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UAE – Emiritisation quotas are ineffective

13 November 2013

The UAE government's ‘Emiritisation’ policy is simply cosmetic and is failing to reduce the “shocking” unemployment rate among nationals, UAE lawyer Habib Al Mulla said in a speech at the Arabian Business Forum, reports the Arabian Business.

Private sector employers are manipulating government quotas that encourage the employment of nationals, while the real issue of properly educating Emiratis is being ignored, the chairman and co-managing partner of Baker and McKenzie Habib Al Mulla law firm said.

Al Mulla, who has been involved in drafting many UAE and Emirate level laws and created the country's financial free zones, said Emiritisation policies were clearly not working, with 28% of the one million UAE nationals still without jobs.

He commented: “That's shocking, particularly in a country that provides over 5 million jobs. To put this in a comparative context, the Eurozone unemployment rate rose in 2012 to 11.8% and that was considered the highest rate on record at the time.”

The UAE government created its Emiritisation policy to help take the burden of employment off the public sector, but according to Al Mulla setting quotas was the wrong method.

“Imposing quotas is an easy solution to the problem of unemployment. However, it's temporary, impractical, and a deceiving solution. It does not deal with the roots of the problem. Rather it provides for a cosmetic touch. In my view, the worst result of imposing quotas is that it leads to disguised employment. The government is trying to impose something the private sector is resisting; the natural result is that the private sector will try to circumvent that,” he added.

Providing an example, he said that some companies employed UAE university students under the guise of a scholarship but did not require them to work during the scholarship period. They also then discouraged from joining the company at the end of their studies (did not employ them?), to enable the company to repeat the process with another student.

“The net result is that it increases the national employment figures. The actual figure would be only 10% … had these students been employed regularly and properly; but they're not the figures that meet the quotas,” Al Mulla said.

Large companies also were circumventing the quotas by dividing into numerous entities and outsourcing to each other, meaning the original 5% of nationals employed suddenly rose without any new employees. Even under the quota system, only 8% of private sector employees are Emirati.

Al Mulla said a survey of Emirati workers found 58% believed the private sector provided low salaries, 53% said it expected long working hours, while 13% were concerned about attracting a bad reputation for working in the private sector.

He added that the main determining issue was the lack of adequate skills and proper education among nationals. “The main issue with the quota system is it fails to provide the younger generation with proper, professional or vocational training and proper skills. There's a lot of skills mismatch going on and younger people who have these high expectations are waiting and hoping they'll get better jobs.”

“What we have right now is inadequate education that does not stress technical or vocational skills. It's essential for nationals, whether in the UAE or in other GCC countries or the wider Arab region, to be equipped with the right skills and vocations to be competitive in the private sector.”

However, he said the private sector also deliberately discouraged nationals from applying for jobs. Salary packages, for example, were usually targeted at expatriates, with inclusions such as a housing allowance and annual flight home.

“This is not to say that the private sector, which is mainly dominated by the expatriate community, does not discourage against UAE nationals. That is a fact that has to be said. However, the key solution to this is not by imposing quotas. The key to employment is education that really the market needs and that's the way to have a successful Emiritisation,” he concluded. 

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