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Friday, July 8, 2011

Abu Dhabi cuts expat jobs to trim costs

By Arab News
ABU DHABI: Wealthy Gulf Arab emirate Abu Dhabi has laid off large numbers of foreign workers as it looks to lower costs and promote jobs for citizens, several people familiar with the matter said.

Hundreds more expatriate jobs could be on the line in the near future at Abu Dhabi government departments, two sources at the offices said, adding exact numbers are not available.

The capital of the United Arab Emirates, the emirate is home to most of its oil wealth.

The sources, speaking on condition of anonymity due to the sensitivity of the issue, said Abu Dhabi's Emiratization drive was being directed from the highest levels: The Executive Council, which is chaired by Crown Prince Sheikh Mohammed bin Zayed Al-Nahayan.

Sheikh Mohammed's brother and vice chair of the Executive Council, Sheikh Hazza bin Zayed Al-Nahayan — appointed in December in his first council role — is said to be overseeing the accelerated push.

A spokesman at the Executive Council General Secretariat was not immediately available for comment.

Workplaces affected so far include the Department of Transport, Abu Dhabi municipality, Abu Dhabi Culture and Heritage (ADCH) and at least two government owned hospitals, among others.

One expatriate employee at the ADCH said 118 staff had been asked to leave within one to three months, including himself.

“The reason they've given is Emiratization,” he said, referring to the incentives and quota program aimed at boosting national employment.

Abu Dhabi is in the midst of a strategic review across all government departments, to centralize fundraising and improve accountability in the public sector.

“There is clearly some anxiety about the risk of rebelliousness among the new generation of Emiratis,” said David Butter, MENA regional director at the Economist Intelligence Unit in London.

“Many ... have reason to question the decisions that have been taken to create a society and work environment so skewed in favor of expatriates.”

The UAE, shielded from anti-government protests that have rocked Arab states, is conscious of the potential for discontent especially among Emirati youth, more so since state jobs are no longer guaranteed.

One Abu Dhabi-based analyst said in some cases, expatriate contracts were not being renewed to cut bulging salary budgets.

The UAE, like much of the Gulf region, depends on foreign workers to fill jobs at all levels of the economy, hampered by a small local population and lack of qualified candidates.

Foreign workers hold key positions running national airlines, real estate, financial services and the media industry, as well as strategic roles within national government.

There are 35,000 unemployed Emiratis in the UAE, and only seven percent of nationals work in the private sector, according to the Ministry of Economy.

Government training schemes have readied more than 6,000 Emiratis for the public sector, Sheikh Mohammed said in June, who urged government and state firms to find roles for them.

There are already quotas for Emirati employees, but, increasingly, a renewed urgency to implement more direct measures after popular protests hit the broader region earlier this year.

“Regional events may have prompted the government to hasten the Emiratization of the job market in order to pre-empt any potential socio-economic unrest,” said Ghanem Nuseibeh, founder of London-based Cornerstone Global Associates.

“The government's challenge is to balance the needs of the local population in terms of adequate employment and employability, as well as ensuring the country does not lose its competitive advantage.”

Labor Minister Saqr Gobash said in May that up to 20,000 Emirati private sector jobs a year need to be created in the next decade to allow school-leavers to enter the labor market.

“That was always the objective, to have a lean, efficient government and allowing the private sector to flourish,” said an Abu Dhabi government official familiar with the matter.

“There are also better qualified nationals coming out of universities who can be catalysts for further evolution. It is not a new thing, just continued polishing of the apple.”

The private sector has so far largely escaped significant expat job cuts but the pressure is on. First Gulf Bank, a leading Abu Dhabi lender, is said to have laid off scores of expatriates in the last few months.

One senior First Gulf employee said she was replaced by an Emirati despite being told she was the right person for the job.

Abu Dhabi Islamic Bank said it would take on double the number of Emirati summer interns this year than last.

But years of attracting qualified expatriates to fill key roles in government and business will not be overturned anytime soon — nor is that the objective.

"The size of the UAE economy is such that the majority of the work force will be expatriate," Cornerstone's Nuseibeh said. "The key thing for the government is to ensure that Emirati unemployment rate remains low, and that it (Emirati employment) is substantially increased in the private sector, and not only in the public sector.
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