Abu Dhabi: Labour Nationalisation

von Christopher Davidson

An allocative state that distributes oil wealth to citizens has long been a cornerstone for political stability in Abu Dhabi, the largest of the seven United Arab Emirates (UAE). However, many of the structures that it has created have historically limited the indigenous population's potential to participate fully in the emirate's extraordinary economic development.

Notably, a citizenry has been cultivated over 35 years that is now wholly accustomed to material benefits and no forms of extraction. Most have lacked the motivation to enter into competitive job markets. Although the problem was recognized in the 1990s, since then it has been compounded by a number of strategies that aimed to encourage nationals to participate, but in effect priced them out of the market and made them even more unattractive employees. In particular, labour laws that guaranteed access to special pension funds and limited their working hours greatly increased the cost of hiring nationals. More heavy handed were the quota systems that were introduced in certain industries, thus making expatriate colleagues and indeed employers resentful of their national counterparts.

Employers prefer foreigners

With many new economic sectors beginning to bloom and with a plethora of new employment opportunities in a fast growing private sector this problem will become increasingly acute and there is a real danger that the current generation of Abu Dhabi nationals will fail to integrate with the new economy. After all, ceteris paribus a private sector employer will prefer to hire foreign nationals with a proven work ethic and lower salary expectations. Today, it is difficult to ascertain the true extent of the problem, partly due to the lack of authoritative statistical surveys. Conservative estimates for the whole of the UAE, according to the federal National Human Resource Development and Employment Authority (Tanmia), are that there are currently 17,000 unemployed Emirati adults. However, other estimates have put the figure as high as 35,000, with many of these being degree holders. The majority of these are likely to be in Abu Dhabi. More broadly, it is thought that well over 50 percent of those nationals in receipt of the generous social security benefits are able bodied and capable of work.

Education system is failing

The only long term solution would seem to be improved education, at all levels. Nationals must begin to acquire the qualifications demanded by employers and meet the needs of the new economy. Moreover, they must have an educational experience that equips them to compete on level terms with expatriates, accept authority, and think critically – essential skills that were never a requirement of the old system of distributed public sector jobs. Unfortunately, the education system in Abu Dhabi and the UAE is failing badly, with the Education Development Index having ranked the UAE 90th out of 125 surveyed countries for the quality of its education provision. Moreover, in 2007 the World Bank indicated that the UAE's knowledge economy, that is the sectors of the economy relating to the production of knowledge and requiring skilled, educated professionals, has actually shrunk since 2005, with the blame being placed on a deterioration of the domestic education sector.   Perhaps most disgracefully, given Abu Dhabi's vast riches, the illiteracy rate in the UAE was over 22 percent in 2003, and currently still stands at between 10 and 16 percent.  

Incredibly, part of the problem has been a lack of funding. Although the federal budget allocation for education has now exceeded 2 billion US dollars, this is only a third of the allocation for military expenditure and, in percentage terms, is about a quarter of the educational expenditure of some other Arab states. This has led to per student financial support declining by over 20 percent since 2000, which has meant that some institutions have had to turn away students due to lack of funding in order to maintain the quality of their programs. Understandably, the national population has responded by sending their children to private sector institutions for all stages of their education, and it is now thought that over 40 percent of national students are in the private sector. The federal ministries for education and higher education, in addition to the education-related emirate-level government departments have complained that they have little authority to regulate outside of the public sector. Although the situation in Abu Dhabi is less grave than in Dubai, where many of the private sector institutions effectively exist in free zones, it is nonetheless proving difficult to maintain standards and form a coherent strategy. There is also a chronic shortage of Emirati staff in the education sector, thus denying young nationals indigenous role models. Education has traditionally been viewed as a low status profession, and this has resulted in very small numbers of nationals – especially males – training as teachers or lecturers. Even high quality expatriate staff are becoming difficult to recruit, as salaries have remained stagnant for many years, prompting many veteran educators to move to Qatar, Kuwait and other parts of the Gulf that are offering vastly superior compensation packages.

Reform s now under way

Nonetheless there is some hope, with every indication being that the government is now seriously committed to reforming the sector. A number of new initiatives are in place, and these may soon have a significant impact. At the secondary level the Abu Dhabi Education Council has put into action a public-private partnership agreement for the management of public schools.   With cooperation from the Singapore National Institute for Education this should lead to firmer controls over the qualifications of educators, especially college principals – who must now possess a degree in education – and struggling teachers, who will now have access to a mentor. An accreditation system will also soon be applied in an effort to bring public schools up to international standards. New curricula will be introduced with an emphasis on critical thinking rather than rote learning, and with more weight being placed on English language instruction. Combined, it is hoped that these curricular developments will better prepare students for the expectations of the tertiary sector. By 2012 all schools will have to comply with the new requirements, and private schools will face closure, unless they have independently sought accreditation from a reputable international body.

The tertiary sector is set for a similarly comprehensive overhaul, with a number of major projects involving esteemed regional and international partners already in the pipeline. Crucially, these projects do not aim simply to build lavish new campuses and physical infrastructure for higher education in Abu Dhabi, but also seek to improve standards and expectations. The new Khalifa University of Science, Technology and Research will enter into an industrial partnership with Abu Dhabi National Bank. The latter will advise on employer demands and provide nearly seven million US dollars of research funding. As part of a reciprocal agreement the new Sheikh Muhammad bin Zayed University Scholars Programme will competitively select students from the Abu Dhabi's two public universities and then send them to New York University or other international partner institutions. Equally important, however, is the coordination of these many projects, as Abu Dhabi seeks to connect together all of the new universities, research centres, and think tanks. It is hoped that a new National Authority for Scientific Research will provide the solution: backed by the federal ministry for higher education and supplied with an annual budget of nearly 30 million US dollars, it will host committees of leading academics that will apply quality control to national research output and help determine future research trajectories.