Laboring under labor issues
The UAE Labor Minister has said that while the country has already taken measures to stabilize the labor market, more needs to be done.
April 7, 2009 1:11 by Aarti Nagraj
The UAE Labor Minister Saqr Ghobash has said that urgent measures have to be taken to protect jobs in the private sector and cut job losses amid the current economic situation, reports the UAE’s official news agency WAM. He also cited the International Labor Organization (ILO) report issued early this year on the employment horizons, which said that unemployment in the Middle East could reach about three million.
Speaking at the Arab Labor Conference in Amman, he said that the UAE has already implemented a series of policies aimed at stabilizing the labor market, including “encouragement of labor flexible models and facilitation of labor transfer among the Arab countries.”
While it is impossible to predict the exact number of job cuts in Dubai and the UAE as a whole, the number has easily reached thousands. Most of the major property developers in Dubai, including Nakheel, Emaar, Damac, Omniyat, and several others have cut staff numbers. Financial houses and banks, architectural firms, and even publishing houses like ITP have laid off hundreds of employees since the crisis began last year.
In fact according to a recent report by investment bank EFG-Hermes, Dubai’s population will decrease sharply this year as a result of the financial crisis and job cuts. “We forecast negative net population growth in Dubai in 2009 with the population declining to 1.49 million from 1.79 million in 2008 (17 percent decline),” says the report. It attributes the fall to a 30 percent drop in the number of construction workers and all the real-estate related and financial services sectors.
“Summer 2009 should be a key period as we believe there are a number of professionals who have lost jobs in the beginning of the year but who are staying on until the summer in order to allow their children to complete the school year,” it adds.
The Dubai government is now planning to inject $10 billion into the economy in order to increase liquidity and revive activity in the market. Though the amount will only be loaned to state-related companies, the government has said that it will also unveil aid for small and medium-sized companies. It hopes that the stimulus will provide support to public and private companies across the emirate, help to grow business and prevent job losses.
The government has also taken more stringent steps in the public sector; an official told local Arabic daily Emarat Al Youm last month that the Dubai government will not lay off any of its staff.
“Our eyes and our focus are on the job market. We want to safeguard job opportunities and hopefully shield Dubai from the financial crisis through government action. Everything is on the table, nothing is taboo,” Raed Safadi, chief economist at Dubai government’s Department of Economic Development said recently.