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Tue 27 Sep 2016 09:28 AM

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Expat citizenship could help solve Dubai's economic challenge

About half of Dubai’s $143 billion pile of debt has to be repaid by the end of the decade - almost double the UAE’s forecast revenue from exporting oil this year

Expat citizenship could help solve Dubai's economic challenge

The solution to Dubai’s economic challenges might be right under its nose. The tiny emirate, the most diversified sheikhdom in the Gulf, has been affected like most of the region by low prices for the oil exported mainly by its neighbours.

One way to offset that impact might be to address an imbalanced workforce that is too reliant on expatriates. They make up 22 out of every 23 active workers, according to calculations based on official data. Dubai could even do worse than turn some of its skilled foreign workers into actual citizens.

About half of Dubai’s $143 billion pile of debt has to be repaid by the end of the decade, according to the International Monetary Fund. That is almost double the UAE’s forecast revenue from exporting oil this year. One of seven semi-autonomous sheikhdoms in the U.A.E., Dubai has endured the 53 percent fall in oil prices over the past two years relatively unscathed, but some belt tightening is inevitable. The Financial Times reported on Sept. 12 that Istithmar World – a government investment company – has made most of its staff redundant to save money.

Yet Dubai needs more people working, not fewer. The emirate depends almost entirely on foreign expatriates to make its service-driven economy function. Emiratis account for just one in every 23 active workers over the age of 15 – and 55 percent of those are government bureaucrats, or soldiers, according to official employment survey data for 2015 analysed by Breakingviews.

Getting citizens to work in a process called “emiratisation” has proved difficult. More than half of the estimated total Emirati population of 159,000 who are over 15 years old were considered economically inactive last year, despite only 2,154 being classed as unemployed. Some may not want to work, while others may not have to because of private wealth, or generous government handouts such as free housing and energy subsidies.

Were Dubai to offer citizenship to skilled foreigners, thereby increasing their prospects of upward career mobility, skilled employees would lay down roots. They might consume and invest more. The labour market would become more competitive. Current citizens might not like the idea, but without a more vibrant local economy, the lifestyles they take for granted may be harder to sustain.

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

Jad 3 years ago

How is the employed population coming from "Other Middle East" countries barely at 100,000 with all the current employees from Lebanon, Syria, Jordan and Palestine?

Shirin Alzebari 3 years ago

I loved Dubai, now I love Dubai more!

Neil 3 years ago

A bitter pill to swallow.

Sam 3 years ago

Where the rules change overnight without anyone really having a say in decisions - I think such a move will likely be benefiting very one-wayish. Does not sound like a great idea.
There is a huge divide between the ones wanting to become citizens (from troubled places) versus the ones eligible to become citizens (because the criterion surely has to be tough) - not many will go for citizenship.

Taimoor 3 years ago

I think its a very good idea. it will attract more investors to come and invest in this country. Also it's good for the economy

GoodToGo 3 years ago

Not to sound the voice of doom, but citizenship has been discussed before. I expect it to be done in the year Two thousand Never.

Stop wasting your time fantasizing about citizenship. Its not happening. I have been hearing this drum roll since 2007. It is like the carrot being dangled at the end of stick.

Even Saudi has actually announced citizenship but still no implementation. If you want citizenship, move to some other country.

Mohammad 3 years ago

Granting citizenship is a drastic move, notwithstanding the fact that Dubai did this in the 60s and 70s on a largescale to selected groups of longtime residents - the results were outstanding and the national security worry certain people had at the time proved to be baseless. However, perhaps Dubai should consider permanent residency before naturalisation.

AYH 3 years ago

I don't think we need to go so far as citizenship for expats. Just a long term residency program would address most of the concerns. For an expat to invest in the country and build deep roots, they need to be given a long term horizon. One can't just be expected to pack up and leave once you lose your job. Addressing this concern would go a long way in expats investing more in the region.

Joanna Davies 3 years ago

Why would one want citizenship.. Countries back home are booming and there are more financial opportunities back home.
Remember we are here in UAE , to make money, spend some and repatriate most of it..The government has made it clear , and we should not harbour any misconceptions

Fentoni 3 years ago

I'd imagine attraction for a UAE citizenship wouldn't come from Western Europe, Australasia or North American passport holders. I've met quite a few professionals from Iraq, Syria, Lebanon and Jordon, many of whom were either born here or spent most of their lives here who would welcome the opportunity. That said this article is one journalist's vision of a possible solution to the economic challenge ahead, wishful thinking. I don't see any desire by the UAE government to make this a reality.