Leader calls for shake-up in United Arab Emirates
SHEIKH Mohammed bin Rashid al-Maktoum, Prime Minister of the United Arab Emirates, envisions his country as a world-class financial hub run by Emiratis. Government financial support undermines that goal.
All 800,000 Emirati citizens get free education and health care, and subsidised utilities. Emirati men can claim free land and interest-free loans to build homes. Other benefits include a $A21,000 payment towards wedding costs.
The handouts, based on traditions of royal patronage dating back centuries, now discourage citizens from working, academics say. Expatriates outnumber Emiratis and dominate fields such as banking, law and technology. The quandary for Sheikh Mohammed is how to reduce the culture of dependence without alienating his people.
“The relationship between work and income is broken,” says Kenneth Wilson, Dubai-based director of the Economic and Policy Research Unit at Zayed University, a school for Emirati women that opened in 1998. “That’s unlikely to change until the Government starts trying to give incentives to work in the private or corporate sector.”
The average male Emirati receives benefits worth about 204,000 dirhams ($A62,600) a year, according to the university’s research.
Khalid Saeed, 30, is building a villa on a 1400 square-metre plot of land he received free from the Government.
Mr Saeed, who has a bachelor’s degree from UAE University and a master’s from Heriot-Watt University in Edinburgh, is living with his parents until his villa is built. His parents’ is on a 3700-square-metre plot, and has enough room for Mr Saeed, his wife and three daughters, as well as his brother and his wife. Rooms at the back are rented out to Asian workers.
“The biggest expense in our lives is taken care of,” says Mr Saeed, who works as a planning manager for state-owned Dubai Properties, where he helps co-ordinate residential and commercial real estate projects.
About 80 per cent of employed Emiratis work for the Government and less than 10 per cent work in private industry.
Most UAE citizens lack the skills to compete with expatriates for jobs, according to an International Monetary Fund report from 2005.
Because the law requires UAE companies to be majority-owned by locals, most businesses have local chairmen and chief executives. Yet only one of the 28 members of the Dubai Financial Market General Index has an Emirati chief financial officer.
“The CFO needs more hard knowledge in terms of accounting and compliance, which many of today’s Emiratis don’t have,” says Eckart Woertz, an economist at the Gulf Research Centre in Dubai.
Citizens make up less than a fifth of the UAE’s 4.3 million residents. They account for 3 per cent in Dubai, the second-largest of the state’s seven sheikhdoms, Mr Wilson says.
The proportion of citizens dropped as the labour force more than doubled in the decade up to 2004, reflecting the economy’s shift away from oil into finance, real estate and tourism.
While people travel to the UAE to work as labourers, housemaids, bankers and executives, the Government estimates unemployment among Emiratis is 17 per cent.
In an April speech in the capital, Abu Dhabi, Sheikh Mohammed pledged to improve the education system and reduce quotas for hiring nationals to encourage locals to increase their qualifications.
“The Government strategy seeks to move from the concept of social welfare to social development,” he said in the speech.
Sheikh Mohammed has already made some changes, with civil servants working an hour longer each day from July.
More significant steps to reduce privileges for Emiratis may be met with resistance, says Anthony Harris, a former British ambassador to the UAE who lives in Dubai.
During his lunch break on a recent weekday, Mr Saeed enjoyed an ice-cream with two friends. All were dressed in the traditional emirate kandoura, a body-length white robe.
“Getting financial help from the Government doesn’t demotivate me,” Mr Saeed says. “It gives me time to focus on my career. I take satisfaction in developing this country.”