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Unemployment among Emiratis not due to recession

PARIS — Saqr Ghobash, the UAE Minister of Labour, said the nation’s goal of full employment of job seekers among UAE nationals has been hampered by reasons other than the economic downturn during 2008-2010.

Ghobash, in a speech at the G20 Labour and Employment Ministerial Meeting in Paris, said it was affected not by a significant loss of jobs held by nationals during economic crisis or jobs they qualified to occupy, but rather by causes that have their root in three factors.

Explaining why the employment and labour policies in the UAE “stem from a somewhat different set of priorities than those of G20 governments” at this juncture, the minister said “the key difference is that our priorities have less to do with dealing with the fallouts of the 2008-’10 global economic downturn, and more to do with longstanding, structural labour and employment challenges that have emerged and accumulated over the past three decades.

The three factors identified by the minister are as follows:

“ONE: The overwhelming majority of UAE nationals are employed by the public sector. Two key factors are contributing to the non-sustainability of this model: first, accelerated growth of the number of young job seekers entering the labour market, explained by evolving demographics in favour of a younger population; and, second, the public sector is approaching employment saturation, suggesting that a greater number of our job seekers need to be employed in the private sector.

“TWO: A substantial wage, benefit and other incentive differential historically made employment in the public sector the preferred choice of most of our national job-seekers, suggesting that policies to promote private sector employment must account for this differential through the introduction of government wage subsidies, or public service reform or a combination thereof.

“Third: An important mismatch between the type of jobs created in the UAE economy and the skills possessed by young men and women entering the labour market. On one hand, most job creation has been concentrated in low skill, labour intensive sectors that are unattractive to national job seekers (and sustained by open admission of foreign workers at wages determined by sending countries’ conditions).

“On the other hand, even attractive employment opportunities in the private sector require skills our educational and skills development systems have been slow to develop given the traditional orientation towards public sector needs.”

According to Ghobash, as the unemployment rate among UAE nationals rose steadily both prior, during and after the recent global economic downturn, “our response could not be limited to cycle-driven public expenditure to create jobs but rather a combination of short and medium term subsidies designed to shift employment to the private sector. On one hand, combined with a gradual reform of our civil service regime and skills development in support of the same goal, and supported by macro-economic policy shifts that favour job creation in targeted sectors of economic activity.”

The minister also took the opportunity to congratulate France on its leadership in ensuring that labour and employment issues remained firmly on the G20 agenda throughout this year in preparation for the summit in 
November.”

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