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UAE public sector hit stagnation, study

A recent study reveals that the UAE government must steer its citizens into the private sector.

June 7, 2010 10:20 by

A new report concludes that the government of the United Arab Emirates needs to encourage more citizens to find employment in the private sector because there is no more room for growth in the public sector.

The report, written by academics at the United Arab Emirates University in the Emirate of Al Ain, concludes that although a majority of nationals works in the public sector, nevertheless it has reached a point of stagnation and must aggressively steer citizens into the private sector. According the study, Emiratis comprise only four percent of the private sector work force, compared with 52 percent in the public sector. The reminder of the positions are taken up by expatriates from other countries who have moved to the UAE for employment.

The overwhelming influx of foreign workers has allowed the Emirates to develop a modern economy since the discovery of oil in the 1960s; but since that time the demographic balance has shifted so that Emiratis now account for a mere 20 percent of the population.

According to the report, citizens’ expectations that “the government will provide” for them is a major problem.

“These jobs-for-life provide salaries several times higher than private-sector ones and in addition, convey an array of benefits such as shorter working hours and longer holidays,” the report says.

The study also singles out pension packages, which it calls “generous.” On average, after completing 20 years of service, nationals are entitled to retire on 80 percent of their final salary.

Ingo Forstenlechner, assistant professor in the Economics & Finance Department of the United Arab Emirates University, and one of the co-authors of the report, told The Media Line that, “It’s all about managing the expectation that you think you have the right, just because you think you are a citizen, to a well-paying and minimally-productive job” told The Media Line.

According to the report, “it is the way in which oil wealth has been historically distributed that has led to a situation in which nationals choose to remain unemployed until they obtain a government job.”

Asked what will happen in the future if nothing is done, Forstenlechner replied that,

“There will be much more unemployment in the future among Emiratis. The public sector is not growing; it can’t provide enough jobs for everyone. On the contrary, entire departments are being outsourced,” according to Forstenlechner.

Asked whether the government is listening, Forstenlechner pointed out that in times when these questions are becoming more and more important, government funding for research is being cut.

Regarding the future, the report predicts that, “if the social contract is not updated to reflect contemporary demographic and labor-market realities, increasing numbers of unemployed nationals,” those without connections to secure a public sector job “will become ever more likely to voice their discontent and ask exactly what is in the ‘ruling bargain’ for them.”

“Expatriates in general do not make a point of learning the local language or customs which creates a situation of Emirati culture and traditions being represented mostly within official circles and less so in the social circles,” Sultan Sooud Al-Qassemi, Emirati columnist recently told The Media Line. It’s one example of how the impact the influx of foreign workers not only impacts on the UAE’s economic situation, but also effects the country’s social balance.


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