Nationality and the rental market :: Khaleej Times

Landlords believe that some nationalities make better tenants than others. They also believe that many persons prefer living in neighborhoods with others of their nationality.

This has always been so. Yet the article was given the headline "Now, landlords turn choosy on tenants nationality." Perhaps that's because discrimination has become cheaper to exercise now that government rent controls have been put in place, creating an apartment shortage. When there's a line waiting for your services, and you can't raise the price, then you can afford to be choosy.

MOE changes: insider scoop :: An Emarati's Thoughts

An Emarati says he's got the scoop on what Shaikh Nahyan Al Nahyan has planned to shake up UAE government schools. The plan An Emarati outlines makes sense.

As is true anywhere (my comparison is with the U.S.) the greatest difficulty will be to make the plan work in the rural areas where there isn't competition, and it is difficult to attract the best teachers.

What I advocate for university-bound products of the government schools is a year or two of study at a prep school (where the prep schools are vying for students, and part of this vying is success in placing them in universities) before going on to university. But that won't address the problem of the disproportionate number of males who quit school before graduating high school.

Freehold law 'need of the hour' :: Gulf News
Buyer beware

Quote:

Dubai : Absence of freehold law and formal regulations are likely to discourage buyers of freehold properties in the coming days, following a dispute between Emaar Properties and some customers living in Dubai Marina.

A dispute over service charges is forcing potential buyers to reconsider their decision or wait until the laws are in place. Most developers do not declare service charges at the time of sale, but fix them later at a higher-than-expected price, to the dismay of the homeowners.

"This is happening due to the absence of transparent legislation and lack of regulation in the market," said an eminent lawyer, requesting anonymity.

"Further delay in issuing property laws to regulate the growing freehold market will create more confusion and uncertainty among new investors; also it will allow certain developers to take the customers for a ride.

"This is a wake-up call to homeowners and a lesson for new investors to force the developers to mention this in the contract."

I agree that there is ambiguity surrounding freeholds. With ambiguity comes a responsibility for buyers to look for hidden costs that have not been spelled out by the seller.

It sounds as if contracts did state that service charges would apply for services for the upkeep of common property, but did not spell out the level of those charges. And it was left open how those charges would be set - and, equally important, how it would be determined that promised services were delivered. These are issues that are difficult to deal with in any legal setting.

Would a freehold law be a sufficient remedy? Law is not a magic wand. Isn't a well-developed independent judiciary as important? A freehold law might have some benefit in simplifying enforcement by bringing standardization to contracts. But it would not itself develop a judiciary that could enforce contracts, and it would not necessarily address the question of enforcement when there is substantial government ownership in companies such as Emaar.

Emaar is a large company with many properties. It has an interest in maintaining a reputation for honest dealing. (And Dubai's reputation is linked to Emaar's.) Thus, it is not necessarily the case that there is a need for a law or for a judiciary. Rather what is necessary is that Emaar can build and maintain that reputation. To do so it needs to demonstrate that it is carrying out the spirit of the contracts it enters into. And it needs to monitor the claims and promises of its sales agents.

Emaar may be doing all those things. It also has an interest in making contracts straightforward to external interpretation. Otherwise, it risks losing its reputation when buyers' complaints about high service charges have more to do with every buyer's preference for a low price than with a failure on Emaar's part.

Sharjah taxi fares up :: KT

Dubai and Sharjah taxis have raised fares. Not surprising given the 35% increase in petrol prices.

Quote:

Following in the footsteps of Dubai Transport Corporation (DTC), the Sharjah Transport Corporation (STC), too, has decided to adjust taximeters, effecting an increase of 10 per cent in the fare. Speaking to Khaleej Times, an STC official said that Dh1 would now be levied after every 800 metres instead of the earlier 900 metres. "The decision will be implemented in a few days time," he said, and confirmed that there would be no change in the starting fare, which would continue to be Dh2.

More:

"Drivers who refuse to take passengers to their desired destination are fined between Dh100 and 200," he said, adding that, at present, the corporation had 2000 drivers.

Why would drivers refuse to take passengers to their desired destination? If the driver is not compensated entirely by salary, but shares in the revenue or net revenue the driver would decline to take a passenger to a time-consuming destination or a destination where he or she is not likely to find another find another fare. (One case of the latter is the restriction the emirates have on taxis from one emirate picking up fares in another emirate.)

Put yourself in the shoes of such a driver asked to contend with this.

Law sought to halt visa trading :: Gulf News

Quote:

Dubai: The Labour Ministry is hoping to push through legislation to punish owners of bogus companies, which are used to illegally sell work visas to expatriates, Gulf News has learnt. Humaid Bin Deemas, Assistant Labour Undersecretary at the Ministry of Labour and Social Affairs, said current ministerial decisions were not enough to stop bogus companies. "At present if we can prove a UAE national owns bogus companies and is using them to sell work visas, we can halt all his company's transactions with the ministry."

Bin Deemas said he did not have available statistics on how many UAE nationals had been dealt with in this way, but said the procedure was not enough to halt the practice. "We want a law to punish this," he said. The official said there was political will to see a law through.

The fact that there are foreign workers willing to pay for a work visa tells us that those who gain admission to work in the UAE are better off than they are in their home countries. Likewise, there are companies who want to hire more workers, but are not able to get more work visas from the ministry are also willing to pay for more work visas. The buyers and sellers of work visas gain from the transaction. Where are the victims of trade in work visas?

At present, the number of work visas issued is determined by a process in which companies apply for visas and must justify the number based on the number of workers they require to operate their business. The ministry reviews the application of each company and decides the number of visas it will issue to the company. The result of this process has been that not all companies requests have been met in full. It is the approval process that has resulted in binding limits on work visas that has created the business opportunity of the so-called bogus companies to apply for work visas, giving bogus justifications for seeking the visas.

Criminalizing trade in work visas is only one way to shut down this trade. The ministry could kill off the trade in work visas in two other ways. It could raise the fee it charges for a work visa. (This is in fact what it is being contemplated for work visas for domestic help.) Or it could become less restrictive in issuing visas.

The UAE of course has a very large foreign population. Total population in the UAE is around 5 million, 80 percent of which are foreigners. Foreign workers in the UAE make up 1 percent of all workers working abroad worldwide. It is probably the case that an average UAE citizen would gain materially if even more foreigners were allowed to enter the country; but the same average citizen already believes, quite understandably, that local culture is under threat and would not support relaxing limits on work visas.

Some might object that an increase in the work visa fee would increase costs and push up prices. Clearly costs would increase, but mostly this would result in a transfer of business profits to the government that would not translate into higher prices. The reason is that businesses are currently constrained from expanding because of bottlenecks in the issuance of work visas. The increase in fees would defuse this desire to expand, but would not necessarily result in a cut in production that would drive up prices.

Either way, criminalization or increasing fees, you would be cutting into the profits of UAE nationals who own businesses.

Visa fees for maids, drivers may double :: Khaleej Times

If you've never lived in the UAE, here some of the key facts to know in order to begin to imagine life here.

1. 80% of the population are not citizens and never will be.

2. 90% of the working population are noncitizens.

3. And, as the Khaleej Times reports today, an "official said domestic servants and others falling in this job category constituted 8.2 per cent of the labour force in the country."

Oman petrol stations shut taps for Al Ain taxis :: GN

OmanOil has tired of the cross border arbitrage brought about by the substantial difference in petrol prices in the UAE and Oman. Pegging its price below the UAE price was draining its coffers. UAE taxis will no longer be allowed to buy in Oman.

Ironically, the lucrative illegal export of incredibly cheap petrol from Iran into the northern Omani province of Musandam continues.

Why is the Dana Gas IPO so oversubscribed?

To put it another way, investors appear to believe that the IPO is substantially underpriced. Why would the founders of Dana Gas underprice the IPO? Don't they want to realize the greatest gain possible for themselves from going public?

I asked this question to a colleague in finance. He had a ready suggestion. Could it be that the founders of Dana Gas are intentionally giving away wealth to GCC citizens? Could it be that the founders are part of the ruling class that controls the oil resources, but also distribute some of the wealth back to citizens in order to retain their support? Other ways of sharing the wealth include obvious ways such as increased social support for citizens on low incomes, and less obvious ways like paying citizens above market salaries in government jobs, or subsidizing the price of petrol at the pump.

Note that an underpriced IPO that places limits on participation by noncitizens - like Dana Gas - is similar to the idea of making each citizen a stockholder in the country's oil wealth. See my recent post here for links that elaborate on this idea.

Jeddah residents outraged by recurring power outage :: Arab News

The failure of service pales in comparison with what has taken place on the other side of globe in New Orleans. Nevertheless, the Jeddah and New Orleans cases raise the same question: Is the value of uninterrupted service high enough to justify the cost?

On especially hot days the electricity system serving Jeddah cannot meet demands on the system created by the heavy use of air conditioning. The result is denial of service - partial blackouts. Somehow I doubt that electricity customers are willing to pay what it would cost to make the system fail-safe. And I suspect we are still a number of years away from a system that would make it feasible to offer individual households the choice of uninterruptable service at a premium price.

Just as we know that Jeddah will experience a few especially hot days each summer, we knew that a massive storm would hit New Orleans some day. We do not build water, communications and transportation systems that can withstand all catastrophes. It's not worth it.

The next question is should New Orleans be rebuilt? I suspect not. I am sure, however, that it is not worth the cost to the public to create water, communication and transportation systems that make New Orleans as safe as living in areas which are less prone to storm damage.

Rebuilding Chicago after Mrs. Leary's cow kicked over a lantern made sense. Putting New Orleans back like it was doesn't.

Was 30% price hike justified? :: KT

The Khaleej Times points out that neighboring countries have not increased the price of petrol to consumers despite the run up in the price of crude, and their retail prices have been unchanged for years in many cases:

Across the border, Bahrain, with far less reserves, has not [raised the retail price] and, in Saudi Arabia, the retail price of gasoline has remained at 99 Halala per litre for nearly 10 years.

Oman, on the other hand, did hike diesel prices by as much as 40 per cent earlier this year, but the move was not linked to rising prices in the world market. In fact, petrol prices in Oman have virtually remained unchanged for years and the government had been forced to increase the diesel price in May only to check what it said was a large scale smuggling of the fuel to neighbouring countries where the rates were considerably higher.

One major difference between these countries and the UAE is that the nationals here are only 20% of the population. Thus, in the UAE, low petrol prices are an especially costly way of transferring benefits from the government to the citizens. In the last several months we have seen the government instead expand social assistance programs targeted strictly to citizens, programs like unemployment compensation and housing subsidies.

The KT article continues:

If the economic viability of a few distribution companies were the only motive, there could have been other options for a petroleum-surplus country like the UAE to spare it's economy of the huge inflationary burden it is facing today. In scenario one, as all the distribution companies in the country are government owned, there could have been a government sponsored consolidation of distribution that could have given the one and only distributor access to country's crude at production cost. In the second — and a more business-like solution – the government had the option of supplying all petroleum companies refined petroleum products at a fixed price allowing a reasonable margin.

As I noted yesterday, while the distribution companies may be government owned, their ownership varies. The national oil company Adnoc is owned by Abu Dhabi, and Adnoc is a vertically integrated company in (profitable) crude oil production and export, refining capacity, and local distribution. The Dubai-owned oil company ENOC is simply a retailer and it buys refined products at world prices. If ENOC were given access to "refined petroleum products at a fixed price allowing a reasonable margin" then Abu Dhabi would be subsidizing Dubai. Thus, I don't see "scenario two" as a politically viable option. The same goes for nationalization of distribution in "scenario one" as that would make the Dubai-based owners of ENOC quite unhappy.

In short, the UAE's greater willingness to increase retail prices for petroleum products is driven by two factors that make the UAE distinct in the region:

• citizens are a small percentage of the population
• federalism and the competing interests of the different emirates

Arabs fear spread of federalism :: Middle East Online

Quoting:

As Kurds and Shiites in Iraq push for a federal constitution, fears are rising in the Arab world that the urge to create separate states could spread in countries with religious and ethnic minorities, analysts said.

When minority groups feel oppressed or deem that their rights are restricted by the centralised states in which they live, they are drawn to notions of autonomy or federalism so that they can better exercise their rights, Arab experts said.

Therefore, the Arab world is keeping a close eye on the outcome of demands for a federalist Iraq as it creates its first constitution since the fall of ex-dictator Saddam Hussein, said Nabil Abdel-Fattah, an analyst from Cairo's Al Ahram Center for Political and Strategic Studies.

"The result of the fight - between Sunnis who are against federalism in Iraq and Kurds who are for it - will have a decisive influence on how other countries' crises play out, from west of Asia to the Middle East and Iran," he said.

"Federalism was not one of the concepts in the Arab political dictionary, until now," he said.

The United Arab Emirates is presently the only federal state in the gulf region.

Some parallels between the sources of success of the federal system in the UAE and the USA can be made. For example,

• The USA was formed by the voluntary association of the 13 colonial states; the UAE was formed by the voluntary association of 7 independent emirates.
• In both countries the individual states/emirates saw there was a political and economic gain to unifying and ceding control to a central government for joint protection from foreign intervention, and to reign in destructive barriers to trade between states/emirates.
• The USA had George Washington; the UAE had Sheik Zayed. Both founding leaders were highly respected by large majorities of their citizens.
• The USA and the UAE both experienced huge immigration -- the difference here being that in the UAE few of these immigrants have gained citizenship.
• In the USA and the UAE the ethnic and sectarian diversity within each state/emirate was not dissimilar to the diversity between the states/emirates.
• In the USA and the UAE states/emirates were delegated considerable discretion to handle local affairs locally.
• The US left some questions of major conflict unresolved. Less than 100 years after its founding, a very bloody civil war was fought over those issues. When that war ended the central government gained considerable power, including a greatly expanded ability to tax -- and thereby redistribute. In the UAE 90% of the oil wealth is in Abu Dhabi and it has been used for the same redistributive purposes as well as a carrot and stick to defuse conflict between emirates.

Is it Tanmia or something else? :: Gulf News

Gulf News editorial:

The minister, Dr Ali Al Ka'abi, believes that it was not fair for jobless UAE nationals to see more than 2.1 million expatriate workers get jobs in the UAE while quite a few of them could not find work.

But it is another arm of The Ministry of Labour that controls work visas. If the objective is to create jobs in the private sector that nationals will accept, then job benefits and working conditions must improve. And these will not improve as long as the benefits and conditions for so many of the jobs in private sector are determined by the job benefits and working conditions of third world countries from which these ex pat workers are attracted.

The responsibility for present conditions does not lie with Tanmia. It is neither fair nor constructive to hold Tanmia responsible for actions of other government agencies that hold the authority over work visas.

UAE poultry cartel in dispute with Dubai cooperative :: Khaleej Times

There is a "uniform price policy" for poultry sold at retail in the UAE. It is not clear who sets this policy or what the consequences are for those who do not conform to the uniform price.

The Emirate Poultry Producers Association is not happy that the Union Cooperative Society in Dubai is selling poultry at prices below the uniform price. Several UAE Ministries have issued directives for the formation of a "permanent committee for the poultry industry." It's immediate purpose is to "study the urgent disputes of poultry producers and distributors." It "will be armed with wide-ranging powers and its decision on any dispute will be binding on all parties."

The so-called "erring" producer, Al Safa of Oman, distributed - the article uses the perjorative "dumped" - its poultry through the Union Cooperative Society.

Now, "the UCS in Dubai is studying proposals to establish its local poultry farm to meet the local market demand. 'The price of the new product will be less than the prevailing market prices by 15 to 20 per cent,' said Mohammed Al Thani, Director-General of UCS in Dubai."

I read his statement to mean the UCS is not planning to conform to the "uniform price policy" and the dispute with the EPPA will continue.

Recently, the UAE has criticized distributors for taking "advantage" of growing demand by increasing prices for food. The UAE is experiencing the same sorts of contradictions in government policy that is common in other countries, including the USA. As in the USA, some government agencies are charged with protecting consumers by fostering competition amongst producers; other agencies are charged with protecting producers - and often it is producers of agricultural products - from competition.

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.

Power blackout in Dubai:: Gulf News

Thursday's power blackout in Dubai affected one million people; power began to be restored after four hours. Service to all customers was restored within eight hours.

Temperatures on the day were 41C (104F).

The equipment failure has been traced to a fault in a transmission substation. To protect a fault in one location from damaging equipment in other parts of an interconnected system, power systems are designed to shutdown surrounding equipment. In some conditions - such as when customer usage at the time is high - this can result in major blackouts. It takes time to bring the system back up, and it is done in stages. Thursday's outage in Dubai followed this classic pattern. Shutdowns are of course preferred to damaged equipment - both result in blackouts and the latter means a longer blackout.

Dubai's power system relies on natural gas turbines for power generation. Gas turbine generators are small in comparison to coal-fired generators or nuclear generators. Also, in comparison to coal or nuclear, they can be turned on and off easily. These are features that happen to simplify the problem of bringing a power system back up following an extensive outage in the system such as occurred in Dubai yesterday.

Power systems are interconnected by a transmission grid. The purpose of interconnection is to lower cost of generation and to enhance reliability. Imagine a system where each neighborhood had its own generator and neighborhoods were not interconnected. First, it would not take advantage of the likely possibility that one larger generator shared by two neighborhoods would have cost advantages. Second, if a generator fails in one neighborhood, your fellow neighborhoods cannot lend a hand by generating more power and transmitting it to you.

Under most conditions, interconnection is your friend. But under some conditions - like those that occurred in Dubai on Thursday - a failure in one part of the system is transmitted to the rest of the system.

When technicians study a major power outage they identify the state of the system at the time of the outage. How heavy was demand? Was it particularly heavy in one area? Were some parts of the system - transmission or generation - offline at the time of the fault? Answers to these questions lead to recommendations for physical changes in the system and for changes in operating procedures.

Sharjah City, which shares a long border with Dubai City, was not affected by the blackout. This suggests that the Sharjah and Dubai systems are not interconnected, or if they are the interconnection is limited. What if they had been interconnected; what would have happened? There are two basic possibilities. One is that the blackout would have spilled over into Sharjah's system. The other is that the Sharjah system could have helped Dubai's system and limited the extent of the blackout. We observed here that Sharjah's system has been operating at or near capacity for several months; under these conditions Sharjah had no power to share and interconnection likely would have led to a wider blackout, not a smaller one.

I suspect there are political reasons why the Sharjah and Dubai systems are isolated from each other.

Unemployment of nationals could exceed 40,000 :: Gulf News

Al Faris said while 11,000 nationals, mostly women, applied to Tanmia to find work last year, according to estimates real unemployment figures hovered aro-und 37,000 to 40,000. He said the guestimate was a result of piece-meal studies done on unemployment in different emirates.

The lower Tanmia figure he said, was because "not all job seekers apply to Tanmia for assistance, and not everybody who applies at Tanmia is unemployed".

Comment: Thus, the upper figure counts some who don't apply to Tanmia but who are seeking work and are unemployed, while the lower figure excludes both these job seekers as well as job seekers who are registered with Tanmia but are not unemployed.

Is education to blame?

Al Faris said the nation's public education system had to shoulder some of the blame. Tanmia statistics showed 44 per cent of job seekers had finished secondary studies, and another 22 per cent had a BA.

Another set of figures showed an exodus into private education. "Fifty-two per cent of students now complete their studies entirely in the private system. Is there a crisis in education? Yes, experts in that field say there is a problem," Al Faris said.

Paraphrasing: The large percentage of nationals in private primary and secondary school is an indication that national parents are taking their children out of government schools because they provide a poor quality of education.

Comment: I'm somewhat incredulous that 52% of nationals are in private schools. There's another number to ask about.

Mismatch between training and available jobs?

Al Faris said UAE nationals were not taking on studies that could lead to more job opportunities. "Most of the higher education [of Tanmia applicants] was in computing and business, which shows these professions don't necessarily guarantee a job anymore."

Female unemployment and social constraints

Social constraints were also stopping more women from entering the labour market, Al Faris said. "We've noticed the further a woman is from a city, the more likely she is to be employed." Still-powerful cultural mores prevented women from moving outside her family home before marriage to find work, he said.

Educational attainment choices as barrier to a good job

Al Faris said the nation's public education system had to shoulder some of the blame. Tanmia statistics showed 44 per cent of job seekers had finished secondary studies, and another 22 per cent had a BA.

Comment: But how much blame should the system shoulder for choices made by students not to complete their secondary studies or not to pursue a college degree? The public education system also has to contend - for instance - with the fact that the police and military will take on male nationals who have not completed high school.

Note, also, that of the students who do complete high school most are women. The same is true of those who earn a college degree. But, as noted, females face social constraints about the kinds of jobs they accept and whether they work at all. Thus, of those most likely to work (males) educational attainment is even lower than the figures cited above.

According to the Tanmia study Employment and Human Resource Report 2004, the number of nationals in their final year of secondary education in 2002 was 14898. Over 58% of those were females. In 2001/2002 there was a total of 7117 national graduates earning a college degree in the UAE. 73% of those were female. (It is true, that males are more likely than females to study abroad - the size of this effect is unknown.)

The magnificent Omanis :: Secret Dubai

Secret Dubai observes that Oman and Bahrain were not named in the same breath as other Gulf countries named in the US State Department annual report on human trafficking. SD writes:

The reason for this is quite simple: in Oman - as in Bahrain - local people are prepared to take jobs at all levels. They drive taxis. They work in restaurants and at hotels. They act as tourguides.

But is the reason some special virtue of the Omanis? No. The difference is that Oman and Bahrain have substantially less oil wealth than these countries. The effect of the welfare state is apparent in the UAE, Qatar and Kuwait - and Saudi Arabia. In addition, for the same fundamental reason (wealth), all these countries have admitted large numbers of guest workers. The wages for working in restaurants and at hotels are set by wages in poor parts of Asia. Oman, by contrast, has placed greater limits on guest workers.

I concur with Secret Dubai that the Omanis and Emiratis are different from each other in ways that can not be reduced to economics. (And they have similarities that distinguish them from other cultural groups.) But we have not seen how Oman would be if it became as wealthy as suddenly as the UAE.

Does the GCC have a manufacturing edge? - Gulf News

I'm scratching my head trying to make sense of the discussion of the UAE textile industry that is in this article. The discussion is confused or confusing.

But this seems flat wrong:

As China does enjoy high levels of competitiveness in the labour-intensive industries, including the readymade garment industry through which it was able to invade world markets, we do have significant advantages in the capital-intensive industries that rely on cheaper energy sources. Such industries can enable us to invade world markets.

It seems that there are some initiatives in some Gulf countries, which initiatives need to be enhanced and developed for keeping abreast of international developments. With such process, significant gains could be achieved to put the GCC states on the world's economic map in the post-oil era.

First, oil is no cheaper here than in the rest of the world. Oh, it may be cheaper to the final user, but the opportunity cost is the same - because oil is mobile around the world. Thus, any advantage is merely due to a subsidy from the publicly-owned oil sector. In other words, the appearance of profitable opportunities in energy-intensive sectors is really a reflection of a transfer of oil profits to prop up manufacturing.

Second, the author contradicts himself by advocating investment in oil-intensive manufacturing in one paragraph and then implying in the next that the post-oil era is approaching. Putting yourself "on the world's economic map" has no economic meaning.

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.

Abuse in the labor market - Khaleej Times

ABU DHABI - The Labour and Social Affairs Ministry has amicably settled the issue pertaining to over 100 employees seeking release from the West Coast Cleaning and Environment Services Estalishment following non-payment of salaries since February, Khaleej Times has learnt.

Notice that the employees are essentially indentured workers who could not leave the firm and seek employment elsewhere. Even when the firm failed to pay them.

As long as the labor law prevents foreign workers from changing jobs there will be cases of firms with nothing left to lose who abuse this feature of the law. And there will be some firms whose business model is in essence to commit fraud against workers. Legitimate businesses will suffer the consequences; as word of these abuses reach workers overseas considering working in the Gulf they will demand a premium to work in the UAE.