Wednesday, March 07, 2007

Unemployment in the UAE

As reported in Gulf News, according to Frederic Sicre, executive director of Abraaj Capital,
"The GCC countries need to create 100 million jobs up to the year 2020 to sustain the current rate of unemployment of 15 per cent.

"Such rates have never been achieved before by any country."
Such definitions of unemployment have never been used to measure unemployment.

The fifteen percent includes those who are not actively looking for work because the wage is below the wage they are willing to accept. That group is not unemployed, they prefer not to work at the prevailing market wage. And the 15% also includes those who would not be looking for work except that the government pays more than it needs to to fill its requirements. The government could solve that part of the unemployment "problem" by reducing the wages it pays.

The evidence is right there in other news articles from the same day (today):

* Skills shortage threatens to stall oil and gas boom
* 25pc salary increase for UAE University national professors

That is, (1) there are jobs that are going begging and (2) the government pays more than market. Thus, natural questions to ask are: why don't young GCC residents train for work in the oil and gas sector, and should we be surprised that there are queues that form for government jobs (which distorts the unemployment numbers).

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2 Comments:

Anonymous Sharron said...

This will not work as a matter of fact, that's what I consider.

1:46 AM  
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