Discussion and debate about Emiratisation has been raging for as long as the policy has been in place, with what seems like little consensus on the main issues.
This usually indicates that there are underlying issues that are not being addressed. This article aims to unravel the deadlock by supplying innovative views and addressing some of the more controversial issues.
At the heart of the arguments against Emiratisation, or possibly excuses for its lack of implementation, is that Emiratis do not have the skills or work ethic to be hired. The racism and unbelievable arrogance of such a position is breathtaking and points to why this particular issue is discussed only in hushed tones.
First, Emiratisation is government policy enacted into law and this takes precedence over any commercial, personal or other excuse that anyone may have. Second, to prove such a statement true one would have to show that every single Emirati lacks skills. To prove this statement false all one has to do is demonstrate a single Emirati with, say, an Ivy League or equivalent education and top-notch experience who has never been interviewed, let alone recruited under an Emiratisation programme. There are many such Emiratis, and the racist excuse is therefore clearly false.
Understanding how and why Emiratisation exists as a policy is made clearer when it is compared with employment regulation in other countries. The basic tenet globally is that first the local citizens are hired and then foreigners may be hired. Simply put, it starts with 100 per cent citizen employment, which may drop if non-citizens are hired.
The UAE has adopted the opposite position: hire whoever you want, but increase your percentage of Emirati employees. In other words, start with 0 per cent nationalisation and go up. The UAE’s more lenient approach to ensuring the participation of its citizens in the economy should not be abused to exclude Emiratis for any reason.
As already highlighted, commercial issues are irrelevant when faced with legal requirements. Incredibly, the commercial issues raised are invalid, although it is not clear if this is due to an incompetent analysis of Emiratisation policy or it is outright dishonesty meant to confuse the issue.
The basic premise of this spurious premise is that there is a cost to hiring Emiratis because of higher compensation expectations or lower productivity. The higher compensation argument holds no weight anywhere in the world – human capital usually cannot legally be imported just because it is cheaper. The lower productivity, if it exists, can and should be remedied with training.
Finally, these so-called costs must be weighed against the benefits that the UAE Government provides in terms of its 0 per cent corporate income tax, 0 per cent personal income tax, which decreases human resources costs for companies, and massive continual infrastructure spending, which makes the UAE one of the most attractive business centres globally. The Government should consider applying a 15 per cent corporate income tax on any company in breach of its Emiratisation targets as well as applying a 15 per cent personal income tax on the senior executive of such companies.
The business culture’s behaviour towards Emiratisation has become adversarial, unethical and quite possibly illegal, and this trend needs to be reversed. A basic example is the manner in which some companies circumvent Emiratisation by using separate “manpower” companies.
By hiding a high number of expatriates in these shadow companies, these unscrupulous companies manipulate their Emiratisation ratios. This not only harms Emiratis, but it has an impact on the careers of the employees hired in the shadow company.
For any company claiming to adhere to corporate social responsibility principles, this behaviour certainly falls short. Frankly, it harms the company itself, as any company willing to be deceitful with the Government is more likely to be deceitful with its customers and clients.
In terms of the various methods that the Government can incentivise a reluctant business to adhere to the law, revoking their commercial licence is such a big step that it is not practicable, at least not as a first step. In addition to taxing the business and its executives the government might consider creating a blacklist. It could also deny government business to any non-compliant employer: no tenders, no requisitions, no purchases, no deposits. Vigorous pursuit and the closure of shadow companies, with the consideration of criminal charges for senior officers involved could also be helpful.
Sabah Al Binali, an Emirati, holds a bachelor's degree from Princeton University, and a master's degree and doctorate from Columbia University. He was the youngest treasurer of any commercial bank in the UAE and was formerly the chief executive of Saffar Capital. He has never been recruited by any company in the UAE.
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