UAE rulers tuned in; increase handouts

From UAE official new agency (WAM):

President His Highness Sheikh Khalifa bin Zayed Al Nahyan has instructed the establishment of the Khalifa Fund for Enabling Emiratisation in support of the empowerment policy he has launched and in completion of the President's initiatives seeking to advance socio-economic development plans, provision of decent living means and stability to UAE citizens.

The new institution aims to provide financial resources necessary to support programmes and policies for encouraging UAE citizens to enter the private sector labour market, help them to seize job opportunities the private sector offers, and secure required funds for delivering a package of rewards towards achieving that end.

In its meeting today under the chairmanship of Vice President and Prime Minister of the UAE and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, the federal cabinet reviewed the work mechanisms of the new entity, scope of its mandate and executive measures needed to start its operation as soon as possible under the supervision of the National Human Resources Development and Employment Authority (Tanmia).

The package of incentives the Fund will offer includes payment of financial privileges when a UAE citizen joins work at the private sector so as to reduce the pay gap between the public and private sectors, allocation of funds to employers to help them cover a certain percentage of the pay the national private sector employees will draw in the first year, funding part of training and rehabilitation costs of the new national employee when he joins the private sector for the first year and contribution to long and short term training programmes for national job seekers.

The Fund will also use its financial resources to advance policies and programmes aimed at creating new job offers at the local and federal levels, supporting and financing small and medium scale enterprises, and financing university specialisations that cater for requirements of the local labour market.

The Fund will act as a key contributing mechanism to leverage participation of citizens and develop the social welfare concept into a new one that enables able social assistance recipients to become a productive force contributing to the growth of the national economy. It will also serve as a mechanism for facilitating success of Emiratisation policy and programmes and increasing the share of small size businesses owned by UAE citizens in a way that generates more job opportunities.

WAM/TF

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).