BY MOST measures, the emirate of Abu Dhabi, the richest of the seven statelets that make up the United Arab Emirates (UAE), is wonderfully affluent. With only 2m people and a vast reservoir of underground oil, its income of $90,000 per person is second in the world only to nearby Qatar. Its indigenous citizens, amounting to less than a third of the overall population, are used to government largesse: as a generous provider of services and benefits, they have generally been happy to forgo political rights. Until now.
The Arab spring and the rise of Islamist governments and movements has unnerved Abu Dhabi’s rulers, who eye unrest in nearby Bahrain, among other places, with trepidation. Government officials are particularly twitchy about the emerging power and influence of the Muslim Brotherhood, whose catchy religious language and calls for social and economic justice resonate across the UAE. In the past few months around 60 activists have been arrested, some of whom belong to the Islah (Reform) movement, which is linked to the Brotherhood. To the shock of many Emiratis, seven dissenters had previously had their citizenship revoked, which means that their assets and basic rights such as education for their children have been frozen. The official message to other Emiratis who may harbour sympathy for al-Islah is clear. Keep away from it—or else.
The UAE crackdown began last year after civil-society groups lodged a petition asking for more political openness and a fully elected parliament. As well as locking up the petitioners, the government also rushed to treat a social and economic sore that many locals have long complained about: a lack of jobs.
A year ago Sheikh Muhammad bin Zayed, Abu Dhabi’s crown prince, ordered that 6,000 unemployed Emiratis immediately be found government jobs. An already job-saturated public sector was thus put at the forefront of government efforts to dampen social unrest. Fast-tracked measures in Abu Dhabi have included ensuring that young Emiratis get job placements and promises of training. The authorities seem unconcerned, for the time being, that most such jobs are in the public sector, placing a huge financial burden on the government, with salaries generally starting between $6,800 and $9,500 a month. Over 90% of working citizens are already employed by the state or bodies close to it. Right now, pumping money into job creation trumps everything else.
The responsibility for putting Emiratis into work falls to the Tawteen Council, which enforces “emiratisation”. It is imposing percentage quotas for citizens across all sectors. Tawteen’s official unemployment register of active jobseekers stands at over 22,000, most of whom are well-educated Emirati women from outlying areas, such as al-Ain, where work is scarce. Tawteen is testing initiatives to create part-time work and job-sharing in an effort to give more work to women. One unintended result of the new job-making policy is that some locals have quit their existing jobs in the hope of signing up with Tawteen and finding better, more rewarding ones. Hence the unemployment register has doubled in the past year and a half.
Putting unemployed Emiratis into government jobs is not difficult, if the aim is simply to placate locals. Extra chairs in offices can, and have been, found. But this is unlikely to foster longer-term development. Abu Dhabi’s “Economic Vision 2030” seeks to create a globally competitive knowledge-based economy, whereas abruptly herding locals into public-sector jobs adds no real value. Should the trend of public-sector employment persist, taking demography into account, several hundred thousand more nationals will have to be absorbed by the public sector by 2030, bloating it to more than four times its size today, a fiscally untenable prospect.
Meanwhile, the private sector is hamstrung by government regulation and disjointed policies. Officials anyway find it hard to draw a line between the public and private sectors, given the government’s control over both. Private companies have little incentive to hire locals, as opposed to the foreign workers who make up the bulk of their workforces, since the rules of hiring and firing locals are so strict and lower wages in the private sector make citizens loth to apply. Although a quarter of 20- to 24-year-old locals are unemployed, most would rather wait for a government job than work a lot harder in a private company. In the longer run the government’s recent rush to dish out public-sector jobs will be bad news for the economy.
Source: The Economist