UAE spends big to boost private sector workforce

The United Arab Emirates launched a lavish program last Sunday to encourage its citizens to work in the private sector.

The program, which will start Oct. 1, is the second of a broader plan called "Projects of the 50," being announced throughout October to boost the Gulf state’s economic development for the next 50 years.

The program allocates 24 billion dirhams ($6.5 billion) to train citizens to join private companies or to launch their own projects, according to UAE news agency Wam.

The first set of “Projects of the 50,” announced Sept. 5, includes incentives to attract foreign investment and two new types of visas for living and working in the UAE: Green for experts, investors and businesspeople, and Freelance for people who are working independently.

The Nafis (Compete) program, which will be managed by the newly created Emirati Talent Competitiveness Council, aims to create 75,000 jobs in the private sector over five years through 13 initiatives and projects.

It subsides citizens' salaries who work in the private sector for five years, as well as financial incentives for their children, to encourage them to stay in the private sector or to retire and start their own businesses.

UAE economist Najeeb Al-Shamsi told Al-Monitor that the step is good, but that it was supposed to be implemented years ago.

The plan for empowering UAE nationals dates back to 2010, when Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, announced UAE Vision 2021, but these incentives are the first to be offered to citizens.

Through the new program, Emiratis in specialized fields, including nurses, accountants, financial auditors, lawyers, financial analysts, and programmers, can get monthly financial support of 5,000 dirhams ($1,360) for five years. An AED1 billion Graduate Fund will give grants to students and new graduates to encourage them to start startups and take roles in the private sector.

The project also sets a target for UAE nationals in the private sector workforce, starting with 2% this year and rising to 10% in five years.

Remittances that expatriates send to their home nations have been depleting the UAE's resources for decades, and hiring qualified Emiratis for these jobs "brings great economic benefit to the country.” Al-Shamsi said, adding that the COVID-19 crisis revealed the importance of self-reliance. Qualifying national cadres to take roles in the banking and insurance sector and others has become an urgent necessity, he said.

The total population of the UAE is nearly 9.9 million, but only around 1 million are nationals. The Gulf Labour Markets and Migration study estimates that most of the workforce comes from Asia and especially from India.

The unemployment rate in 2020 was about 5% of the total workforce, according to World Bank data. But Al-Shamsi pointed out that the unemployment rate is higher among citizens than expatriate workers. The government should push the private sector to increase the number of UAE citizens among its employees, he said,  as other Gulf countries have done.

However, many UAE nationals refuse to work in the private sector, noting poor salaries and long working hours compared to the government sector. They also believe that the private sector prefers Europeans and other expatriates in higher positions. With the new program's incentives, "the excuses by some nationals will disappear,” Mariam Al-Jneibi, a UAE entrepreneur, told Al-Monitor.   

Unlike many Emiratis, Al-Jneibi, who has her own business, never wanted to do routine work in a government job.  

She believes that the private sector is leading development, offering great opportunities for young people to expand their knowledge and skills. She added that the new rewards and benefits will convince many nationals to change their opinion.

 “Our country knows that its nationals are the pillars of the development," she said, "so it invests in them to reap the fruits in the future."