Places with large labour like South asia are targeted. Recruiters will go to rural villages in those areas, promise locals astronmical wages (for them) to come to the gulf. Tickets are paid. These people come. To work they need to be
sponsored by a local. This local is entitled to a share of their wages. The share is by agreement (naturally in favour of the local). He also holds their passport, so the worker cannot leave the country without his express permission. The workers work permit is also under his control, so if you make cause trouble for the local your out of the country. So they take some of your wages, they control your movement and have the ability to kick you out. All this power isnt in a goverment or organisation but on a whim of a local. Abuse is widespread.
The large buildings you see in Dubai, Doha, Abu Dhabi have been built through this. The locals dont get their hands dirty in anything. Its why the whole Gulf has such a disproportionate population. Its why its indigenous population is either unemployed or in the public sector. Very few actually work in the private sector. A lot of the unemployed themselves are technically not even unemployed as a most of them have their own sponsors and the Government pays them a lot in benefits.
One last thing there is no limit to the sponsors one can have. I remember when I was in Oman (beautiful country) renewing my visa, it was in the same building where they renew the work permits. I swear to god, this young man, early 20's max, came in with his arms full of passports, went to the desk and said "renew all of them". He had in tow behind him about 20-30 south Asians. The guy i was with who was a local, knew him and said they were all his sponsors.
Not all foreign workers are like this. But the vast poorer less skilled majority are. More skilled workers (Read really skilled: Doctors, Engineers), and westerners are sponsored by their companies.
A couple of the countries have been trying to curb this practise (the need for it is diminishing) and it was lead by Bahrain who banned it a couple of years ago.