A report has criticised the business community in the GCC for not supporting the government’s Emiratisation plan to hire more locals.
‘The National’ reports that Steffen Hertog, associate professor at the London School of Economics, wrote in his report “The Private Sector and Reform in the Gulf Cooperation Council” that the GCC is still heavily reliant on government-backed entities and government assistance. His report says the government must do more to provide investment opportunities for GCC nationals, while the private businesses should likewise foster a matching level of contribution towards the development of the knowledge-based economy.
Lack of demonstrable support by the business community
In the GCC, the private sector has lagged in technology development, modernisation of corporate governance, and in the promotion of productivity across the economy. Private businesses in the GCC have flourished over the years backed by a tax-free environment and on account of the government’s efforts to achieve economic diversification away from hydrocarbon exports.
In a bid to attract more citizens into the private sector, the United Arab Emirates is considering making changes to its labour laws. The UAE’s public sector employs a large number of Emiratis, but any fall in oil prices could place severe pressure on government expenditures toward this goal. State authorities had named 2013, The year of Emiratisation to promote job opportunities in the private sector and improve technical skills of the working population.
Emiratisation Plan and the Penalties for non-compliance
Over ninety percent of the UAE workforce is based on foreign workers. The oil-rich Emirate offers UAE citizens generous benefits, including free government education, health care, and housing assistance. Government figures suggest that about 14 percent of Emiratis are jobless, but the government is taking active measures to reduce unemployment. Last year, the UAE government announced heavy fines up to Dh20000 each time a company was found guilty of violating Emiratisation rules. With the government acting to ensure enough jobs are made available for locals in the private and public sector, penalties are aimed at reducing the instances of “ghost” Emiratisation in the private sector.