Friday, May 13, 2005

Emiratization goals: punish banks that miss quotas? - Khaleej Times
DR ABDUL Rahman Al Aour, Director-General of the National Human Resource Development & Employment Authority (Tanmia), talked about the necessity of punishing banks which did not fill in their quota of nationals as part of the emiratisation process. He said this step would distinguish the banks, which obliged with the quota.
Thus far banks that have respected the quotas have had to compete with banks that have not made an honest effort to do so. It is costly to Emiratize - the evidence is in the failure of banks to meet the targets. As long as all banks are profitable - I'm told they are quite profitable - the viability of the banks that voluntarily respect the quotas is not threatened. But these banks surely are questioning why they should respect the quotas when their competitors do not.

There is an information issue to enforcement. The Emiratization quotas are expressed as a percentage of a bank's total employment. To enforce the quotas Tanmia needs to know both the number of employees and which one are nationals. The UAE (or, rather, the emirate of residence) knows very well how many nonnationals each employer has - because employers are the sponsors of work visas. Is that information accessible to Tanmia? It's a question the media should ask.

Ironically, information on the number of nationals employed by a firm is not readily available. At least until recently Tanmia had to rely on the firms to self report these numbers. Unlike countries with an income tax there is no ready way to match workers to firms. In principle, the UAE pension system has the information - because nationals that work in the private sector are part of the federal pension system. The media should ask whether Tanmia has access to that information.

Another complicating factor is the rate of job change by nationals which is quite high.

I am not an advocate of Emiratization quotas. Here's a sketch of my suggestions for achieving Emiratization goals.

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