Emiratisation failing to cut UAE jobless rate - Al Mulla

Top UAE lawyer Dr Habib Al Mulla says the UAE gov't's Emiritisation quotas are 'a deceiving solution'
By Courtney Trenwith
Tue 12 Nov 2013 01:39 PM

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

Private sector employers were manipulating government quotas that encourage the employment of nationals, while the real issue of properly educating Emiratis was 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 the drafting of many UAE and emirate level laws and created the country's financial free zones, said emiritisation policies were clearly not working, with 28 percent of the 1m UAE nationals still without jobs.

“That's shocking, particularly in a country that provides over 5m jobs,” he said.

“To put this in a comparative context, the Eurozone unemployment rate rose in 2012 to 11.8 percent 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 setting quotas was the wrong method, Al Mulla said.

“Imposing quotas is an easy solution to the problem of unemployment. However, it's temporary, impractical, and a deceiving solution,” he said.

“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.”

For example, 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 them not to join the company at the end of their studies, to enable it 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 percent … 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 skirting the quotas by dividing into numerous entities and outsourcing to each other, meaning the original 5 percent of nationals employed suddenly rose without any new employees, he said.

Even under the quota system, only 8 percent of private sector employees are Emirati.

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

Al Mulla said 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,” Al Mulla said.

“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 [speech] 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,” Al Mulla 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.”

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