In a meeting of the Federal National Council last week, members called on the Government to create more jobs for Emiratis. Citing the relatively high unemployment rate, which is at 15 per cent of the citizen workforce according to the Ministry of Economy, one can understand the call for action.
To put this unemployment rate in perspective, the rates in both the United States and the United Kingdom are officially about 8 per cent, just over half of the UAE's. One wonders how two countries that are going through tough economic times maintain higher levels of employment than the UAE economy, which is in full development mode. And to add fuel to the fire, Emiratis are a minority of the population, but even a smaller minority in the labour market.
There is a need for immediate action to tackle unemployment, but the argument that Government is responsible for job creation is a quick, and somewhat weak, solution. A better approach would be to focus on long-term stability in both employment and human-capital development.
An apt metaphor is a Band-Aid applied to a wound that requires stitches. It might hide the problem, but it won't heal the wound.
There are several points of focus that I believe could tackle both current unemployment and, more importantly, the underlying issues that contribute to unemployment.
The jobless rate comes down to a basic disconnect between human-capital development and the needs of the economy. Our country is dealing with rising secondary-school dropout rates (25 per cent among Emirati males), a stagnant higher-education system, and a lack of mentorship and professional insight.
In parallel, the national economy continues to expand into some of the most knowledge-intensive sectors in the world: renewable-energy technology, aerospace and health care. The natural outcome is that skills do not always match the jobs available.
There needs to be a bridge between education and industry. Every day that passes, the chasm deepens with social problems as a result.
A committee at the federal level should be set up. Leaders from industry and education need to identify top-tier programmes and institutions that could provide the education and technical skills to ensure that no more young people slip through the cracks.
The private sector has to be part of the solution. The Minister of Education points out that only 7 per cent of Emiratis work in the private sector. Government entities and Emiratisation offices need to bring private-sector companies to the table to figure out the best employment model to include Emiratis in their workforces.
But there is no point beating around the bush. Although the private sector offers some of the best learning opportunities, the compensation is not nearly as attractive as government jobs offer. Some companies offer a university graduate about a quarter of what she would receive in the public sector.
Last, but certainly not least, is the type of employment being created. The same report by the Minister of Education stated that 94 per cent of administration jobs in the ministries are held by Emiratis. How many more of these jobs can the Government create?
The Government has been the main driving force in creating new entities in various sectors, offering thousands of employment opportunities. Just think how many new government-related entities have been set up in the last 10 years.
The jobs are there, and Emiratis are given priority in almost every public-sector job. Now we need to ensure that Emiratis are equipped to handle the types of jobs that are coming onto the market.
The UAE is at a crossroads in its economic diversification in ever-more ambitious sectors. Perhaps we need to flip the debate on its head: instead of more jobs for Emiratis, how about we create more Emiratis for jobs?
Khalid Al Ameri is a social columnist and blogger based in Abu Dhabi
On Twitter: @KhalidAlAmeri
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
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Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital