UAE: Economic Analysis for Public Policy

Executive summary

United Arab Emirates nationals have overtime preferred to work in government related job opportunities rather than working in privately run enterprises. This tendency of the Emirate population of ignoring jobs under the private sector has been triggered by the various factors facing the job market within the Asian region as a whole. As it has been observed, most private companies within the United Arab Emirates region have adopted to recruit foreign expatriates while at the same time ignoring the emiratis within their job opportunities, which has led to a very high instance of foreign worker inflow to most private companies within these countries as compared to the number of nationals in such private companies. More specifically, this trend of having many foreigners working in private companies within United Arab Emirates region has been caused by the need for globally competitive employees in such private companies; where the nationals lack competency regarding the jobs associated with such private companies.

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In addition, most of the government jobs within the United Arabs Emirates offer a variety of benefits to their employees which leads most nationals in the country prefer working in government jobs than in private jobs. For instance the higher salaries, lower working hours, pension schemes and job securities among others offered within government employment sector motivate most nationals towards working for the government thus neglecting the private sector where there are no such incentives.

However, policies have been devised to motivate and encourage emiratis to work within the private sector rather than congesting under the limited government employment scale; as there are still job vacancies within the private companies despite the nationals not being interested in them. This process of engaging the Emiratis under the private sector jobs referred to as emiratisation should be seriously addressed within the country, so as to avoid laziness with in the region and the same time increasing the county’s income per capita.

Introduction

In the past few decades the Emiratis have been observed to engage in government job opportunities while ignoring the jobs within the private sector. This trend of most nationals in the United Arabs Emirates of neglecting the private sector as far as job opportunities are concerned has been caused by the low wages and job insecurities prevailing under the private job markets. More so, most companies within the private sector in the United Arabs Emirates claim to lack trust in the Emiratis and that they are less productive as well as being less experienced in terms of work performance. In addition, the low absorption of the emiratis within the private companies has also been triggered by the low education levels among many Emiratis which makes them lack the credentials which the private employers need; so as to employ the workers within their companies. On this basis therefore, the trend of employment within the United Arabs Emirates has been observed to further concentrate in government jobs due to the incentives offered under public jobs which are absent under private employment (Camerapix, 1998).

The problem

Perhaps, the cheap and efficient foreign labor has initiated the booming of foreign worker populations in most private companies under which many private employers prefer such workers; thus neglecting the nationals which are less efficient with regard to the production process. It should also be noted that most private companies within the United Arabs Emirates region are internationally oriented; a case under which the nationals have been observed to be less competitive within the global context thus leading to private employers preferring foreign expatriates over local ones.

First, the poor education system within the United Arabs Emirates is the main cause of the low employment rates under the private sector for its nationals. It has also been observed that the education system within the United Arab Emirates has not been properly designed, to address the issue of global employment competence under most production processes. On this basis therefore, the job trend within the United Arabs Emirates has followed the adoption of the qualified and professional personnel in most private companies from foreign countries while neglecting the nationals who seem to be less efficient and competitive as they lack the required training and skills. More specifically, the poor educational skills and training necessary for enhancing professionalism and efficiency within the production process has hindered the absorption of most nationals under the private companies in the country (Abrahart &Tzanatos, 2002).

In addition, the United Arabs Emirates labor market has been much influenced by the availability of the proficiency of individuals under the kinds of work involved in the production processes in many companies. As it is in the current contemporary technological world; most private companies are involved in the technological production processes under which highly qualified personnel are highly required to enhance efficiency within the production process. Based on this, the trend of employment within United Arabs emirates is justified in the sense that most private employers prefer foreign workers who are efficient during production; on top of being internationally competent within the production process (Abdalla, 1996).

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Under this perspective therefore, the education system in the United Arabs Emirates has to be reviewed, so as to ensure the accrual of the necessary skills and techniques useful under various production processes within the private sector so as to secure positions for the nationals under the private home companies. More specifically, the education system should address the issue of modern technology so as to prepare the nationals adequately within the production processes involved in these private companies. In this case, the nationals should be pressured to undergo specific training and selected educational programs so as to prepare them adequately in working within these globally oriented private companies in the course of their production processes (Khan, 2005).

Secondly, the poor incentives offered by the private companies within the United Arabs Emirates discourage many nationals from working under the private sector thus opting to work under government jobs which have better incentives. It has also been observed that most private companies offer very poor salaries and wages to the nationals; as they claim that the nationals are less productive which discourages many Emiratis from working under private companies. On this basis therefore, the low number of Emiratis in many private companies has been caused by the low benefits accrued from such private companies leaving them with only the option of preferring government jobs and neglecting the private ones. More so, public sector jobs in the United Arabs Emirates are accompanied by a number of allowances which attract many nationals and thus triggering them to neglect the private sector jobs which lack such allowances (UN, 2003).

In addition, the job security offered under the public sector jobs attracts many nationals as opposed to the private sector jobs which lack such job securities. In this perspective, it would be observed that, many individuals within the United Arabs Emirates engage in working within the government sectors thus neglecting the private sector jobs; which has been influenced by the security of the jobs under the two sectors. Generally, the limitation of most Emiratis regarding the private job securities has been specifically influenced by the level of security for the jobs within the two sectors, where the sector having high job securities attracts more nationals than the sector with low job securities (UAE, 2003).

Lastly, the work force patterns within the United Arabs Emirates are influenced by the social handouts offered by the employees under the sectors of economy in the country. It has further been observed that the job opportunities within the government sector are accompanied by a variety of handouts and allowances which help to inflate the associated salaries for the general public; leading to a large number of Emiratis engaging in government jobs and neglecting the job opportunities under the private sectors which have no or very few handouts and allowances advanced to their employees. More so, the government has been extending some of the social aid to the unemployed citizens which encourage many Emiratis in preferring to work under government employment, as there would be more benefits in working under the government as compared to when working under the private sector employment sector (Shihab, 1996).

The current situation

As it has been revealed from research; most youths in the United Arabs Emirates prefer to work under the public sector than working under the private sector. This tendency of many Emiratis preferring to work under the public sector has specifically been triggered by the higher level of benefits accrued under the public sector than within the private sector. Generally, the high levels of employment rates for nationals under the public sector has been influenced by the favorable working conditions and benefits accrued from working under the public sector as opposed to the private sector employment (Shihab, 1990).

As it is in the United Arab Emirates is that the nationals generally prefer to work under the government sector than the private sector as a result of the many benefits accrued from the government jobs than under the private jobs. As it has been happening in the past decades; most Emiratis have been observed to prefer government jobs even up to date as this trend has been influenced by the perception built on government jobs by the nationals as being more promising than the private ones. In general terms the work patterns within the United Arabs Emirates have been greatly influenced by the high levels of benefits accrued from the government jobs as compared to the benefits accrued from the private sector. In this respect therefore, the high benefits accrued from the government employment has led to the significant high levels of citizen employees within the public sector; as compared to the number of employees under the private sector Sekhri, 2010).

Below is a Table showing the number of nationals under both the private and public sectors within the United Arabs Emirates with regard to their gender

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Sector No. of male employees No. of female employees
Public 800,000 200,000
Private 90,000 10,000

The solution

Meanwhile, the United Arabs Emirates government has devised policies so as to encourage Emiratis to join the private sector and reduce the high levels of unemployment within the country. In this respect therefore, the general Emiratisation policy has been developed by the United Arabs Emirates Government to create more conducive conditions in the private sector so as to accommodate a higher number of nationals under the private job market. This policy was developed to address the various aspects which have been previously hindering the Emiratis from working under the private sector; where a significant increase in the number of nationals working within the private sector is expected to rise and reduce the high number of unemployment within the country (Maloney, 1998).

In the first place, the United Arabs Emirates government has induced the private sector to introduce the provision of pension schemes to its employees. By so doing, the government will have created an incentive to the nationals working under the private sector. As a result of employing this, many nationals will be encouraged to work within the private companies thus discouraging the congestion within the public sector; only under which the reduction of unemployment levels would be realized. In general terms, the government has induced the provision of pension schemes within the private sector; which would attract many Emiratis towards the private sector which would greatly solve the intrinsic problem of the high employment levels in the country (Khan, 2005).

Another very important aspect addressed under the policy of Emiratisation is the provision of educational systems which will enhance the incorporation of the modern technology among people in the course of various productive activities. As it has been observed, most of the production within the private sector within the United Arab Emirates is technologically oriented; a case to which the nationals have to be adequately equipped with the relevant technology involved in the production process. More specifically, the education system within the United Arabs Emirates is being modified to incorporate the modern technology under the education system so as to ensure the nationals are equipped with the relevant knowledge and skills useful in the production process under the private sector. Generally, the education system in the MENA region has been greatly addressed so as to enhance the creation and development of people who are very productive using the current modern technology (Kabbani &Tzanattos, 2006).

Further, the policy of emiratisation has addressed the issue of wage harmonization and inflation both under the public and private sectors. In this case, the government has been trying to establish minimum wages for employees in all sectors in the economy where all the employees whether under the private or the public sector should earn the same level of wages. More so, the government in general should devise a system of compensating the lowly paid employees under the private sector so as to encourage the nationals to stop the biasness in working under this sector. For instance, if the private sector is offering $100 lower as the wages to its employees, the government should compensate the $100 to the employees working under the private sector which will encourage many nationals not to be idle but prefer working even under the private sector. By so doing, the nationals would be encouraged to work in all the sectors of the economy covering both the private and the public as the benefits accrued would be comparable. In addition, the key aim of this policy is to encourage the Emiratis to work under the private sector which for a long time had been neglected due to the poor wages given to the employees; leading to the high levels of unemployment within the country as a result of the limited vacancies under the public sectors (Cameron, 2003).

More so, the emiratisation policy addresses the issue of eradicating the low wage expatriate employees under the private sector whose work is not too technical to be done by the local workers. By so doing the vacancies created by the eradicating the foreign workers would be occupied by the local workers, which would help reduce the level of unemployment among the nationals thus increasing the number of workers working under the private sector. More so, the restriction of work visa issuance has been effected which in the long run would help to reduce the number of foreigners working within the country. This is the case as this would imply that the private sector in the country will rely on the nationals for labor and this would help in increasing the level to which the Emiratis will be working within the private sector (Camerapix, 1998).

Lastly, the policy of emiratisation has addressed the issue of visa issuance to the foreign employees which private companies have to employ. In perspective, the government should encourage the private investors to employ local employees as there would be more advantages as compared to employing foreign ones. More specifically, the private companies should be shown the importance of acquiring the locally available labor which would be more reliable as there would be no inconveniences within the renewing of work visas. In such a case, there would be less interruption within the running of the activities under these private companies as the local labor would serve for longer times with minimum interruptions. (Abrahart &Tzanatos, 2002).

The emiratisation policy has been having various strengths under which its implementation would be effective in ensuring the increased absorption of nationals within the private sector under the United Arabs Emirates economy. For instance, the adoption of the policy within the country is very possible in the sense that the United Arab Emirates is a member country of the MENA region where there are enough natural resources like oil among others. This is the case as most private investors have been observed to frequent; as the policy to absorb nationals under the private sector would work effectively. More so, the policy has strengths for the fact that the government is directly involved in its implementation and by so doing it is believed to be effective in ensuring an equitable distribution of employment opportunities both to the public and the private sector (Abdalla, 1996)

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However, the emiratisation policy is faced with various weaknesses which seem to inhibit its effective implementation within the United Arab Emirates. As it has been observed, the policy has not been fully adopted by the private sector because of the ignorance of most nationals within the country; which has been triggered by the availability of the adequate natural resources which avails all the basic needs to the people. In this respect therefore, the policy has not been effectively realized because most people have not been willing to work within the private sector under all circumstances. Further, the policy has not been able to work effectively considering the fact that the country has many multinational companies which operate internationally such that the restriction of the people moving in and out of the country is inevitable. On this basis the policy to restrict the issuance of work visas in to the country would not work effectively, as the workers from the mother countries of the multinationals could be restricted under all circumstances (Abdelkarim, 2001).

Conclusion

As it has been revealed the United Arabs Emirates pattern labor market is generally influenced by the benefits accrued from the various sectors within the economy. On this basis, most workers within the country are in the public sector due to the various benefits accruing from this sector as opposed to the case of the private sector which has no or very few of these incentives. More specifically, the good salaries and wages, job security and handouts among others found in the public sector have played a significant role in ensuring the high number of employees under the public sector as opposed to the private sector. More so, various policies have been devised to create an equitable distribution of job opportunities among the citizens within the United Arabs Emirates; which would lead to the absorption of more nationals within the private sector.

References

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