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Wed 12 Dec 2007 05:01 PM

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Minister blames dollar peg for strikes

Reason for wave of protests is falling value of dirham due to link to dollar, UAE labour minister says.

The UAE Minister of Labour on Wednesday blamed the recent wave of labourer strikes and protests around the Emirates on the drop in the dirham’s value due to its peg to the tumbling US dollar.

"The main reason [workers are striking] is related to currency change as a result of the dirham’s pegging to the dollar," Ali Abdulla Al Kaabi told a press conference.

Al Kaabi's remarks are likely to increase pressure on the UAE to revalue or depeg the dirham, which some suggest is undervalued by up to 20%.

“We find that many workers do not understand that their wage is being affected by the dirham’s value going down because of the dollar," the minister added.

Labourers in the UAE are struggling under the weight of the soaring cost of living in the Gulf Arab state, coupled with the relative drop in their salaries due to the falling value of the dollar, which has hit record lows against the major global currencies.

Expatriate labourers from countries such as India, where the rupee has soared in value against the dirham, have seen the little money they make to send home reduced even further.

It is common for construction workers in the UAE to can make as little as 500 dirhams ($136) a month.

Demanding increases in salaries to make up for their weakened pay, workers have taken to the streets in a number of protests over the past two months, which in some cases have turned violent.

In the most high-profile protest, almost 40,000 employees of the UAE's largest construction company Arabtec Holding last month staged a ten-day strike, only going back to work after the company agreed a 20% pay increase.

Earlier in November several thousand manual workers became involved in a violent protest, blocking Jebel Ali road and attacking police and passing motorists with stones.

Al Kaabi said that although working to protect labourers’ rights and safe working conditions were a top priority, the government will maintain a strict, zero-tolerance approach to violence.

“Anyone taking part in violent demonstrations will be deported,” he said. “If it is a thousand or a hundred, we don’t care. Workers must respect the laws of this country.”

The Ministry of Labour said last month that those involved in the violent protest in Jebel Ali would be deported. Al Kaabi would not give an exact figure for the number of workers deportees this year.

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