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Sun 27 Nov 2011 01:03 PM

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Gulf states need a rethink on red tape

Why reining in red tape is key to offsetting financial woes and keeping the GCC competitive

Gulf states need a rethink on red tape
Hamad Buamim, the director general of the Dubai Chamber, has said the UAEs visa rules need a rethink

"A long-term recession is going to happen - and the one thing we can be certain of is that the international financial crisis is going to be chronic.”

Quoting these words from Chinese vice premier Li Keqiang, ITP chairman Andrew Neil kicked off last week’s Fifth Arabian Business Forum. For the many who attended the event, there wasn’t much to be heard in the way of good news. Eurozone debt is now up to an eye-watering nine trillion euros, and only the US and Japan have more debt than Italy. Speaker after speaker rolled out harsh predictions for the global economy, coupled with suggestions as to how the Gulf countries should react to the crisis. Ziad Makhzoumi, the chief financial officer of Arabtec, suggested that it will soon be time to review the policy of pegging many regional currencies to the dollar, warning that this will at some stage affect GCC nations’ buying power.

But if there’s any certainty in this phase of the Gulf’s development, it is this; each country needs to be as competitive as possible to attract new businesses and entrepreneurs to help spur their economies. That’s why it was so refreshing to hear Hamad Buamim, the director general of the Dubai Chamber, speak candidly about the issue of visas.

“I have no doubt that relaxing visa processes would help businesses to profit,” Buamim said. “There are too many restrictions related to the time, the cost, and the process in general. We want business people to look at things long-term. [The law] has to be reviewed.”

“The multiple-entry visa, and investors’ visa are at the top of our agenda,” he continued. “If we can have a long-term visa for businesses, as Malaysia, has - it is very important - and we are advocating that for businesses in Dubai. The current visa doesn’t help long-term stability.”

The recent decision to implement two-year labour cards, rather than the current three-year regime, raised eyebrows amongst many in the business community here. That reduction in the length of labour-card validity means that residential visas are also cut short by the same time period. That, in turn, means more red tape, and higher expenses. Buamim has not been alone in his call for the regulations to be reconsidered. High-profile business leaders like Khalid Al Tayer, CEO of the Al Tayer Retail Group and Mohi-Din BinHendi, president of BinHendi Enterprises, have both recently raised their own concerns about both the length of working visas, and the cost of bringing in workers from overseas.

If that wasn’t enough, Sanjay Verma, the Indian consul general in Dubai, revealed that requests for visas from Indians wanting to work in the UAE in 2010 had actually dropped, by two percent, for the first time in decades, due to strong demand for employees back home. Is it coincidence that these two stories were the most-read on our website last week? I don’t think so.

A quick look around Dubai’s competitors shows that Singapore offers a variety of visas for potential workers and investors. The city-state has a specific Entrepreneur Pass for those intending to set up businesses, and a Multiple Journey Visa can be issued for up to five years.

And as the UAE, and other Gulf states, push to diversify their economies still further, it’s clear that entrepreneurs and small and medium-sized business owners will be pivotal to this aim.

A two percent drop in Indian visa requests may not be significant just yet. It’s important, however, that this trickle does not become a flood.

(Ed Attwood is the deputy editor of Arabian Business. The opinions expressed are his own.)

Stephen 8 years ago

The 2 yr visa means meployees consioulsy have to consider every 2 years whether to renew or move on -mature economies companies dont have this problem - in some industries this is barely enoufh time to get famliar withe role.