Emerging economies go through the same cycle. The first step is the export of products or commodities that are relatively cheap or are native to the exporting community. For examples of emerging economies exporting products, simply look at the history of nearly any country in South East Asia. As for commodities-based economies, the UAE is a perfect example.
This in turn triggers foreign direct investment (FDI), allowing for infrastructure investments that help to improve the production capacity and efficiency of the emerging market. These upgrades will usually require the need to upgrade technology as well as processes and procedures. To that end, operating expertise in the form of foreign advisers and managers is imported to improve the training of the local population to manage these changes.
The result is a virtuous cycle in the emerging economy of an improving workforce that becomes more efficient in its production, which in turn spurs further FDI and the cycle continues.
Unfortunately we have not seen the same dynamic in the UAE. The first difference is the size of the commodity reserves relative to the population, which has allowed the economy to grow far faster than the production capacity of the local population. This in turn has led to policy decisions making the UAE one of the most liberal labour importers in the world. The end result is a quality of living for both citizens and expats of the UAE that is far greater than anywhere else in the world. Admittedly, and sadly, there is room for improvement at the bottom of the economic classes, but that is for another article.
Although the current business regulatory environment provides for a fast-growing economy, it creates an environment that is hostile to UAE employees relative to their counterparts in other countries – all of which have far less liberal labour importing regulations. The reactions from stakeholders range from the perception that government policy is impossible to implement all the way to complete disregard by businesses of government policy.
In this article I would like to provide yet another idea that could complement those already proposed. The idea is to use private sector-style incentives that could be incorporated into policy to provide long-lasting and sustainable solutions.
Simply put, the idea is to turn Emiratis into expats. This is not a new idea. Adnoc is well known for sending its employees for long stints to work with their partners such as Technip in France. Such an approach retains the benefits of working with world-class people but removes the fear that the Emirati is being trained to take over the job of the foreigner.
It would be even better for Emiratis to find these jobs independently, even if supported by a centralised service such as the Abu Dhabi Tawteen Council. The experience gained in such an environment would be invaluable not only to the individual but also to the UAE’s economy. It would be an added channel through which the UAE could import more operational expertise.
Launching such an effort would not be new. The UAE’s military has been training and executing combat missions both in the air and on the ground with the United States military for over a decade. The success in building operational expertise in members of the UAE’s Armed Forces is made clear in the reporting of the joint missions by these two countries.
If this channel has been found useful to transfer operational expertise to Emiratis in such a sensitive field, does it not make sense to expand into other fields? Doctors encouraged to spend five years or more abroad so that they may absorb global best practice in the medical field and transfer it back to the UAE? Engineers? Bankers?
The last piece of the puzzle is how to incentivise Emiratis to spend such long periods of time away from home. No doubt they will all feel a sense of patriotism and that will go a long way, but is it enough? Probably not and to close the gap one would have to build on this patriotism.
This brings us back to the idea of strengthening the Emiratisation programme, especially with regards to Emiratis who spend long periods of time acquiring operating knowledge abroad and are, therefore, of high value to the economy when they repatriate back to the UAE.
This is the only way to create a sustainable economy, as the current approach of allowing expats to take jobs with no solution for Emiratis other than government employment will end up with the two-class system that expats are afraid of … but it will be the Emiratis at the bottom.
Besides, if Emiratis get a taste of what it is to be an expat for many years then they will have a stronger sense of empathy for the expats at home and, hopefully, not only the arguments about Emiratisation can evolve into discussions but societal integration will also increase.
Sabah Al Binali is an active investor and entrepreneurial leader with a track record of financing, building and growing companies in the Mena region. You can read more of his thoughts at al-binali.com
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