Friday, June 10, 2005

Emiritization: mixed messages :: Gulf News

Dr Abdulkhaleq Abdullah, professor of political science at UAE University, Al Ain, writes:
The public is perplexed by one official who says banks must abide by emiratisation regulations and another who assures them that this is not the official policy of the government.

Then we hear a third official criticising the two officials and applauding the achievements of the Cabinet Committee on Human Resources Development in the Banking Sector before singing the praises of local and foreign banks for abiding by the Cabinet's directives regarding emiratisation of this vital industry.
He tells this story:
Following the inauguration of Careers UAE 2005, General Shaikh Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Minister of Defence, stopped by the stand of a wholly owned national group of companies that employs more than 2,500 people.

He asked a Zayed University graduate and an emiratisation officer in the group about the percentage of UAE nationals in the group's workforce. She replied two per cent.

Shaikh Mohammad was astonished by the answer and asked Ahmad Al Tayer to verify the meagre figure. Al Tayer is Chairman of the Cabinet Committee on Human Resources Development in the Banking Sector and is deeply involved with the emiratisation process.

Al Tayer confirmed the figure and said it is the prevalent percentage in the private sector. Before he left, Shaikh Mohammad approached the graduate and said: "Next year, I expect the percentage of nationals in your group to be 50." And she replied: "God willing, it'll be 100 per cent."
The "wholly owned national group of companies" referred to above has a workforce that is 98% foreign because foreign workers of the same quality as national workers can be hired more cheaply. Many nationals counted as unemployed would in other countries would not be counted as labor market participants; labor market participants are those who are willing to accept jobs at prevailing wages.

It is understandable that the low rate of employment of nationals is considered to be a social problem. But the problem cannot be solved by the wave of a hand. Nor can it be solved by edict. Mandating firms hire nationals turns jobs into entitlements. When a job is an entitlement the critical linkage between effort and reward is broken.

Breaking this linkage in turn cascades into education. We can work on reform of the testing methods, of curriculum, of teacher quality, of career guidance. But all that is for naught if students and parents do not see a connection between student learning and job market success. Education takes place as a partnership between the school and the student. The education should be accountable for its performance; but it should not be held accountable for lack of student effort.

The roots of this problem lie outside the school system. In a healthy economy, citizens are beholden to government not for jobs, but for the economic environment that facilitates free exchange, that rewards merits. Externally the UAE is free trade; internally, towards its citizens, it is not. The UAE is a country of great wealth. It can share that wealth with its citizens without using entitlements that create adverse incentives.

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Blogger Keefieboy said...

Surely you don't think that Emiratis have unreasonably high expectations of jobs in the private sector? Nah, thought not.

9:57 PM  
Blogger John B. Chilton said...

No, simply high expectations relative to the workers holding those jobs. Very high. Which is why they are not working in the private sector.

10:12 PM  
Blogger ESLArabia said...

I'm writing a paper for SUNY on UAE women, work and education. Your blog has been very helpful. Why should the private sector employ nationals when expats are virtually indentured servants?

6:05 PM  
Blogger Gulf jobsites said...

nice one Gulf Job Sites

3:19 PM  

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