UAE puts ceiling on unskilled expats

The Federal Cabinet has placed restrictions on the importation of unskilled labor.

Arabian Business:

The UAE government is to implement new limits on the importation of unskilled workers as part of a policy to balance the country's demographic structure.

The Federal Cabinet on Sunday said the "uncontrolled import of unskilled labourers should be limited and replaced by recruitment from within the UAE".

There are two imbalances. One is that only one fifth of the population are Emirati nationals. The other is that the bulk of the short term migrants are unskilled men.

When a similar reform was announced in Bahrain a few years ago there was a howl of protest from households. Not surprisingly, there is a exception:

However, the cabinet's resolution said the chairman of the Federal Demographic Structure Council "may exempt from this resolution domestic helpers or any other categories he specifies".

Here's the Khaleej Times report on the package of resolutions coming under the Federal Demographic Structure Council.

I didn't see mention of my recommendation: to equalize the labor rights of Emirati and foreign workers. Until that happens, employers won't see the point of paying Emiratis as much a foreigners. The disadvantage of Emiratis is that they have too many rights (or foreigners too few).

Emiratis are 11.5% of population

From 2006 to 2010 the population of the UAE population grew 65 percent according to official statistics. Unsurprisingly, the proportion of the population who are Emirati citizens fell. A lot. Immigrants Migrants cannot gain citizenship. [Strikeout courtesy of commenter below who is correct that the UAE aims to have no immigrants, only transients.]

Bloomberg:

The population of the United Arab Emirates grew 65 percent to 8.26 million people in the first half of 2010 compared with the same period in 2006, the U.A.E. Statistics Bureau said on its website today.

Emirati nationals accounted for 11.5 percent of the population at the end of June, or about 948,000 people, the data showed. The country’s expatriate population rose 75 percent from 2006 to the end of June, to 7.3 million people.

In 2010 there were 5.8 million non-national males and 1.6 million non-national females.

Follow the label "demographic imbalance" for previous posts on the UAE population.

National identity crisis: Dude, where's my culture?

The global financial crisis is seen as having benefit for Emirati culture. Seems like a stretch to me.

IHT:

Emiratis have fretted for years over the loss of their culture, as social norms became more a product of the newcomers than of the nationals. Now, some are pinning their desires for a cultural salvation on the global economic downturn, which they hope will reduce the numbers of foreigners pouring into their country and give them a chance to reassert their customs and way of life.

"This is a blessing; we needed it," Abdul Khaleq Abdullah, a political science professor at United Arab Emirates University, said of the fiscal crisis. "The city needs to slow down and relax. It's good for the identity of our country.

"The city reached the summit, but we knew every time we got closer to the top, we got closer to the edge too," he added. "That's the feeling inside each Emirati. When we felt like we had it all, we also felt like we will lose it all."
...
In an odd case of role reversal, the minority of nationals fear they are becoming like colonial lords in their own country.

"I'm not just concerned about my future, I'm concerned about the future of my country," said Rashid Ali, 24. He and his friend Fahd Muhammad, 25, were the only two Emiratis seated in a crowded city mall last week. "I'm concerned about our national identity," Ali said.
...
The local population has largely been pacified by the largess of a gilded welfare state. For Ali and Muhammad, that meant free tuition and expenses for their university studies in Britain, including a monthly stipend of $1,258 while abroad.

Returning from school this year, they were given government jobs that pay $3,600 a month, which like all income here is tax free. When they plan to marry, they said, the government will give them each a free piece of land and about $200,000 to build a house, plus access to a 10- or 20-year interest-free loan.

That generosity is a problem now, as the government faces the prospect of having to control spending, raise revenue and encourage its own citizens to move into industries like finance and banking, which are now controlled by foreigners. Locals make up only 3 percent of the private work force, experts here said, with Emiratis opting for the shorter workday and higher pay of guaranteed government jobs.

The problem is that many like Ali and Muhammad say they enjoy what they get from the growth — the luxury villas and fancy cars — but not the costs in terms of social change. If the economy slows too much, however, the fear is that the costs may ultimately outweigh the benefits.

"Most people worry now, where is the welfare government?" said Salah Al Halyan, a financial consultant in Dubai, who explained the concerns of Emiratis. "Where is all the comfort? Where is my country? Who are all these people coming? The problem is the attitude of the nationals. They want to live on food stamps."

As the two men walked amid a sea of foreigners in the mall, they alternated between pride in the development and anger about what they called a loss of control of their national identity.

"We are Bedouins, developed Bedouins, but we still have our traditions," Ali said. "It's all changing and disappearing."

And then with deep sarcasm, he said, "What's up dude?" a phrase as alien to his culture as blue jeans and, now, as common in his city as blue jeans.

There's more.

Click on the "demographic imbalance" label at the end of this post for past coverage in The Emirates Economist.

The pitfalls of ethnic selection

The UAE has a long way to go correct its "demographic imbalance" -- 50 percent of those living in the country are from India and Pakistan, more than 90 percent of the private sector workforce is foreign, more than 80 percent of the population is foreign, there is about one foreign household servant for every local living in the country, a disproportionate percentage of the foreign workforce is male. The demographic imbalance has bemoaned by locals, but most also are conscious that (1) the oil-fueled building boom in country would not be possible without the foreign workers, (2) few locals are willing to work menial jobs that predominate in the economy nor prepared for many of the few positions requiring specialized skills.

Gulf News today:

Advanced construction techniques that will call for a significantly fewer number of labourers and a scheme under which expatriate students are allowed to take up part-time jobs are among initiatives expected to better shape the demographic structure of the country, a top official said on Monday.

“His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, approved a number of policies submitted by the National Authority for Demographic Structure,” said Lieutenant General Shaikh Saif Bin Zayed Al Nahyan, Minister of Interior.

Under the new policies, expatriate students will be allowed to take up part-time jobs and a committee will be formed to moot new construction techniques to replace traditional, labour-intensive systems, Shaikh Saif said in a statement issued yesterday.

Shaikh Saif said the government is making serious efforts to address demographic issues and to strike a balance between requirements of development and the national interest and "our right to a safe and promising future which embodies the vision of our leadership and ambitions of the Cabinet."

The Economist is on target in its analysis:

Governments in the booming Gulf Arab states are becoming increasingly anxious at the erosion of their national cultures, as their growing economies suck in ever-larger numbers of expatriate workers. They are now devising a range of measures to limit the growth of segments of the expatriate population—in particular those at the less skilled end of the spectrum—while not impinging on the continued expansion of their economies. The concerns call into question the entire basis of the Gulf development model, entailing ambitious targets for economic growth and diversification, which cannot feasibly be achieved without a substantial increase in the expatriate population.

The problem is most clearly evident in the United Arab Emirates, where expatriates account for more than 90% of the private-sector labour force, and where the population is thought to have grown by almost one-third over the past three-four years. According to the most recent census, whose results were published in 2005, the UAE's population was 4.3m; it is now generally estimated to be about 6m. The UAE government announced in early September that it is setting up a national demographic agency that will be tasked with finding ways to slow down the growth of expatriate labour imports. Among the initial measures that have been proposed is a scheme to allow students who are enrolled in UAE universities and who are the children of foreign residents to take up part-time jobs. This measure appears to be targeted at children of long-term residents from other Arab countries, who have more cultural affinities with Emiratis than do Asian and European residents, who predominate in the expatriate community. The students would be expected to gravitate towards semi-skilled jobs in the services sector that tend to be performed by Asians.

The government is also considering the establishment of ethnic and cultural diversity quotas within companies, so as to prevent certain national groups predominating. Other ideas include changing building codes so as to reduce reliance on foreign construction workers and introducing much more automation into the services sector, for example at petrol filling stations.

However, these measures will have only a marginal impact on the overall size and make-up of the expatriate population. There is no sign of any let-up in the construction activity associated with investment in infrastructure, real estate, tourism, financial services and industry, which suggests that the current total of some 1.5m expatriate building workers is only likely to increase. Once this wave of construction is completed, there will be growing demand for imported services and factory workers to operate and maintain the new hotels, offices, apartment buildings, leisure and cultural centres, transport facilities and industrial plants. The businesses importing the labour are likely to continue to insist on their freedom to recruit from whatever market suits their needs best.

Elsewhere in the Gulf, Bahrain and Kuwait provide examples of the pitfalls of trying to impose ethnic selection in structuring the labour force.

Thanks to The EclectEcon for the pointer to The Economist.

2008 is UAE National Identity Year

Gulf News:

The conference is being hosted by the Ministry of Culture, Youth and Community Development and it comes in line with President His Highness Shaikh Khalifa Bin Zayed Al Nahyan's announcement to mark 2008 as National Identity Year, and in support of the federal strategy that aims to reinforce national efforts to protect and promote national identity," Afra Al Saberi, General Coordinator of the conference told a press conference yesterday.

Proud Emirati makes a good observation. There is a basic inconsistency between lipservice given to concerns over demographic imbalance (UAE natives comprise 20% of the population), and the construction projects announced:

The real question is: do our decision makers really believe in what they say? Last time I checked there were dozens of projects lunched that would attract millions of laborer to the market. So I don't know whether they really mean what they say.
...

"Our future and national identity are strongly connected to the demographic structure issue, which requires collaborative efforts and teamwork," Shaikh Mohammad said.

...
I don't know exactly what they have in their mind but what every Emirati would expect is an authority that would put regulations to increase the number of Emiratis, either by encouraging marriage and having children or by naturalizing limited selected number of people. Their objective should be to increase the number of Arab speakers by importing Arab laborers, restricting the number of other nationalities and forcing the Arabic language.

I note that while lipservice (no pun intended) is given to Arabic, the UAE shifted from use of Arab to Asian imported labor after Saddam's invasion of Kuwait. The reason is the imported labor in Kuwait demonstrated an allegiance to Saddam. Asians are more compliant and cannot claim a common Arab heritage as a basis for a political hearing in the court of public opinion.

The inaugural issue of The National has an op-ed on the question of national identity which bypasses the demographic imbalance issue altogether.

At ArabianBusiness.com the spot poll of the day is "Do you agree that foreign workers pose a threat to the security of GCC countries?" These sorts of voluntary (i.e. unscientific) polls annoy me, but at least the question is being put out there. Currently 63% of respondents answer "No, foreign workers are important for the future of the GCC countries." If you don't like that, you might want to rush over and bias the result in some other direction.

See also this at Middle East Online:

The growing concern of Emiratis about being a minority in their own country surfaced again last week, with a senior official warning that it could lead to the collapse of the regime.


"I'm afraid we are building towers but losing the Emirates," outspoken police chief General Dhahi Khalfan Tamim said on Tuesday, referring to a construction boom in the emirate, fueled by foreigners buying property there.

The article has generated over 80 comments at UAE community blog.

When can welfare benefits and immigration be separated?

Demographic imbalance continues to be a sensitive issue in the GCC:

"This region will not remain Arab-Islamic in the presence of millions of Asians here. I do not exaggerate when I say that we will soon see a Gulf minister or Member of Parliament from the Indian subcontinent," [Bahrain's Labour minister Majeed Al Alawi] said in an interview published on Sunday in Asharq Al Aswat newspaper.

Al Alawi lashed out at the lazy character of Gulf nationals that has made them almost fully dependent on imported labour even for the simplest tasks and blasted the Gulf business community for their uncontrollable greed, claiming that they were driven "only by financial interests and without any regard for the formidable damage caused by foreign workers."

The minister, a leading opposition figure who was given the labour portfolio in 2002, has now failed twice to have the GCC leaders endorse a proposal for a residency cap to limit the growing influence of the expatriate communities.

I would not describe Gulf nationals as having a "lazy character." I would say that they respond to incentives, and that in many countries in the Gulf nationals benefit from the welfare state that the oil revenues of those countries can support.

By contrast, the ex pats in the GCC have a reputation for working hard. But that is because their income is tied to their productivity; they do not receive the benefits of the welfare state. Arguably - because the GCC is so dependent on foreign labor - it has the most open immigration policy in the world. The economist Milton Friedman argued that open immigration was incompatible with a welfare state. Here's what Lant Pritchett had to say about that in an interview with Reason:

Reason: Milton Friedman has pointed out that open borders are incompatible with the welfare state.

Pritchett: I would have thought Milton Friedman would have taken that as an argument for open borders.

The free mobility of labor is incompatible with the welfare state if every person who is physically present in a location to perform an economic service automatically comes into the same set of welfare benefits as a local. That needn’t be the case.

This is what liberal democracies find hard. But it’s not impossible. You have to confront the injustice of the world and say this person is better off even without the welfare benefits, and this process is good for the world.

Reason: You then create a division between first- and second-class citizens. Isn’t that worrisome?

Pritchett: The world now is divided into first-class citizens of the world and fifth-class citizens of the world. The idea that we wouldn’t help a peasant trying to eke out a living on a side of a mountain in Nepal by letting him work in the United States, just because we have to, if he comes to the United States, endow him with all the rights of U.S. citizens—I think that moral calculus is backward.

So the first answer is: Milton Friedman is wrong. It’s not incompatible with a welfare state; it’s incompatible with a welfare state that doesn’t differentiate between people within its territory. Singapore manages to maintain an enormously high level of benefits for its citizens with massive mobility. Kuwait has one of the highest immigrant populations in the world, and you can’t ask for a more cradle-to-grave welfare state than what Kuwait gives its citizens. So it’s obviously possible to maintain whatever level of welfare state you want and have whatever level of labor mobility you want, as long as you’re willing to separate the issues.

In the GCC it has been politically feasible to admit immigrants and deny them welfare benefits. Would it be politically feasible in the U.S. to separate immigration from access to welfare benefits? Not all Americans would agree, but I suspect the majority believe that if someone is admitted to the country then they should have access to most if not all of the public benefits that citizens enjoy. At the same time Americans do not support open immigration. Thus, most Americans - although they may not recognize it - leave most would-be immigrants worse off than if they could accept second-class residency.

Thanks to freeexchange for the link.

Update - Arabian Business: "Al Aswat warned that the presence of foreign workers in the Gulf was a greater threat to the region than the fallout of a nuclear bomb or an Israeli attack."

Christians are coming back to Arabia

So says Chisea, a website providing "news, analysis, and documents on the Catholic Church." According to Chisea,

On May 31, the Holy See established diplomatic relations and exchanged ambassadors with the United Arab Emirates. Few noted the fact that the United Arab Emirates has the greatest Christian presence of any Islamic country.

And it is a new and growing presence. Exactly the opposite of what is happening in other regions in the Middle East like Iraq, Lebanon, the Holy Land, where Christian communities of very ancient origin actually face extinction.

The United Arab Emirates is a federation of seven emirates ... . Almost all of the citizens belong to the official religion, Islam.

But there are many more immigrants than citizens. Foreigners now make up more than 70 percent of the more than 4 million inhabitants, coming from other Arab countries, Pakistan, India, Bangladesh, the Philippines.

More than half of these foreign workers are Christians. Adding up the figures, Christians account for more than 35 percent of the population of the United Arab Emirates. Around a million of them are Catholic. And it's not only in the UAE – in Saudi Arabia, too, it is estimated that there are already about a million Catholics from the Philippines.

The article goes on to describe the worship especially amongst Filipino maids. One example is those who have fled their employers and are sheltered by the Filipino embassy. Another example is of maids who arrange their own services together because their jobs do not allow them to get a church.

Unlike Saudi Arabia, the UAE is good in giving freedom to foreigners to celebrate their religion. But Chisea points to issues that should be addressed. The first is that maids working for families have very little free time, and little freedom of movement both of which limit their freedom of worship - in particular, preventing them from obtaining the sacrament of communion.

The second is that workers in low-wage jobs are virtually indentured servants. This leaves them vulnerable to the capriciousness of their employer. As I have argued before, there would be far fewer stories of employer abuse in the UAE if workers had the freedom to change jobs. As it is, the bad behavior of a few spoils the reputation of the country and makes it more expensive for all employers to hire workers from abroad.

Insight from Buj

Over at UAE community blog, Buj has some very insightful comments on the churning of the UAE immigrant population:

Imagine having 50% of the country's population replaced every 6 yrs? That's madness. You bring in new diseases, you bring in totally new people with possibly worse driving etiquette than the status quo, you erode the already eroding Arabic language, etc, etc.

Why not work on who we have and try to KEEP them here. I want to keep every steel-fixer, hod-carrier, plumber, taxi driver, company director, etc.

Let's educate them. Let's teach the principle of lane discipline. Let's teach the principle that bad driving can be lethal. Let's teach them to live with each other rather than in parallel but separate worlds. The list goes on.

To conclude I think our problems in the UAE are because of the volatile situation of people migration. If we cool it down and encourage the right people to stay (rather than the wrong people to leave) then we'd be going forward :)

An anonymous commenter gives the opposing point of view:

Here is the problem, the more u stay for a long time here and then u demand more rights.

Residency cap?

Gulf News:

The GCC labour ministers' council will also explore the possibility of enacting a law for domestic helpers and creating a model system for local market data base, according to official news agency WAM.

UAE Minister of Labour Dr Ali Bin Abdullah Al Ka'abi said the meeting will discuss what is called (3+3 law) which allows unskilled workforce to stay in the country for three years which can be renewed for another three years.
...
"To enforce a residency cap on unskilled workers of a maximum of six years will contribute to solving the problems associated with the influx of foreign workers and protect our identity," said Al Ka'abi, adding that he is hopeful that the proposal will be approved at the meeting.

The number of foreign workers can be controlled by limiting the number of worker visas. It's not clear why we would want to churn workers. Firms, I would think, would like to get something out of the investment they've made in familiarizing the workers with the job. And if some of the workers are drivers - say of company trucks or heavy equipment - isn't it to our benefit to keep the ones who have become familiar with driving here?

Four boys for every girl

It's rainin' men

The single best measure for locating frontiers is the sex ratio. The greater the imbalance of males to females the more frontierlike the place. In his monumental study of people leaving for America from England and Scotland between December 1773 and spring 1776, Bernard Bailyn has found that four out of five were males; and they were mostly younger males. At a time when only 18 percent of the English and Scottish populations were in the 15-24 age group, half of those leaving for America were in this category.

-Finke and Stark

And we're goin' to Bachelor City, 'cause it's four to one
You know we're goin' to Bachelor Camp City, gonna have some fun
Ya, we're goin' to Bachelor City, 'cause it's four to one
You know we're goin' to Bachelor Camp City, gonna have some fun, now
Four guys for every girl

It's Raining Men! Hallelujah! - It's Raining Men! Amen!
I'm gonna go out to run and let myself get
Absolutely soaking wet!
It's Raining Men! Hallelujah!
It's Raining Men! Every Specimen!
Tall, blonde, dark and lean
Rough and tough and strong and mean

Housing and the bachelor imbalance

Gulf News helpfully has provided an article this morning to complement my previous post about innovative housing solutions. It covers the restrictions that governments in Abu Dhabi, Dubai, and Sharjah place on bachelors living in residential areas. Families about the character of neighborhoods changing when villas originally intended for families are rented by groups of bachelors.

A few quotes:

Amer Abdul Jalil Al Fahim, chairman of Al Qudra Real Estate, estimated that singles account for 50 per cent of residents in the emirate. "They are in dire need for houses that meet their needs. They must be integrated in the social fabric of the city, as they are important in managing businesses."

Al Fahim said that singles should not be segregated along social or professional lines. "Their houses must be near their places of work," he said, adding that labour cities may accommodate workers of construction companies but may not be suitable for other employees who run most of the businesses inside the city.
...
Bachelors are facing similar housing problems in Sharjah and Dubai as they have been asked to stay away from residential areas. In Dubai, the Dubai Municipality had made it clear that bachelors can reside in flats but not in villas while in Sharjah they are allowed in designated areas like the Sharjah Industrial Area and Al Saja'a.

One of the main reasons for the municipalities to undertake the campaign is to provide a safe and secure environment for families. "It does not matter what the profession is, but bachelors are not allowed to live in residential areas in Sharjah," said a Sharjah municipality spokesperson.

As the article points out, most 'bachelors' have families leaving apart from them in their home countries. They have a name: Sort of Bachelors. The Times refers to these sorts as LATtes (living apart together).