Thursday, April 27, 2006

Labor minister: ‘UAE nationals should be the biggest segment in demographic structure’ :: Khaleej Times

UAE nationals should be the biggest segment in the country's demographic structure, according to the UAE Minister of Labour Dr Ali bin Abdullah Al Kaabi. Spelling out this new priority, he said, his ministry will soon task a committee to draft a viable strategy for achieving this purpose by 2015.

"I want UAE nationals to be the biggest segment in the country," he told the opening session of the First Meeting of the Labour Market Committee yesterday at Emirates Palace Hotel.
This goal - UAE nationals should be the biggest segment in the country's demographic structure by 2015 - will not be achieved by 2015. Indeed, I doubt that much will have changed by that time. A goal this unfeasible lacks credibility, undermining the likelihood that much if anything will be achieved. The likelihood of substantial progress will be enhanced by setting achievable goals, and understanding how we came to the present state of affairs.

What are the present state of affairs?

1. Upwards of 80 percent of the population of UAE is nonnational.

2. Citizenship is granted only to the children of fathers who are nationals.

3. Less than 3% of private sector jobs in the UAE are held by nationals.

4. The UAE receives the labor services of foreign expats at wages and working conditions that are close to the source-country wages for those salaries.

5. UAE nationals prefer not to take private sector jobs at these wages. The UAE is a very rich country, and it is generous in making sure all nationals are well off whether they work or not.

6. For the same quality of workers, employers - as with any buyer - choose the lowest-cost alternative. Thus, employers do not willingly offer UAE nationals wages and working conditions that differ from the terms the employers get from expat workers.

7. UAE nationals benefit enormously from low-cost expat labor. Let's begin closest to home and look at domestic servants - maids, drivers, cooks, gardeners. If national families are not willing to give them up, you have a natural national constituency against the achievement of the labour minister's goal.

What about in retail - what will life be like without low-cost labor to staff stores, restaurants, and hotels? Citizens may point out we don't need so many outlets. But a natural political constituency exists to keep expats in those jobs as well: the national business owners whose profits depend on low-cost labor.

Those nationals who have invested in real estate would also be actively engaged in undermining any policy goal that sought to make nationals a majority by 2015. Because the only way to achieve that goal is to send a lot of working expats home.

8. National families are having fewer children today than they were 20 years ago. Children take time to rear, and there are so many things to do with your time today whether it is leisure or work. Reproduction is not going resolve the demographic imbalance.

So what is politically feasible? I suggest that the labour minister place limits on the issuance of new work visas. Even a modest limit will create a lot of complaints from firms that are accustomed to bringing in cheap labor from abroad. Firms that wish to hire would have to turn inwards to look for labor. The source of new workers would be nationals and they would command premium salaries. Firms would also reconfigure their operations and substitute away from labor. We can imagine that these firms would place pressure on the government to make it easier for expats to leave one employer and join another -- a policy I have long advocated.

A limit on work visas would quickly reveal where the political pressure points are, and demonstrate very quickly the degree of resistance there will be to stronger measures to remedy the demographic imbalance.

A fundamental question is: what's wrong with demographic imbalance? My sense is that the true concerns are culture based and are not being aired in public. Usually you can't make progress on a goal unless you are articulate your purpose and make a convincing argument for why a solution needs to be found.

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Blogger Keefieboy said...

I know that many locals are resentful at being a minority in their own country (I would be too). However, this is a result of deliberate Government policy. If they seriously want to increase the porportion of locals to expats then they need to do one of two things (or a combination) - create more nationals by making it easier for foreigners to acquire a UAE passport, and reduce the size of the expat workforce.

It's estimated that the UAE's population will rise to five million by 2017 - that's more or less permanent residents, not transient construction workers. So they need to find 2.5 million UAE nationals from somewhere (against an existing figure of less than half a million), or seriously scale back the current development projects and cancel or delay future ones.

Is problem.

11:06 AM  
Anonymous Ethel said...

Thank you for your article, quite effective information.

10:29 PM  

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