Tuesday, May 17, 2011

What the head of the IMF can teach us about Emiratization

The head of the IMF, Dominique Strauss-Kahn, is under arrest in New York on charges of attempted rape. DSK, as he is known in his native France, was denied bail today. The judge was convinced by the prosecution's argument that it would be next to impossible to extradite him from France, and therefore he was a flight risk. So, the man who is alleged to have attempted to rape a maid in his $3,000 a night Times Square hotel penthouse, remains in a Harlem Rikers Island jail cell.

Were DSK the same in every way except that he was an American, I suspect he'd be out on bail, and back in a cushy hotel room. It is because it is difficult to extradite someone who has the means to fight it, that he remains in jail without bail. Rights can make you worse off.

I've written the same thing here about the disadvantage Emiratis face in the private sector labor market. As one example, an expat does not have labor market mobility within the UAE. Their visa is tied to the company that employs them. But Emiratis are free to change jobs, which makes firms reluctant to hire and train them. Or if the ex pat does not perform, there is nothing stopping the firm from terminating them. But firms fear that it will be difficult to fire an Emirati, so they are reluctant to hire them in the first place.

Rights can make you worse off.

A few more nights in jail, and I suspect DSK would willing give up his right to fight extradition. The trouble is, there's no way for him to make that a credible promise.

If the UAE is going to make it easier for nationals to find work in the private sector, then it's going to have to either give ex pats more rights or nationals fewer rights.

DSK reminds me of Saudi taxi drivers. You can be harmed by your own rights.

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1 Comments:

Anonymous Anonymous said...

All the UAE has to do is DOWNSIZE it's economy and it's private sector.

Start refusing to renew licenses, and renew only those that meet the emiratization mandates.

THATS what needs to be done.

7:13 AM  

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