Cappelli helps pull Bahrain into the future


Photo by Mark Stehle

Peter Cappelli is no stranger to major business management reform projects. He had a hand in the proposal to improve the Philadelphia Convention Center and helped to shift Pennsylvania’s court system from local to state control. For years, he helped run the Department of Education’s National Center on the Quality of the Workforce, based at Penn.

Earlier this year, he was hand-picked to serve as Senior Advisor in employment policy to the Kingdom of Bahrain, a small Middle Eastern country in the Persian Gulf, east of Saudi Arabia.

Cappelli, who is the George W. Taylor Professor of Management and director of the Center for Human Resources at Wharton, said he’s never taken on a task so large in scope. “One of the big goals is [a] more democratic and open society,” he said. They have been a reasonably stable country in the Gulf and have been making reforms toward modernization.”

These steps are necessary, explained Cappelli, because times have changed since petroleum industry jobs were so plentiful that work was available even for many expatriates from Southeast Asia and Bangladesh. As oil reserves have started to expire, jobs have disappeared and unemployment has risen. Cappelli said that unemployment numbers in Bahrain may run as high as 15 percent – an estimate, since no formal employment poll has been done.

In response, the Bahrainian government has decided to minimize the country’s reliance on petroleum-based products and expand its foreign investment and free trade.

Cappelli is leading the team that is helping Bahrain set up an economic infrastructure to address many of the basic questions of employment policy. For example, should the country set up protection for the unemployed? How should companies hire and fire employees? How would the government handle layoffs?

Cappelli explained that his work converges with efforts by Bahrain’s King and Crown Prince to democratize the country. Unemployment is “a pressing problem,” said Cappelli, “but it’s tied to all these political issues.”

Helping to craft human resource and management policies to counter the high unemployment numbers may be daunting, but Bahrain has a good track record. “In the Gulf, [Bahrain] had one of the best education systems in relation to its competing countries,” said Cappelli. “It became the banking center for the Gulf.”

The next step for the country, he added, is to find employment for those out of work by being an attractive place for foreign capital to come and set up shop. “You have to be near the world standard in terms of employment,” he added.

Cappelli said that in Bahrain, when change comes, it comes rapidly. In the span of about 15 years, since the advent of OPEC, Bahrain exported enough petroleum-based products to fit into part of the Western economy. “The pace of change there has been faster than the pace of change here,” he said.

Cappelli, who has been at Wharton since 1995, had been to the Middle East before, but was surprised by many cultural similarities between the two countries. As it is here, advertising and commercialism permeate the culture. He said, “The day-to-day lives of people are not so fundamentally different.”

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Originally published on October 30, 2003