United Arab Emirates (UAE) is a Gulf nation that has natural resources such as oil and gas in abundance. If we talk about the financial performance of UAE, its GDP is the highest among all the Asian nations. The credit goes to the finding of the natural resources way back in 1960. Unfortunately, this discovery led to one of the major problems being faced by the nation; the labor problem.
Owing to the tremendous work required in the oil fields and refineries, the government had to hire labor force from other nations; the local labor force was not enough to tackle the amount of toil required. The labor problem further escalated when revenues started pouring in; other development works were started and more labor force was necessitated.
With each passing year, the number of expatriate labor force kept on increasing and today, they are all over the nation. The reason can be attributed to the cheap labor force available in developing countries like India, Pakistan, Sri Lanka, Bangladesh, etc. The situation got so worse that in the year 2009, the number of unemployed nationals rose to 40,000 (Baxter, 2009).
The chart at Appendix 1 depicts the employment rate in UAE. From the data, it is evident that among the national urban population, 70.5% are employed as compared to 64.4% in the rural areas. It has been observed that during the past couple of years, due to the rapid growth of education among women, a good number of the educated lot is being employed in government and private organizations.
The percentage of employed females is 37.5 whereas, that of the males is 86.8. As mentioned earlier, the expatriate labor force has a stronghold and as such, 76.8% of the expatriates are employed as compared to only 38.7% of the locals (UAE Statistics, 2012).
The chart at Appendix 2 depicts the unemployment rates in UAE. The figures clearly show that as compared to 2.8% of the expatriate population who are unemployed, 14% of the nationals are without any job. The rural population, with 7.3% unemployment, lags behind the urban population that has 3.5% unemployment (UAE Statistics, 2012).
One of the main factors responsible for the greater percentage of rural unemployment is the distance from urban areas. This particular problem is faced by women to a greater extent. It should be understood that males might travel to distant locations for jobs but women have their own restrictions (Swan & Salem, 2011).
The incessant growth in population and the unwillingness of the locals to work for lesser wages – the expatriate labor force is available at cheap rates and since organizations want more profit, they prefer the expatriate labor force – has resulted in a wide gap between the expatriate labor force and the local labor force. Such mindsets of the locals might result in increasing the gap (Soto, 2012).
The figures are very astounding and unemployment among the nationals can have far-reaching negative impacts on the society as well as the economy. The government will have to invest more in the social benefits and this might result in an unsteady economy and the resources will not be in proportion.
The UAE government follows ‘Emiratisation’, under which it has issued several guidelines for private and government organizations, pertaining to the employment of locals.
In January 2011, the government made it mandatory for all private companies to hire at least 3% locals at the top posts – earlier, instead of the percentage, the private organizations had to appoint a specific number of locals (Kantaria, 2012). This is considered to be a major step towards protecting the interests of the nationals.
Another appreciable step that the government has taken in this regard is protecting the locals from undue dismissals. The employers are required to inform the concerned department 30 days in advance of the dismissal. The department reviews the problem and advises the employer accordingly.
It is noteworthy that if the department finds the dismissal unviable, the employer is advised to take remedial actions within 15 days and find a solution to the problem.
References
Baxter, E. (2009). UAE unemployment among locals at highest level. Web.
Kantaria, S. (2012). Recent key developments in UAE employment law. Web.
Soto, R. (2012). Labor market structures in Arab countries: What role for minimum wages? Web.
Swan, O. & Salem, O. (2011). Young women cut off from job market. Web.
UAE Statistics. (2012). Statistics by subject. Web.