Like many of her peers, 19-year-old Shamma al Dhami feels lucky to be in school and not trying to start a career. Her main concerns with finding a job are threefold: there are more job-seekers than positions; most of her friends and family who have jobs are not working in their chosen fields; and she is afraid of being discriminated against because she is Emirati. To some extent, her fears are justified. One recent study put youth unemployment in the UAE at around 30 per cent outside Dubai and found higher than average job insecurity across the emirates. And a 2007 study found that the UAE's private sector was 99 per cent expatriate. The average in other GCC countries was 60 per cent.
It is exactly this dearth of nationals employed in the private sector that the federal government's Emiratisation policy aims to fix. Numerically speaking, the campaign has been relatively successful. Tanmia, an employment agency for Emiratis, reported a 30 per cent rise in the number of people for whom it found private sector jobs in 2008. The Government has introduced additional measures to increase those numbers further, imposing enforceable quotas for Emirati hires (a five per cent increase annually with a target of a 40 percent Emirati workforce by 2012) and increasing the difficulty with which nationals can be fired.
But the banking and insurance industries, with exchange houses, are the only sectors mandated to implement Emiratisation measures. For someone like Shamma, who wants to go into communications engineering, the Emiratisation scheme seems to be putting too many employees in the wrong jobs. Simon Williams, chief economist at HSBC Middle East bank, argues that too much support for nationals in the private sector is "wrong". He says he sees a generation of 20- to 30-year-old nationals who are hard-working and ambitious; they don't need this support.
Mohammed Qaddura, chief executive of Ershaad, another Emirati employment agency, says his job would be easier if all nationals wanted to go into banking. "Because the banking industry recruits hundreds of people a year, people feel they're forced into it. Nationals want very specific jobs, and companies want the best people. When the employer wants someone else and the Emirati wants a different job, we have a situation of mutual dissatisfaction."
Hessa al Mulla, 22, a media student at Zayed University, says the private sector simply isn't appealing to some nationals: "They don't want to work nine to five. They want to finish early." But she is reinforcing a stereotype that applies to nationals from all "rentier" states. Douglas Yates, a professor of international and comparative politics at the American University of Paris, explains: "Civil servants see their principal duty as being available in their offices during working hours; the best and brightest abandon business and seek out lucrative government employment; manual labour is farmed out to foreign workers, whose remittances flood out of the rentier economy; and so on. In extreme cases income is derived simply from citizenship."
But an important element of raising the competitiveness of the economy is empowering nationals to increase their participation in it. McKinsey and Company found low private sector employment among nationals largely a function of unrealistic expectations in relation to education levels and experience. Any country with a small population and considerable wealth will always need a sizable foreign work force. But rather than coddling its nationals, the UAE should be establishing means of integrating them further into the workforce by ensuring they are truly competitive candidates.
Yates describes what is among the most toxic byproducts of rentier economies as the "break in the work-reward causation". The UAE's economy and its people would benefit from a serious renegotiation of this social contract, more rigorous academic institutions and elimination of policies that force companies to hire nationals and make it difficult for them to be fired. These measures over time would catalyse the development of a reinvigorated national work ethic and a sense of empowerment among people that their jobs were earned, not reserved for them.
The UAE has been trying to diversify its economy, and the plans, so far, are working. Just over 60 per cent of the country's 2005 GDP came from non-oil sectors. The country needs to continue that process, employing people based on qualification, not regulation, to raise its competitiveness. As it grows, so too will the workforce: and the local people will not only be included in that growth, they are the ones who'll be driving it.