Since the formation of the UAE in 1971, the country used the early oil revenue to kick-start a series of projects and investments that would lay the foundations for long-term economic growth.
With such a swift transformation and the resulting impact to the local culture and society in correlation with the rapid economic development, it became necessary for both the public and private sector to attract and employ expatriate workers to help build the infrastructure and economy.
One of the most radical changes to the local society was the establishment of compulsory education for Emirati children. The late president of the UAE and ruler of Abu Dhabi, Sheikh Zayed Bin Sultan Al Nahyan, placed great emphasis on the need for an educated population to drive the country forward.
Pattern of growth
Since 1972, and in particular during the period since the end of the first Gulf War, the UAE economy has grown exponentially. From 2002 to 2006 the UAE recorded one of the highest GDP growth rates in the world due to strong oil prices, the proliferation of large-scale construction projects, high levels of public spending and an increase in development of the non-oil sector. With the nominal GDP growth in 2007 jumping approximately 16.8% from 2006 levels, there is much discussion on whether such growth is sustainable. Taking into consideration plans for further development and the increasing efforts to attract foreign direct investment (FDI) to the UAE, it is becoming evident that a major concern emerging from this rapid growth is increasing levels of unemployment amongst Emiratis. Reliance on expatriate workers will remain high in the long term yet there are increasing concerns with regard to the challenges of finding suitable employment for Emiratis in the short and long term, and this poses a serious challenge to the government.
The UAE population is growing at an annual rate of 6% and in 2006 Emiratis made up approximately 12% of the population. This imbalance can be considered a reasonably normal phenomenon throughout the GCC states since the discovery of oil. However, with more than 13,000 Emiratis graduating each year and with growing levels of unemployment, the pressure to find them employment is building.
Education is seen as an increasingly important factor in the development of UAE nationals, and the private sector has the opportunity to take an active role in supporting educational initiatives as part of their corporate social responsibility (CSR) and sustainability management initiatives. A high quality education has the potential to equip the national workforce with the capabilities of dealing with the demands of a growing and diversified economy. It is recognized that the existing education system has not provided Emiratis with the tools to compete in the job market. According to UNESCO’s Statistical Office in 2006 public expenditure on education accounted for 1.6 % of GDP and 22.5% of the government’s overall expenditure in the UAE. Only 3% of this was distributed towards tertiary education, yet gross enrollments in tertiary education were slightly above the regional average.
Even while it is recognized that education is vital to building a sustainable workforce, the provision of an accessible and high quality further or higher education system is threatened by lack of government funding. The lack of funding results in constraints on state institutions such as the Higher Colleges of Technology or UAE University in terms of the number of students they can accept per academic year. With the majority of Emiratis preferring to enroll in public institutions, and in order to be competitive with other countries to achieve international standards, an increase to a level of over 3.5% in GDP funding for higher education has been required since 2005 (Funding Students First, MOE).
Learning at home and abroad
Traditionally, the more affluent members of the Emirati community studied overseas or through scholarships provided from both public and private sector sources. However, with the proliferation of Western universities across the UAE and following 9/11, changes are occurring in this practice.
With the continued rise in numbers of UAE national graduates entering the workforce annually, and taking into account the number of nationals already unemployed (33,000 or 5% reported by Gulf News in July 2006, while Emirates Business reported the figure as 3.71% in 2008), it has also become unsustainable for the government to continue the habit of job-creation for Emiratis by increasing public sector jobs. With the government sector virtually at saturation level through the absorption of Emirati employees, restructuring of governmental departments is now underway and efficiency and productivity has been highlighted as part of the reform. ‘Emiratization’ has now become a pressing issue and attempts have been made to implement it in various sectors such as public relations (immigration and government relations positions), secretarial positions and for human resource managers. Private sector jobs in banking and insurance have been highlighted as priorities for Emiratization and quotas have been imposed on companies.
At a federal and local government level, educational reforms and initiatives are being implemented with the establishment of programs such as Schools for Tomorrow (Madaris al-Ghad) from the Ministry of Education to revamp the public education system to create a ‘world-class’ education system. The Emirates Nationals’ Development Program (ENDP) has been established to support a policy of Emiratization in the private sector, by assisting graduates to find positions in the private sector.
Generally, and in particular amongst private sector employers, Emiratis are seen to be unable to compete in the job market against other more qualified, educated and experienced expatriate workers. Emiratis are also seen to have unrealistic expectations in terms of positions of seniority, salary and working hours. The private sector has long held the belief that complications arise from the employment of Emiratis and finds it difficult to attract high-potential UAE nationals with the right skill-base and experience. With the reform taking place in education there needs to be greater private sector awareness of the responsibility of businesses to establish UAE National development programs. Cross-sector partnerships will go a long way towards bridging the gaps between the skills available and the skills required in the job market. The greatest levels of impact will be achieved through the implementation of training, mentoring and development initiatives, including comprehensive knowledge-transfer programs to support and encourage skill-based Emiratization.
The establishment of local government education councils, ENDP and the ongoing work of Tanmia to educate, train and find employment for Emiratis in the private sector signals progress. The construction of educational establishments and creation of ‘education free zones’ are designed to encourage overseas institutions to set up and invest in the UAE. Will this be considered enough to meet the needs of the growing Emirati population? Probably not. Along with the educational reform taking place, the private sector needs to demonstrate accountability to the community in which they do business. Such contributions can lead to significant change in their specific industries and lead to higher levels of prosperity through investment in relevant and where appropriate vocational and skills-based training, the provision of internships, and increased awareness of the resulting business benefits from playing a key role in preparing the UAE national workforce to become attractive propositions to prospective employers in private organizations.
Dilemmas for the future
There are some difficult issues to be addressed. Education, training and employment are key CSR requirements for organizations to contribute to building a sustainable workforce. While it is recognized that the dependence on expatriate workers will continue for many years, questions are being raised about the rights of Emiratis to find employment, thereby avoiding unemployment problems in the short and long term. The paradox appears to be that while the UAE is forging ahead with innovative real estate projects in order to attract investment from expatriates, as diversification of the economy is being keenly pursued and encouraged, there is a question about the value of diversity in the UAE workforce.
With projections of millions of square feet of office space being developed, the huge residential community projects and expected result of job creation, where will the people with the right skills and experience come from — especially now with rents and inflation continuing to rise and with the current instability of global financial markets.
It is clear that there are certain steps that the private sector can implement and drive across the UAE to address the challenges facing Emirati graduates and prospective employees. As the UAE moves towards a more knowledge-based economy, the local government and more recently at federal levels seems to be moving towards redressing the balance between the public and private sectors by aligning themselves more with the private sector style of business. This seems to be resulting in more parity with salaries, benefits and working conditions and with the result of attracting more nationals to the private sector.
For the future, public-private sector partnerships which proactively encourage the development of the Emirati workforce through strategic CSR programs to educate, train, develop and employ UAE nationals will have the potential not only to create a model for other GCC countries but to drive change across the region.
Belinda Scott is the CSR officer at the National Bank of Abu Dhabi (NBAD)
