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Long-running efforts to impose Emiratisation quotas on private companies could eventually be scrapped, and the Government will offer subsidies to companies to encourage them to hire and keep Emirati staff, the head of Abu Dhabi’s Emiratisation efforts said.

 

Abdullah al Darmaki, the general manager of the Abu Dhabi Tawteen Council (ADTC) did not give a timeline for the phasing out of the quota system, but suggested it would happen as more Emiratis become qualified enough to enter the private sector. The subsidies would start immediately, he said, adding that companies would use the money to train their Emirati employees and help them gain a foothold in the private sector.

 

The funds would also allow the companies to match the salaries offered by the public sector.

 

Currently, private companies in certain sectors are obliged to employ a minimum number of Emiratis.

 

The authorities hope that some of the measures proposed at the forum will reduce the Emirati unemployment rate, which has reached 14 per cent in Abu Dhabi and is higher among women and in rural areas. They also want to address educational concerns. As many as 35 per cent of prospective employees in the ADTC’s database only have primary school education or less, and almost 80 per cent have no university qualifications.

 

January 26, 2010

 

 

Analysis and Forecast: Decreasing Risk

 

The move to scrap the rule that obliges large private companies to employ local Emaratis in their workforce is an important step towards creating a more competitive private sector. Despite the law, currently private companies find it difficult to employ local Emaratis as they often need to compete against very high pay rates they receive from government jobs. The private sector has regularly warned that the current law leads to two-tier pay rates within companies, and erodes competition, efficiency and transparency. Scarping the law is therefore an important positive step for the private sector.

 

It does however need to come with incentives to lure local Emaratis to join the private sector on a competitive basis. This will be a difficult task as it will inevitably need limiting state subsidies and assistance given to Emaratis. There will also be problems due to the different economic positions of the various emirates. In addition, an overhaul of the local educational system is needed to ensure long-term employment prospects for local Emaratis is created and maintained.