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Emiratization in the UAE

Category: Analysis 7th August 2019

Free essay
The UAE population is on the rise now which means that the number of young job seekers has also increased. The private sector in the past had a very high percentage of foreign workers and the consideration of hiring of locals was not amongst one of its priorities. Therefore, the government had to intervene. It introduced the Emiratization plan which forced the private sector in the UAE to have a percentage of locals working in their companies or businesses. The UAE citizens find this plan very helpful. It is now possible to find jobs more readily rather than waiting for a long time for appropriate jobs after graduation. Most of the private sector organizations and banks prefer to employ foreign workers because they do not have to pay them as much as they have to pay locals.

Emiratization is a philosophy, a policy, a strategy and an action plan all rolled into one. It is a human resource management initiative taken by the UAE government to balance the job market in favor of the UAE citizens. Emiratization was first introduced in 2005 by the government.

The UAE comprises of seven smaller states, namely Abu Dhabi, Dubai, Ajman, Sharjah, Fujairah, Umm al-Quwain, and Ras al-Khaima. After it became free from British control in 1971, the country has shown tremendous economic progress. Its geographical location made it a viable transit point for international trade. The efforts at modernization and huge development projects turned the UAE into a booming economy, attracting manpower from all over the world. Workers from South Asia particularly swarmed the country and were readily absorbed as the huge development projects required a lot of manpower. This booming economy also attracted a lot of foreign investments.

Khondker (2008) analyzed the historical perspective and explained the reasons for the unusually large proportion of foreign workers in the UAE in a lecture delivered at the Middle East Institute in Singapore. According to Khondker (2008), the fast pace of modernization generated an unusual requirement for foreign labor and resulted in a unique composition of the job market, consisting of eighty percent foreigners. The percentage of the foreign workforce was even greater in the labor sector. This statistics clearly depicts that the UAE is largely dependent on foreign workers to run even its important sectors like education and economy. The presence of foreigners in such great numbers even poses the threat that local culture can disappear with the passage of time and the UAE will become a multicultural country losing its own ethnic identity. The government and other opinion makers were alarmed at this state of affairs and introduced the policy of “Emiratization” in 2005.

The essence of Emiratization is that empowerment of the local population is possible only by empowering the Emirati youth and transferring the skills and knowledge from expatriates to locals. The government decided to increase the number of nationals in the workforce, particularly in the private sector, as the key government positions were already held by the nationals.

To accelerate the process, 2013 has officially been declared as the year of Emiratization and make Emiratization the top priority for this year. The government has also introduced the Absher Initiative which is directly supervised by the Ministry of Presidential Affairs.

Arguments for and against Emiratization

There are many strong arguments in favor of Emiratization and multiple reasons exist why this policy must be closely monitored and pursued on.

Employment is the basic constitutional right of every citizen in a country. The young skilled and educated Emirati generation seeking for meaningful employment looks towards the state to protect this right for them. Higher rates of unemployment are undesirable in any country; they reflect negatively on its government’s performance and cause social unrest.

Emiratization will indirectly develop the human resources of the country. More and more locals will try to gain better education in order to compete for the lucrative jobs in the private sector.

There is a financial aspect attached to the success of Emiritaztion. The expatriate workforce earns money in the UAE, but a huge part of it is sent back to their families in countries like India, Bangladesh, Pakistan, etc. The money earned is thus spent to support their families in their homelands or invested to be used when they eventually return some day. On the other hand, workforce comprising mostly of nationals is likely to spend and re-invest within the UAE, contributing to the country’s further development and giving it an economic boost.

Emiratization means self-sufficiency and less reliance on the foreign workforce. With changing global perspective, the country needs to be self-reliant on its own manpower and resources. The risk that foreign workers will tend to flee to their safe havens in their own countries in case of international crisis should not be ignored. The Gulf War in 1991 manifested this tendency and caused a lot of panic in the expatriate community. A sudden flight of manpower may leave a vacuum which will cripple the country’s smooth functioning. Emiratization is a step to counter this threat before it becomes real.

The local citizens are bound to be more committed and loyal to their own country. They value their traditions and culture and want to preserve them. With such high percentages of foreign population, the locals may become foreigners in their own country and their unique culture may be overpowered and eventually replaced.

There are a few negative aspects of Emiratization.

The policy of Emiratization is beneficial for the UAE citizens who are looking for employment. However, the private businesses operating within the UAE have the option of hiring foreign labor at much lower rates. The increased expenses due to the increased salaries will negatively affect a company’s profitability.

The UAE attracted a lot of foreign investments in the past that have greatly contributed to its economic growth. Emiratizaton may adversely affect foreign investment. Foreign investors prefer lesser restrictions. Thus, the Emiritaization policy may affect the decision on new investment inflow (Perrin, 2013).

The UAE is becoming a popular tourist destination, owing a lot to its rich multi-cultural environment. A social change may make it lose its charm as a multi-cultural tourist destination.

Currently, the local human resources may not be sufficient to meet the demand for skilled workers and professionals in the private sector. Moreover, there is a salary gap between the government and the private sector. The government offers better salaries and privileges in comparison with the private sector.

Achieving a hundred percent Emiratization may not please some nationals. At times, they consider certain jobs as less prestigious and are not interested in taking them up (AlMansoori, 2011). The foreign workforce is willing to perform the same jobs for lesser money. Therefore, Emiratization will put an end to the exploitation of foreign manpower being paid lower wages.

The UAE Community Attitude

The major stakeholders in the UAE being affected by Emiratization are the government, the UAE citizens, foreign workforce, and foreign investors.

The success of Emiratization reflects directly on the government’s performance. Hence, the government is making sincere efforts to make this program successful. Instead of imposing strict regulations, it is taking soft measures like announcing the Absher Initiative which aims at creating jobs and providing on-the-job trainings to the young Emiratis through internship programs in the private sector. The government ministries have designated special task forces on Emiratization. The government is also taking steps to educate, train, and develop its youth so that they will be able to replace foreign workers. Reynolds (2010) lauded the commitment in the education sector and admired the process of national development through educational Emiratization.

In general, the UAE nationals welcome this program. According to the recent poll conducted by the Emirates Centre for Strategic Studies and Research (ECSSR), more than seventy five percent of Emiratis expressed satisfaction with the Emiratization policy followed by the government (“Over 75 Per Cent of Job-seekers Satisfied with Government Emiratization Policies: ESSCR Poll”, 2013). The poll results indicated that out of a sample of thousand job seekers, only around twenty three per cent of the respondents were willing to take up jobs in the private sector and majority preferred government jobs. The survey also indicated that approximately thirty nine percent of the sample had received job offers, which they turned down due to low salaries and insufficient privileges.

The expatriate community seems to be threatened, offering unspoken resistance to the Emiratization Program. The renowned expert on emerging markets leadership Weir (2012) believed that the resistance to hire locals in the private sector, mostly being controlled by expatriates, results from certain myths. Expatriates have the insecurity that locals will take over their jobs, although this has never happened. They also have biased notions that the locals will not work hard or come to the office on time. Such prejudices result in managers not assigning challenging tasks to their local subordinates who then get bored and become unable to make the best use of their capabilities.

The foreign investment continues to pour into the UAE. Thus, it is safe to assume that foreign investors have not been discouraged by Emiratization, and the country continues to be a lucrative investment option for them.

Findings

Presently, 13000 newly graduated Emiratis join the job market every year according to a newspaper report in The Gulf Today (Mojib, 2013). The government sector is unable to absorb them all. The locals need more jobs in the private sector; otherwise, unemployment will rise.

The ESSCR poll indicates that the resistance to hire nationals does not exist only in the private sector. Young Emiratis are also not too keen on joining private jobs. They are more interested in government jobs because of better pay packages, relaxed work environment, job security, and lesser work hours.

The process of absorption of nationals in private organizations is slow because the government does not exercise a direct control here. Expatriates also resist hiring locals because they will have to pay them at a higher rate. The culture of nepotism is also very rampant in these organizations, making it difficult for locals to get a job in an organization where other nationalities are predominant.

The Absher Initiative intends to create twenty thousand jobs in the private sector within the next five years. Under this initiative, besides new job opportunities, young Emiratis will also be trained through internship programs. This program also gives incentives to the Emiratis working in the private sector.

Conclusion

Human resource is the most important asset for any country. Successful implementation of this policy will make the nation self-sufficient, stronger, and integrated. Besides ensuring employment for the country’s youth, this program will also make them conscious of their national duty.

Emiratization is slow in the private sector because of nepotism, discrimination against locals, and job insecurity amongst expatriates. An amicable way forward is to create more job opportunities for the locals. The Emiratization policy should continuously adjust and evolve to respond to the job market requirements and provide trained professionals in accordance with the demands. The government should constantly introduce new laws that will make Emiratization possible. Policy of Emiratization has been presented with the nationalistic objective of turning the UAE into a knowledge-based economy and protecting its citizens in the job market. It is the constitutional right of citizens to be given priority in their own country over foreigners. The UAE is certainly geared in the right direction through its policy of Emiratization. This policy should continue so that young Emiratis would be able to find the appropriate jobs once they finish their education.

The nationals should also share the responsibility to make Emiratization successful. They have to identify areas requiring specialized skills and then educate themselves in accordance with them. They should not focus only on prestigious professions. They should remember that they have to compete with the foreign workforce in every area and prove their merit. They have to be willing to work hard in order to take control of the country in their own hands.

Emiratization is the right way forward to make the UAE a modern, developed, and prosperous country through the empowerment of its youth.