Dubai Business Cramped By 'Emiratization'

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

10 May 2005

When Dubai and the United Arab Emirates (UAE), of which it forms a part, began an 'emiratisation' jobs program two years ago, ministers were very reassuring, but employers now say that nationals are being parachuted into positions for which they are not qualified.

Only 17% of the 4 million people living in the UAE are nationals, and only 40% of these have college degrees. Although the employment market in Dubai in particular is booming, there are currently 32,000 unemployed nationals (4.7%), with 6,000 graduates coming onto the market annually. These figures mean that there is an inadequate supply of nationals, skilled or otherwise.

Offshore jurisdictions, particularly in the Caribbean, have frequently attempted to increase opportunities in their financial sectors for local inhabitants, but with only mixed success. The difficulty of creating effective specialist training units in a small economy is a hard barrier to overcome, and affirmative action employment programs often have the reverse effect to that which is intended. It seems that the UAE is repeating the error.

Businesses complain that nationals are unhappy with entry-level jobs like reception or office help positions and consider this type of work beneath them, no doubt encouraged by the policies of Tanmia, the government's emiratisation agency: The National Human Resource Development and Employment Authority.

Tanmia is investing a lot of time and money in training candidates training them for the skills that are required, but the imposition of quotas for the employment of nationals is a blunt weapon, even if the quotas are more stringent for the government's own agencies than for private firms. The insurance and banking sectors have been ordered to increase their local nationals by 5% and 4% respectively each year.

An anonymous hotel manager complains that there is growing pressure to hire more locals. “We try to be as proactive as we can but how can you hire locals who would not touch alcohol and feel beneath them to make hotel beds? If they try to slap official quotas on this industry, it would be a farce.”

Etisalat, the semi-governmental telecommunications company, is said to have laid off about 150 of its largely Asian workforce in order to meet its quota of 50%.

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