residential, emerged as especially important. Visible in the proliferation of large-scale construction projects, particularly public-private partnerships (PPP) and state-backed housing developments, profits derived from the transformation of Baghdad’s built environment brought new and old elites together into a novel class formation.
Indeed, Baghdad’s changing skyline serves as a spatial map, revealing the socio-economic effects of power and capital accumulation strategies in the post-ISIS environment. Amidst macroeconomic fragility, clientelism, and deficits in foreign investments, the city’s built environment shows where influence truly lies. As a corporate interlocutor explained to me in the beginning of 2025: “One shouldn’t look at the public ministry or institution behind a project. What matters is the individual; it tells you everything, and it’s not difficult to understand then what is going on and what is at stake”. Whether directly affiliated with the “state partisan oligopoly” or not, individuals and companies are still making “big money in Iraq”,9 and in so doing, acquiring major holdings of political capital as well.
Fiscal troubles further consolidate Iraq’s emergent elite
Since the oil boom of the 1970s and Saddam Hussein’s consolidation of power in 1979, the political economy of Iraq has been increasingly tethered to the vagaries of energy markets. Macroeconomic conditions and the state’s fiscal health have long since swayed with price movements on the world’s largest commodities exchanges. Moreover, due to a host of dynamics attendant to commodity dependence and war, non-extractive sectors have underdeveloped over time, amplifying the economy\’s vulnerability. For a sense of scale, oil in 2023 accounted for 39% of Iraq’s GDP and 91% of government expenditures.10
At first glance, the recent drop in oil prices in April 2025 to less than US$65/bbl—driven by higher OPEC+ output under Saudi leadership and weakening global demand amid US tariff-related uncertainty—would therefore seem to point to trouble.11 With the IMF projecting the Iraqi economy to shrink by 1.5% in 2025, the expectation might be fiscal contraction and elite instability.
But this would overlook the role that debt has come to play in fastening the top ranks and buttressing the popular foundations of Iraq’s contemporary political economy: Debt financing (especially during the Covid shock) has allowed Iraq’s political governors to maintain if not grow public payrolls and other systems of patronage regardless of oil earnings. And attendant to this development, those actors able to extend lines of credit to the state—namely, financial institutions, (under the guidance of the CBI) and individuals with substantial liquid wealth—have acquired growing prominence.
Central banking: between technocracy and power
Sitting 500m west of the Babylon Rotana Hotel and its corporate venues, the Central Bank of Iraq tower overlooks a dried-out Tigris riverbank.12 Under Prime Minister al-Sudani’s investment policies, the site has undergone intensive construction. With the tower at its heart, the neighborhood is set to become a nod of Baghdad’s rising financial networks.13
Since 2003, Iraq’s monetary policy—despite turbulence and political constraints—has been steered by and through the CBI, which has steadily worked to expand its authority and influence over monetary policy and economic governance. The Coalition Provisional Authority established the bank as a legally independent institution under Law No. 56 (2004). As we will see, legal independence never implied operational independence. Regardless, despite facing political turmoil, as a general rule, those in charge of the bank have followed a core mandate that could be reduced to “Solidity, Stability and Sustainability”.14 Materially, this implied the maintenance of currency and price stability through inflation targeting and reserve accumulation. A key part of the CBI’s efforts was the dollar auction window, which was used to control the money supply and dollar liquidity.
With time, the CBI, like many other central banks around the world, expanded its interventions in a number of directions. Cognizant of the country’s vulnerability to energy market volatility, the CBI developed refinancing facilities for state and commercial banks, allowing the latter to sustain lending capacity in the face of liquidity crunches. More recently, the CBI has also stepped up its regulatory reach. The need to do so was made apparent in 2023, when the US Treasury censored fourteen Iraqi banks over non-compliance with Iran-targeted sanctions (Another five Iraqi banks were censored in 2025).15 By dint of the Treasury’s actions, the Iraqi banks in question were prevented from conducting cross-border dollar transactions. With exclusion from dollar-based financial markets posing a systemic threat to the country’s financial system, the CBI took the task of bringing all parties up to speed with compliance seriously. Likewise, it has used its regulatory authorities to demand that domestic banks meet the paid-up capital requirements necessary for their being reconnected to the SWIFT network. In terms of knock-on effects, this second regulatory initiative is certain to precipitate greater financial market concentration: Having set capital requirement thresholds of 400 billion Iraqi dinar, smaller banks will have no choice but to accept merger and acquisition bids.
Beneath the surface, the CBI’s history reveals struggle and contentiousness. This is apparent even in developments related to the construction of its new tower facility. The project to construct a new home for the central bank was launched in February 2012 when Sinan al-Shabibi—former director of the CBI and leading technocratic figure of the post 2003 Iraq—signed a deal with Zaha Hadid and her London based architecture company. The deal was agreed after several months of tensions between Shabibi and former Prime Minister Nouri al Maliki. The tensions stemmed from al Maliki’s desire to go around the constitution in order to entrench government control, that is to say cabinet control, over the CBI. Al-Shabibi actively resisted this, viewing the CBI as a technocratic instrument designed to implement monetary policies inspired by IFI recommendations. In the end, however, the Prime Minister won out. Nine months after the deal was signed with Zaha Hadid, al Maliki replaced al Shabibi and other high-ranked officials of the CBI.
Thereafter, CBI control remained a major and hotly contested political prize to capture. Current CBI director Ali Mohsen al-Alaq has held court for the preponderance of the post-2012 period, his reign interrupted only by a brief interlude from 2020 to 2023 when Mustafa Ghalib Mukheef, considered an ally of Muqtada al-Sadr, took the reins. Al-Alaq’s longevity derives from the support he has retained within the Coordination Framework, but also from his capacity to manage the Americans. In many ways, his personal story is instructive.
After earning his diploma in the University of Baghdad, al-Alaq pursued a career in finance that took him to the Gulf and Canada. After the American invasion of 2003, he quickly carved out roles within the upper reaches of the state apparatus. Initially taking a post at the Ministry of Oil, al-Alaq was appointed chairman of the Joint Anti-Corruption Council in 2006. There, he worked in collaboration with US officials while also working as Secretary General for the Council of Ministers under Maliki’s government. The skills developed in engaging these two constituencies—American officialdom and local power brokers—proved of great use when al-Alaq moved to the central bank. In enforcing financial sanctions, handling fraud monitoring, and delivering price stability, the central banker won a number of allies in Washington. In enabling expansionary fiscal policies via deficit financing and juicing local credit markets (in the latter case, by establishing refinancing facilities and lowering the benchmark interest rate from 7,5% to 5%), al-Alaq kept relevant stakeholders happy at home, too. Likewise, recent moves toward directing credit allocation have served to secure buy-in from the major power brokers of post-ISIS Iraq.
The CBI’s growing “developmental” role
Pretenses toward developmentalism notwithstanding, recent CBI interventions in credit markets have largely been undertaken with an eye on the built environment. Critical here were two lending initiatives—combined capitalized at eight trillion Iraqi dinar in 2015—notionally meant to support non-oil sectors. The first provided subsidized loans through commercial banks to small and medium enterprises (SMEs) “engaged in manufacturing, agriculture, and other high-growth sectors”16. In actuality, though, 83% of the allocated credit wound up concentrating in the residential real estate sector, with just 9% making its way to industry (and but 1% to agriculturalists). The second provided subsidized credit to state-owned commercial banks with an eye on boosting lending to the real (i.e. productive) economy. As breakdown of the CBI’s financial flows as of 2023 reveal, however, a large majority of the liquidity injected wound up again designated for real estate: Of the 12,6 trillion dinars allocated in 2023 through this program, 96% went to the state-owned Real Estate Bank and Iraqi Housing Fund, with 3% accruing to the Industrial Bank and less than 1% to the Agricultural Bank and Al Rasheed Bank17.
By often fostering luxury-oriented real estate speculation, the CBI’s activist turn has produced material, social, and political effects. At the highest level of abstraction, the CBI’s policies have helped turn Baghdad’s built environment into a device for capital accumulation and transnational coalition-building. This process has been expedited by the profits available in real estate development. The latter is not only be attributed to the CBI, of course. Other high-level state investments and public-private partnerships have pushed in this direction as well.18 So too have domestic and regional politics19, cheap labour costs—fueled by youth unemployment amid demographic pressure—and a weak regulatory environment. The need of Iraq’s elites for a store of wealth—for a place where sizable holdings of surplus capital could be deployed and appreciated—has clearly factored in the spiking profit rates available in property development as well, as have internal migrations and tourism development in Baghdad. But in directing credit in the manner it has, the CBI has nevertheless played an outsized role in supercharging the construction of high-end residential apartment complexes across Baghdad’s sprawl.20
Profit and Power in Baghdad’s Construction Boom
An interlocutor interviewed in early 2025, a Baghdad-based businessman, recounted quite clearly how real estate investment has come to the forefront of Iraq’s political economy: “It’s quite simple, I’ll tell you. The absence of stringent regulations lets us generate profits impossible abroad. That is why many Iraqi elites—those that don’t know how to work outside of Iraq, those reliant on political and local networks of solidarity and influence from which they benefit here, those that don’t know how to do business abroad—have constantly failed to develop ventures overseas. They eventually return here to seek new capital accumulation. Also, they want to to replicate lifestyles experienced abroad. [Do you think about the Gulf model?] The Gulf, certainly. Their aim is to preserve and secure that elite lifestyle here in Baghdad. You know, it’s not something you want to lose when it contrasts so much with the hardships you experienced in the past.” Expectantly, foreign parties, whether companies or financiers, have taken note of the profits that can be had in post-ISIS Iraq. Overseeing the planned makeover of the symbolic Turkish Restaurant of Tahrir’s square, for instance, is Italy’s GKSD Holding. The building redesign, of which GKSD Holding is part, epitomizes well the political economy of contemporary Iraq and finance’s rising role therein, as the project is to transform the building into a modern luxurious private hospital complex. The airport refurbishment also speaks of this trend.21 There, state and private banks have signaled Iraq’s standing as gateway for Chinese, Turkish, Iranian, Western and Arab investors and economic partners. The main lounge, a space of socialisation and a hub for business networking, was funded by the International Development Bank, a major Iraqi commercial bank, whose group ZK Holding is based in the United Arab Emirates (UAE). The social space—reserved for travelers of significant means alone— suggests Iraq may, through its new development turn, wind up embedded within circuits of accumulation dominated by GCC monarchies.
Conclusion: Baghdad’s emerging financialisation
The new Central Bank of Iraq tower stands not just as a symbol of progress and as a hub for finance development in the country, but as the embodiment of Iraq’s enduring underlying political struggles and aspirations. Indeed, the reality is that the CBI functions less as a technocratic institution than as an intermediary of power, one balancing US and IFI expectations against the demands of local power brokers.
Materially, the CBI’s policies have disproportionately amplified speculative investments in urban real estate. This distributional pattern reinforces a state-backed capital allocation model that sustains accumulation for elites at the expense of economic diversification. It speaks, moreover, to a recalibration of Iraqi rentierism. Empowered and emboldened, the CBI is now at the heart of efforts to streamline accumulation, stabilize political power, absorb fiscal socks, and manage dissent.
This publication has been supported by the Rosa-Luxemburg-Stiftung. The positions expressed herein do not necessarily reflect the views of Rosa-Luxemburg-Stiftung.
1Michelle Woodward, ‘The Enduring Lessons of the Iraq Sanctions’, MERIP, 15 June 2020.
2Irene Costantini, ‘Statebuilding and Foreign Direct Investment: The Case of Post-2003 Iraq’, International Peacekeeping, 20.3 (2013), pp. 263–79 (p. 266.); Yousef K. Baker, ‘Global Capitalism and Iraq: The Making of a Neoliberal State’, International Review of Modern Sociology, 40.2 (2014), pp. 121–48.
3“There was widespread hope that the Central Bank and Iraq’s financial institutions would spearhead a transformation, one rooted in modern banking laws, institutional independence, and integration with global standards. […]. [Since ] Prime Minister Mohammed Shia al-Sudani came to power in late 2022, a new reform narrative has emerged, prioritizing financial and economic overhaul. In this context, the Central Bank was tasked with playing an instrumental role in restoring macroeconomic balance and institutional credibility.” in “Reforming Iraq’s Financial System: The role of the Central Bank”, Middle East Research Institute (MERI), Erbil, 2025.
4Saleh Mahood Salman, CBI\’s director general of administration, says that the tower is “an “architectural statement about the bank\’s role in the Iraqi economy.” ‘Iraq’s $772m Central Bank HQ Project on Track’, Trade Arabia, 12 May 2019 and the governor of the CBI, Ali Mushen Al-Allaq assert that the “banking sector reform [is their] top priority” Chloe Domat, ‘Pursuing Reform: Q&A With Iraq’s Central Bank Governor Ali Muhsen Al-Allaq’, Global Finance Magazine, 10 October 2024.
5These buildings, like the Beeah group headquarters in Sharjah or the Grand Théâtre of Rabat, weave a map of burgeoning offers that her office started receiving from various “Arab power brokers” on the eave of the Arab spring. Joseph Giovannini, ‘Architect Zaha Hadid’s Dreams Rise in the Desert’, Vanity Fair, 19 November 2021.
6Robin Beaumont, ‘Irak, l’État captif’, Questions internationales, 103104.2 (2020), pp. 104–09.
7Renad Mansour, Iraq After the Fall of ISIS: The Struggle for the State – Kalam (Chatham House, 4 July 2017), p. 33.
8Robin Beaumont, ‘L’Irak, ou la Résistance « désaxée »’, Orient XXI, 6 January 2025.
9Pete W. Moore, ‘Making Big Money on Iraq’, Middle East Report, no. 252 (2009), pp. 22–29.
10See “Table 1. Iraq: Selected Economic and Financial Indicators, 2020–29” in Iraq: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Iraq, IMF Country Report (International Monetary Fund), p. 24.
11World Bank Group, “Reemerging Pressures – Iraq’s Recovery at Risk”, Iraq Economic Monitor, 2023, p. 12.
12‘Twilight of the Tigris: Iraq’s Mighty River Drying up’, Arab News, 20 September 2022.
13One can note that the main contractor handling its construction is the Azebaijan-based company DAAX Construction. The company began as a 50-50 joint venture with the UAE’s DIA Holding FZCO and has worked on large PPP projects in Azerbaijan, Turkey and Kurdistan Region of Iraq. DAAX is also a member of the Iraq Britain Business Council, a key institution that brings together firms shaping the expanding Iraqi private business landscape and networks.
14“Rising from the sloping banks of the Tigris River in Baghdad, the design for the headquarters of the Central Bank of Iraq (CBI) conveys the core values at the heart of the institution: Solidity, Stability and Sustainability.”. “Central Bank of Iraq” – Architecture – Zaha Hadid Architects, 2012.
15David S. Cloud, ‘WSJ News Exclusive | U.S. Bans 14 Iraqi Banks in Crackdown on Iran Dollar Trade’, Wall Street Journal, 19 July 2023; Maha El Dahan, Ahmed Rasheed, ‘Exclusive: Five Iraqi Banks to Be Banned from US Dollar Transactions’, Reuters, 16 February 2025.
16Central Bank of Iraq, The National Strategy for Bank Lending in Iraq, 2023, pp. 23-24.
17Central Bank of Iraq, Annual Economic Report, 2023, pp 52-53.
18Projects being built by Modon Real Estate Development—a subsidiary of Dubai’s Al Handal International Group (HIG)–testifies well to this development. Today, Modon’s activities span from the Gulf and Turkey to Japan. In Baghdad, it has enjoyed the spoils of PPP projects like the $6,5 billion Medinat al Mustaqbal (City of the Future), where Bloom Holding a company of the Abu Dhabi based investment company National Holding is also staked.
19Beaumont, ‘L’Irak, ou la Résistance « désaxée »’.
20“In his interview, Mr. Hardan praised the pioneering role of government agencies and institutions in supporting and encouraging investments in overcoming difficulties, most notably The Central Bank of Iraq, National Investment Commission and Baghdad Investment Commission.” “Modon” awarded best real estate developer in Iraq”, Al Handal, 2022.
21‘IFC Signs PPP Agreement to Modernize Baghdad Airport, Ushering in New Era of Public-Private Cooperation’, International Finance Corporation, 2023.
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In 2014, the governments of Saudi Arabia and Vietnam signed a bilateral labor agreement (BLA) that allowed Vietnamese citizens to temporarily migrate to work as domestics in Saudi homes. Written to automatically renew every five years, the BLA was of great consequence to the thousands of Vietnamese women who signed contracts for employment as domestic workers in Saudi Arabia. Materially, the BLA entrenched a visa labor sponsorship system which grants kafeel (i.e. the head of household and employer) complete control over the lives of imported female workers. The language of the BLA did specify that Saudi Arabia and Vietnam establish a Standard Employment Contract in order to ensure that Vietnamese workers are afforded basic legal protections. However, eleven years since the BLA came into effect, no progress has been made on this front.[1] Consequently, Vietnamese women continue to be subjected to acute precarity, excluded from Saudi Arabia’s social welfare and social protection systems. With the two governments’ complicity and neglect, they also continue to suffer from structural violence. The latter has manifested in physical, sexual, and verbal abuse.
In 2021, the reporting of local journalists and Vietnamese independent scholars, combined with the reporting of international media (the UN Special Rapporteur on trafficking in persons), put a spotlight on the plight of Vietnamese female domestic workers in Saudi Arabia. In 2022, the US Department of State also decided to downgrade the Vietnamese state’s efforts in combatting human trafficking to the lowest possible ranking (Tier 3). To head off media pressure, Vietnam placed an unofficial gag order on reporting of labor abuse in Saudi Arabia. To appease the Americans, a few low-ranking officials were discharged from the Department of Labor at the Vietnamese Embassy in Riyadh. From the Vietnamese state’s perspective, these actions have proven successful. In 2023, the country was reinstated by the US State Department to the Tier 2 watch list in its annual report on human trafficking. In 2024, the country was ranked in Tier 2 proper.[2]
While the Vietnamese government has engineered the appearance of progress when it comes to the working conditions of female nationals in Saudi Arabia, the reality is one of enduring hardship and abuse. Away from media scrutiny, recent years have also seen worrisome new developments come into effect. Specifically, aspects of the BLA have effectively been marketized and/or privatized: To differing degrees the recruitment, brokerage, and oversight of labor flows have been turned over to market logics. These changes continue to leave Vietnamese female workers invisible and without any protection.
Creeping Marketization
An estimated 5,000 Vietnamese workers labor in Saudi Arabia. The rhetoric of Saudi Arabia and Vietnam might have one believe that a large majority are high-skilled workers employed in industries near the global technological frontier. In fact, the public statements put out by the two governments hardly mention domestic workers at all.[3] Alas, data gathered from government sources and relevant recruitment platforms establish that domestic workers represent the second largest category of laborer sent from Vietnam to Saudi Arabia, behind only individuals working in the extraction and refining of oil.[4]
Historically, the agencies handling the recruitment, regulation, and oversight of bilateral labor flows between Vietnam and Saudi Arabia have been state-run and quasi-state run. Past research from the author affirms the extent to which the Vietnamese state and its recruitment agencies exploited women in poor and remote areas, including those below the legal working age and belonging to ethnic minorities.[5] (Nor is the Vietnamese state exceptional in these regards. Records establish that government officials in Uganda and Kenya have also profited from the recruitment and exportation of female workers to Saudi Arabia.[6]) Within the receiving country, meanwhile, it was semi-public entities—typically managed and partially owned by members of the Saudi royal family—that arranged for the placement of workers.
While the rampant abuse prevailing in the past made the need for reform urgent, the modality of “reform” adopted in recent years threatens to make things worse. As suggested, the trend is toward marketization and privatization. Concerning the former, recruitment processes within Vietnam have become anonymized and market-oriented. If state and quasi-state recruitment agencies are almost certainly still involved—specifically, the Vietnamese Association of Manpower Supply and Department of Overseas Labor, the latter operates under the Ministry of Labor, Invalids and Social Affairs—they are no longer visible on their respective official websites.[7] Also absent is the mention of BLA in all Vietnamese official websites. Instead, the market mechanism has replaced it to recruit workers in a commercial website called: “the platform of labor export to Saudi Arabia” [8] which bears no trace of being part of any state agency. It suggests that the process is being governed by “unmediated” laws of supply and demand in which any person with access to this “platform” can explore, select and apply for these open positions in Saudi Arabia. The state’s enduring responsibility for the placement of these workers and attendant problems of human trafficking and labor abuse—failures documented in full in 2021—are now fully obscured.
In Saudi Arabia, meanwhile, the state has privatized one of the few support services it had previously provided international domestic workers: the provision of shelters for abused women who had escaped their kafeel owners.[9] As investigations from The New York Times detail, until as late as 2023, the Saudi state turned over management of these facilities to a company called Sakan. Per the testimony of those interviewed, Sakan extorted those in its care for money in exchange for arranging their travel.[10]
The same article also gives a sense for the breadth of physical and sexual violence suffered by female domestic workers in Saudi Arabia and the reason that it persists through the present day: to quote the authors, “powerful people profit off the system as it exists.”
Structural Violence and Social Reproduction
In Johan Galtung’s groundbreaking work on structural violence, he traces the structural character of political violence, physical violence and the economic violence of deprivation, malnutrition, and illness (1968). For 21st century domestic workers, however, structural violence expresses itself as well through severe sexual violence resulting in bodily injuries, dehumanization, and forms of suffering largely invisible to the world outside the houses of the kafeel.
In 2019, Nghiêm Hương, a former domestic worker in Saudi Arabia, provided insight into how this structural violence is experienced. In her devastating memoir entitled “Đừng Chết Ở Ả Rập Xê Út,” Hương, from the north of Vietnam, recounts how she came to sign a work contract in November 2014 and all that followed thereafter.[11] Across seventeen chapters, she speaks of how she and others moved to Saudi Arabia dreaming of earning money but ended up enduring graphic abuses—physical, sexual, and psychological in nature. Hương herself describes working under oppressive conditions, over 50 degrees Celsius, not only to take care of the household but also to work on the chicken/cattle ranch that the household owned. Despite violating the terms of her labor contract, she also reveals how she was sold from one kafeel’s household to another. Regardless of its illegality, the latter practice is extremely common and regularly arranged through collaborations between Vietnamese and Saudi commercial entities, private brokers, and the kafeel households. In Hương’s case, her story ended when she faked suicide by threatening to jump from the top of the minaret of the kafeel mansion: Fearing the scandal, her final kafeel agreed to send her home. Tragically, her story is far from exceptional. As one of Vani Saraswathi’s interlocutors from east Africa conveyed in a 2022 article on domestic workers in Saudi Arabia: “You will be raped. You will be beaten. No action will be taken. You will have a child as evidence of rape. Still no action. The police, the embassy, the office all collaborate to make you work only. You have no rights.”[12]
The reality is that structural violence, in both its physical and sexual forms, remains extremely pervasive in Saudi Arabia. Applying Tithi Bhattacharya’s “social reproduction” theory to the international female domestic workers,[13] my interviews and current evidence show that the capitalist market system relies on these workers not only in the production of services, but also in the work of the ladies in the kafeel’s households. These “production of life” tasks include taking care of the family members who work, taking care of the children and the elderly who do not work but are part of the kafeel’s households, and taking care of pregnant women so they can biologically “reproduce” workers for the future workforce. Indeed, it is important to note that domestic workers are not an elite luxury in Saudi Arabia, but a staple and expectation of middle-class life. It is also worth noting that it is in middle class households where abuse of domestic workers is often the worst: Worker testimony suggests that conditions are most intense for those working for “less affluent” large-sized families, where sixteen-hour workdays and sexual violence are especially common.[14]
A sense of scale for structural violence can be had through surveying relevant Facebook postings.[15] As recent as April 2025, searches on the platform revealed users asking questions about “How to escape abusive kafeel.” Of the advice offered, one respondent recommended they “go to the police station, to never return to the house of the kafeel, but return straight to Vietnam”; another warned not to seek out help from Vietnamese living in Saudi Arabia as their countrymen were liable to sell them into a brothel (March and April 2025). Facebook postings also exhibited laments about workers suffering so much that they wanted to return home prior to the conclusion of their contract (February 2025). Female domestic workers also lamented that there is no break for them, compared to male workers who were relaxing over the weekend with their friends (2020).
But what is perhaps most troubling is ongoing concerns over abuses and tragedies that happened as far back in 2020. Even today, these incidents’ past—the death of an underage woman in 2020, the 2021 SOS message via Facebook of a group of female workers (one with an eye injury due to physical abuse) —continue to garner a lot of viewing and sympathy. Similar to the anecdotes compiled by journalists, these artifacts from social media speak to the constancy of structural violence amongst domestic workers in Saudi Arabia. This truth is simply being suppressed through the actions of governments like Vietnam’s.
“Reforms” of Domestic Worker Laws are not Bearing Fruit
In October 2024, a new law on domestic workers came into effect in Saudi Arabia. To what extent, if any, has it changed things on the ground?
Unfortunately, the answer is next to none. To understand why, one need first appreciate that this law is not designed to protect workers. Rather, it was legislated for two purposes: (i) to protect the kafeel; and (ii) to appease the outside world. This is apparent through even a superficial reading of the law in question. To begin, the law does not prohibit passport confiscation. It also fails to specify that work contracts are not transferable amongst kafeel. In addition, the law does not designate maximum work hours per day, mandatory one-day of weekly rest, stipulations on decent living conditions and privacy, and workers’ freedom of association; alarmingly, the law does not assure workers safe access to complaint and justice mechanisms. In particular, workers’ anonymity is not guaranteed in these mechanisms and the online portal where complaints can be filed is only in Arabic and English.[16] Complicating matters further, should a worker attempt to file their complaint in person, they risk being charged with “absconding.” Lastly, even if they do manage to break their contract, one final obstruction remains: Under the new law as under old regulations, workers still need to get prohibitively expensive exit visas to leave the country prior to the completion of their original contract. Moreover, the new Saudi Domestic Workers Law is also lacking in key enforcement mechanisms. And to make things worse, the Saudi Arabia government has recently reduced the penalties for employers who violate safety and health regulations. The gap between ILO Convention #189: Convention on Domestic Workers (2011) and Saudi Arabia’s so-called domestic workers reforms remains far apart.
Conclusions and Recommendations
The bilateral labor agreement (BLA) between Vietnam and Saudi Arabia facilitates systematic abuse of domestic workers. The responsibility that the two states bear for this reality remains, even if both have used gag orders and a combination of marketization and privatization to muddy the waters.
At this stage, it is essential that the terms of the BLA be changed, and that the international community mobilize to advance this end. Members of global civil society must broadcast and demand the swift establishment of a Standard Employment Contract as well as the instituting of proper enforcement mechanisms. Pressure must be put on the government of Saudi Arabia to revise its Domestic Workers Law to align it with ILO Convention 189. The government of Saudi Arabia must also bring sheltering facilities and protocols back under the control of public authorities and take transparent steps toward guaranteeing that these facilities follow best practices. On the side of labor-sending countries such as Vietnam, entities like the United States’ State Department should hold the government of Vietnam to account for its actual performance on human trafficking and not reward their gag order. In deploying market mechanisms, the BLA’s recruitment procedure has served to normalize structural violence and make it harder for the public to detect systemic violations of domestic workers’ rights. At present, workers are left on their own to deal with abusive employers without any legal recourse and state protection. With awareness, public outcry can demand genuine reforms of the BLA and effective enforcement mechanisms to protect these vulnerable domestic workers. It is that awareness we must work toward.
Photo Credit: 2023 recruitment photo on the website of Thuan An Labor Recruitment Company
[1] Vietnam Law and Legal Forum, “Vietnam-Saudi Arabia relations on strong development momentum,” 21 October2024, https://vietnamlawmagazine.vn/vietnam-saudi-arabia-relations-on-strong-development-momentum-72826.html
[2]The 2023 TIP report https://www.state.gov/reports/2023-trafficking-in-persons-report/vietnam/)
The 2024 TIP report https://www.state.gov/reports/2024-trafficking-in-persons-report/)
[3] https://baochinhphu.vn/saudi-arabia-muon-tiep-nhan-them-nhieu-lao-dong-viet-nam-102231019181702009.htm
[4] https://sanxuatkhaulaodong.com/xuat-khau-lao-dong-a-rap
[5] Modern-day slavery: Vietnamese women domestic workers in Saudi Arabia, November 29, 2021, New Mandala, https://www.newmandala.org/modern-day-slavery-vietnamese-women-domestic-workers-in-saudi-arabia/
[6] https://www.business-humanrights.org/my/%E1%80%9E%E1%80%90%E1%80%84/saudi-arabia-east-african-saudi-arabian-govt-officials-allegedly-profit-from-deadly-trade-in-domestic-workers-through-recruitment-cos-investment/; https://www.nytimes.com/2025/03/16/world/africa/saudi-arabia-kenya-uganda-maids-women.html?smid=nytcore-ios-share&referringSource=articleShare
[7] The two key state websites that used to publish news and regulations of BLAs in Saudi Arabia are:
Vietnam Association of Manpower Supply (VAMAS):
https://vamas.com.vn/NguoiDung/TinTuc/timkiem/tabid/272/language/vi-VN/huong-dan-viec-dua-nguoi-lao-dong-sang-lam-viec-tai-a-rap-xe-ut_t221c654n44323 and Department of Overseas Labor (DOLAB):
https://www.molisa.gov.vn/organizational/2230. The private website is: https://sanxuatkhaulaodong.com/xuat-khau-lao-dong-a-rap
[8] This is an English translation of the website’s Vietnamese name: https://sanxuatkhaulaodong.com/xuat-khau-lao-dong-a-rap. The head company of this “floor” is the An Vi Group, which is most likely a quasi-state staffing company: https://anvigroup.com.vn/chung-toi
[9] https://www.business-humanrights.org/my/%E1%80%9E%E1%80%90%E1%80%84/saudi-arabia-east-african-saudi-arabian-govt-officials-allegedly-profit-from-deadly-trade-in-domestic-workers-through-recruitment-cos-investment/
[10] Abdil Latif Dahir and Justin Scheck, “Why maids keep dying in Saudi Arabia”, New York Times (March 16, 2025), https://www.nytimes.com/2025/03/16/world/africa/saudi-arabia-kenya-uganda-maids-women.html?smid=nytcore-ios-share&referringSource=articleShare
[11] Nghiêm Hương, Don’t die in Saudi Arabia, Thế Giới Publisher, Hochiminh City, 2019.
[12] Vani Saraswathi, “If my husband touches you, I’ll kill you” August 2022, Migrant-Rights.Org
[13] http://socialistworker.org/2013/09/10/what-is-social-reproduction-theory
[14] “If my husband touches you, I will kill you”
[15] Vương quốc người Việt tại Ả Rập Xê Út | Facebook
[16] Global Detention Project, “Saudi Arabia: joint submission to the United Nations committee on the elimination of racial discrimination 114th session (25 November – 13 December 2024). Issues related to the human rights of migrants including discriminatory labor policies, gender-based violence, and arbitrary detention and deportation measures,” October 2024
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