Dh50 billion: UAE’s yearly social spending on expats

Staff Reporter
Filed on October 14, 2010

DUBAI The UAE government spends about Dh50 billion per year as indirect social costs for the expatriate labour force in the country, according to a study.

The study by Dr Mouawiya Al Awad, Director of Institute for Social and Economic Research, Zayed University, says that the overall social cost, such as energy subsidies, public services and infrastructure, social security etc, is estimated to be Dh14,066 per expat worker. However, a foreign worker pays an average of Dh2,507 annually in various fees to government departments. Therefore, the study said, the average annual social cost per foreign worker is estimated at Dh11,559.

The study, which excluded the social costs related to domestic workers, said 80 per cent of the 4 million expat workforce in the private sector were unskilled workers while the rest were skilled. The private sector bears an overall annual administrative and recruitment cost of around Dh2,674 per worker — Dh3,404 for skilled workers and Dh2,296 for unskilled workers.

Pointing out that an additional investment of Dh22 billion per year will be needed for the UAE government to achieve its goal of having a knowledge-based economy and balance the ratio of unskilled and skilled workers at 40:60, Dr Al Awad called on the private sector to pay up a part of this cost through better partnership with the government.

Presenting the details of the 2009 UAE labour force survey, which was carried out among 21,000 individuals from 7,900 households, Dr Rosalia Vazquez–Alvarez, economic adviser, Economic Policy and Research Centre, Dubai Economic Council, said 56 per cent of Emiratis were working while 77 per cent of expatriates were employed. The unemployment rate among the Emiratis was 31 per cent while it was seven per cent among the expatriates. The rest of the sample were housewives.

Comparing the wages and education levels of Emiratis and expatriates, Dr Alvarez said the UAE labour market did not pay up the workforce, especially Emiratis according to their educational qualifications and experience, discouraging youngsters from pursuing higher education to achieve better positions and benefits at work.

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