Unemployment rates in UAE are safe for now, economists say

Unemployment among UAE nationals has increased, but not alarmingly. Above, foreign workers load boxes at a warehouse in Jebel Ali. [Jumana El-Heloueh/Reuters]

Unemployment among UAE nationals has increased, but not alarmingly. Above, foreign workers load boxes at a warehouse in Jebel Ali. [Jumana El-Heloueh/Reuters]

  • COMMENT

    4

  • Print this article
  • increase decrease

Unemployment levels in the UAE are still at safe levels even though the percentage rate among nationals is high, economists told Al-Shorfa.

A report issued by the UAE's National Bureau of Statistics on June 5th showed that unemployment among nationals reached 20.8% in 2011 and 3.2% among expatriates. The overall unemployment rate in the country, for both nationals and expatriates, was 4.6%.

Economists say a cultural change among nationals could lead to a decline in unemployment since most do not accept low-level jobs.

"The overall unemployment rate in the UAE is still at an economically safe level," said Jamal Zarrouk, a senior economist at the Arab Monetary Fund. "The unemployment rate among nationals is normal since they do not accept all types of employment and focus instead on public sector or administrative jobs."

"About 90% of UAE nationals only want government jobs, which is not a healthy [disposition]," he told Al-Shorfa. "The government's task is not to find jobs [for the unemployed] but rather help the economy create jobs."

Zarrouk underscored the need for a cultural change among nationals because the government cannot employ every national seeking work in its administrative agencies.

The UAE economy is developed and capable of creating jobs, Zarrouk said, especially since the government supports private sector businesses and helps citizens start small and medium enterprises (SMEs). About 94% of companies in the UAE fall under the SME category, he said.

Reducing unemployment through private sector

Abdul Baset al-Janahi, CEO of the Mohammed Bin Rashid Establishment for Young Business Leaders in Dubai, said small businesses play a key role in reducing unemployment but are limited in scope.

"[Small businesses] provide work for the owners only, not the employees," he said.

However, the private sector "plays a key role in tackling unemployment through job creation, and we help SMEs grow to absorb labour", he said.

Economist Najeeb al-Shamsi said there is a need for remedying the unemployment problem as soon as possible.

"The unemployment problem in the UAE is multi-faceted but it needs long-term solutions," he told Al-Shorfa. "International economists are amazed when they learn that unemployment does exist in the Gulf despite its strong economy that is supported by oil revenues."

UAE unemployment data confirms the country is facing a problem that has negative implications for the economy, al-Shamsi said.

"There is masked unemployment in the UAE and remedies need to be implemented before it gets worse," he said.

High unemployment in the Gulf

A recent report published by consulting firm Booz & Company said that during the next decade the Arab world needs to create up to 75 million jobs, a 40% increase over the current level, just to keep pace with the rapid population growth of Arab youth who will be entering the workforce.

"The six Gulf Co-operation Council (GCC) countries have the highest unemployment rates among young people in the world, reaching 40% in some age groups," the report said.

"GCC governments tried to alleviate the unemployment crisis that occurred in recent years by adopting two major initiatives: setting quotas for the hiring of nationals and contributing to the cost of hiring them," Samer Bohsali, a partner with Booz & Company, said in a press statement. "While these policies have achieved some success, they did not meet their desired objectives."

ADD A COMMENT (COMMENT POLICY) * DENOTES REQUIRED FIELD

Test
  • READER COMMENTS

    رائد

    2012-6-26

    Many private sector companies in the State have signed agreements with the universities and scientific and research centers of the State whereby the rehabilitation and training of the locally outstanding students and sending them abroad to study in the best universities in the world is guaranteed and they then return to work with these companies. This is part of enabling the young people to obtain decent job opportunities and to enhance their competitiveness in the labor market that is abundant with experiences and international skills and in accordance with the best international standards, bridging the gap between science and technological applications and the keenness of the business sector on strengthening the partnership with the many governmental initiatives through supporting the launching of personal employment opportunities and supporting the business community in the state with the capacities and promising the young experiences as well as initiatives that include the establishment of a Fund for the development of the projects and supporting the projects whose basic activities help in providing personal job opportunities for the young people of both sexes through the provision of a platform for ideas and financial support to instill the spirit of entrepreneurship and raising their awareness and supporting projects that they manage.

  • محمود هاشم

    2012-6-26

    The young people seeking jobs in the UAE should not deal with the offices of travel which exploit their conditions and need for jobs and sell them visas that are important to them as long term work visas and not limited. This pushes them to violate the law after the expiration of the visa and to face serious problems such as imprisonment, deportation and permanent denial of entry into the UAE. The UAE confirmed the progress at a steady and energetic pace towards founding a new economic model based in its philosophy and vision of the future on enabling the transition from dependence on the economic activity sectors intensive with employment to a new phase based on industries and high-tech and intensive in the share capital and dependent on knowledge, advanced technology and environmental awareness to preserve the home and for the protection of the national identity and increasing the employment opportunities for the nationals of the State in particular among the young people of both sexes and enabling them to join in the productive participation in the labor market. The transition to a new phase would also provide stability with contracting temporary foreign labor to form these successes combined to maintain the structure of the economy and the investment frameworks in the post global financial crisis phase and the accompanied repercussions. The UAE economy absorbed many initiatives to mobilize the national young energies, improve their capabilities, invigorate labor values in them, and placing the young people at the heart of the development process and enabling the women to benefit from their potential as a genuine partner in all the areas of work and giving, in addition to the integration of the people with special-needs and enabling their role in the development of society.

  • سالم خالد

    2012-6-26

    The UAE authorities decided to introduce a new recruitment system that would begin working soon, specialized for the job-hunters in the United Arab Emirates. The new system is based on periodically renewing temporary work permits. The new system depends on the issuance of work permits for three months, which can be renewed for another three months, and the UAE Labor Ministry will get a bank guarantee from companies or corporations that wish to introduce employment permits of the mission to ensure the commitment of these companies to send the workers back to their countries after the mission that they came for and after the expiration of the permit to avoid exposure to a fine.

  • كمال احمد

    2012-6-26

    Under the successive developments and changes in the economic sectors and the size of the expatriate workforce, the government works continuously to modernize and repair the existing laws, add new regulations and calends to keep pace with the developments and changes in the labor market, the expatriate workforce's size and its diversity among the foreign workers. These laws aim to define the rights and duties of the staff members, in line with the general economic and social objectives, taking into account the national and international obligations. They also aim to provide a stable political environment that allows the achievement of economic transformations that benefit all the stakeholders like the other Gulf States, to balance the high proportion of expats in the U.A.E., between the incoming workers and the citizens. According to a study conducted by the development and recruitment authority of the national human resources shows that the main cause of unemployment in the GCC is the segmentation of the labor market, where the study showed that most citizens are in governmental posts while large numbers of foreign workers are in low-wage jobs in the private sector. According to the statistics of the Ministry of Economy, the number of staff among the citizens of the State was less than 9% of the total workforce in 2003. In an attempt to overcome this structural problem in the labor market, the government launched the resettlement campaign, which includes educational initiatives and academic programs for the rehabilitation of the citizens to get better job opportunities.