The Contribution of Expatriates to the UAE and the Impact on Recent Changes in the UAE Workforce - Assignment Example

Student’s Name Your Instructor’s name The Course 14 January 2012 Part A Discuss the contribution of expatriates to the UAE and the impact on recent changes in the UAE workforce. A bigger number of UAE residents is made up of expatriates outsourced from outside countries. These workers have different customs and ethnic back grounds from USA, India, Indonesia, Australia and Philippines (Al-Jenaibi 2). They together make an approximate number of 15-20 million expatriates employed in UAE. Together, all expatriates in their various areas of participation make a lasting contribution that cannot be ignored. Through their services, the emirates have been able to realize its dreams since the expatriate’s contribution has been sacrificial. It is important to note that some expatriates have been involved in illegal activities (Kechichian 1). Due to that, UAE has had to come up with changes that affected workforce to avoid further exposure. Major changes were meant to affect the employee capacity in the private companies with the specifications being that the biggest percentage of the employees should be UAE nationals (Embassy of India 2). This was meant to avoid losses of revenue where it was believed that foreign expatriates siphon big chunks of money out of UAE (Kechichian 1). Among the many changes, issues of nationality, sponsorship transfer policy, immigration, labor insurance policy, health insurance cover, penalties on absconders and trade have been affected (Embassy of India 1). Majority of expatriates are considered to be replaced with UAE nationals in private sectors. This is a big blow to the foreign expatriates since renewal of work permits are restricted to one year only (Embassy of India 3). What positive impact does workforce make on the UAE labor force? With the pull of expatriates from all over, UAE has been able to get the best in terms of skills and expertise. Their hard work while looking for wages at the same time has added great value to production hence affecting the labor force positively (Kechichian 1). In most cases, even before the setting up of labor laws, foreign workers train the indigenous people on various skills that are essential for continued productivity. Through that the region has been getting lasting impact in the labor force that is essential for continued economic growth. What impact does it make on productivity? With expatriates contributing to the highest number in population, UAE productivity has been increasing every day. Their tireless dedication and commitment despite working in harsh conditions has seen the emirates grow to where it is (Kechichian 1). Private sector has been able to meet the market demands for their products hence being able to contribute a large share in the economy. From real estate’s to tourism, from agriculture to manufacturing industry, quality production of goods and services has been increased. Discuss e-commerce/e-government and its positive potential impact on the UAE economy. With the increase in financial activities, need for communication has been created in UAE. Telecommunication and IT has come in handy to enhance business to the global market. Buying and selling of goods and services has been made easier since with e-commerce, a client and a service provider are just a click away. It is estimated that 8 out of 10 internet users whose needs are satisfied online come from UAE (Khaleej Times 1). Through various testimonies received concerning e-commerce/e- government convenience, value and security of transaction, UAE has been recorded to be the busiest in the region. The implication has been availability of goods and services from both private and public sectors to everybody at low costs (Khaleej Times 1). Through e-commerce, sales in 2010 were estimated to have had an approximate growth of 55-60% (Elbadawi 1). This reflects a relative growth in the economy. Is e-government becoming more important now and what operating cost does it reduce? To meet the global market and the need for UAE’s ever growing population, e-commerce and e-government is proving to be important by each day. Citizens are able to keep in tune with the government developments without necessarily visiting the government offices. Through government websites, citizens are able to know UAE’s organizational structure hence establishing compliance the law. E-government has come with reduced operating cost to both the government and the citizens. Operation expenditure is low as compared to when everything was manual. Synergies have been trapped through offering efficient and better focused services to all (Elbadawi 1). This has proved to be cost saving especially in telecom infrastructure that needed so much space and personnel to operate. With e-government, employees are easily reached online which saves transport cost on taking information to the employees. Workers are able to access any type of information that is essential for knowledge and education in their fields of operation. Part B Workforce in UAE An analysis of UAE workforce on important macroeconomic indicators Expatriates make the majority of UAE workforce. They are distributed in all sectors of the economy with private sector taking 90% of the total expertise. Considering the indigenous nationals of the UAE, expertise has been outsourced to make the workforce bigger (IMF 27). Through their hard work, UAE has secured a position among the most competitive economies in the globe hence making it acquire the title of the most stable macroeconomic environment (Deloitte 6). These awards have been obtained by looking at macroeconomic indicators like increased GDP, fiscal indicators that are favorable to all people and consumer and lending rates. Through them macroeconomic stands have been established and therefore attracting a big number of workforce. How does Workforce contribute to the GDP? Since the workforce stands as the backbone of UAE economic growth, the results have been tremendous. The commitment in the labor market is commendable and adds positively to the GDP of the emirates. The recorded GDP surplus in between 2002 and 2006 was 144%, meaning 25% increase every year. According to the report given by Deloitte (3), through Saudi Arabia alone, workforce has been able to contribute 55% of the total GCC GDP. The forecast on GDP growth in between 2009 and 2013 is an average of 5.1% per year, this is only achievable if performance remains positive through the workforce. Does workforce affect the aggregate supply parameters of Technology, labor, physical capital, Human capital and natural resources? An increase in population calls for an increase in all amenities. Workforce increase in UAE came with demand for established communication, availability of tools and demand for services. Through them, technology had to come in and with the government support, it has been established. The emirates have been rated the best in technology supply with the opening of Dubai internet city that is satisfying the high demand for internet and technology. Many companies and organization in UAE could be closed by now if labor was not outsourced. With the increase in workforce, the ministry of labor has been able to meet the increasing demand for labor to both the public and private institutions. This is a positive move since the human capital is able to meet the deficit UAE has had before opening up to diversified workforce. Opening for many industries in UAE called for numerous supply of labor. With the availability of workforce, there was need for equipments and machines to be availed for continued production. This is one of the reasons why UAE records using more that 25% of the world best equipments hence satisfying physical capital demand. The majority of the equipments are used in construction industry especially in Dubai. With such a high supply in physical capital, productivity has been enhanced, the reason for GDP growth in the construction and manufacturing industries. Increase in human capital has been a key feature in the depletion of the available natural resources. The expectation is by 2015, UAE economy will have to be independent of oil as a commodity. This could not have ended so soon if the human capital through workforce had not increased to the level where it is now. Does workforce impact on investment which is the driver for growth in any nation? Majority of people in the UAE workforce are not indigenous. Most of them after seeing investment opportunities in UAE have resolved to invest there. With a continued positive attitude by UAE government, investments have continued to be established in the private sectors (Deloitte 4). This has been made possible since some of the expatriates have been involved in investments even as they refer others in doing the same. Availability of labor has been one of the driving forces to investing in UAE. Majority of investors apart from them that will come with their own workers have had it as strength in considering UAE as a potential place to invest. Through workforce, investor ambitions have been met hence the reason for the economy flourishing. How much does workforce impact on the employment in the UAE for all UAE residents and nationals in specific. UAE residence is made up of both expatriates from outside UAE and nationals. Availability of labor through enhanced workforce has come in handy in providing services from domestic to industrial sectors (Kechichian 1). Through them being there, employers needs for employees have been met plus they have participated in creating employment opportunities in domestic and education for their children. Nationals who initially may not have had competitive skills for the job market have greatly benefited. The foreign workforce availability created training opportunity that has seen to it that 26,000 annual unemployment rate among nationals reduce (Embassy of India 2). This is a positive move towards establishing a reliable and efficient workforce that will fill the employment gap long after foreign workers have left UAE. Does workforce impact on the money supply, does the UAE monetary policy impact workforce? Deloitte’s report brings out market- based monetary policy as one of UAE strengths (Deloitte 11). Workforce being part of the market, their impact has been felt through their participation in the money market (2). Their contribution in production has led to money supply especially in oil and gas industry. The revenue they receive have had an effect in foreign remittance as they send money abroad for investment and support of family members (Kechichian 1). Does UAE fiscal policy affect workforce? With reduced taxes on many things and the availability of working permits, workforce has been attracted from all over the globe. Fiscal indicators that have largely been affected by the workforce are in government revenue, expenditure, balances and debts recovery (Deloitte 4). Through the policy, many people prefer working for UAE than any other place. With UAE, the government assures every worker a better life since so much has been subsidized in terms of taxes. Does Workforce influence the overall trade balance of the UAE? Overall trade balance in UAE depends on many factors where productivity is one of them. With an established and reliable workforce, UAE has been able to meet the market demands. Market satisfaction has enhanced growth in trade, the reason why countries like America have trade agreements with UAE. This has led to trade surplus than what UAE could have achieved alone (LCWEB 12). Works Cited Al-Jenaibi, Badreya. “The Scope and Impact of Workplace Diversity in the United Arab Emirates- An Initial Study”. Hologramatica 15. V3 (2011): Pp. 3-34. Web. Deloitte. GCC powers of construction. < http://www.deloitte.com/assets/Dcom-Lebanon/Local%20Assets/Documents/Real%20Estate/me_re_gccfactsheet_0909.pdf > Elbadawi, Ibrahim. Citizen Trust in Online Payment of Government Services in UAE: The Numbers and Beyond. Word Press, Dec 26, 2011. Web. 14 Jan 2011. Embassy of India. Update on Changes in UAE labor Law & other related developments. < http://www.norkaroots.net/Forms/UAELabourLaws.pdf > Hassanain, K. “Monetary Controls in the UAE”. Middle Eastern Finance and Economics: EuroJournals Publishing, Inc. 1. (2007): 36-41. Web. 14 Jan 2012. IMF. United Arab Emirates: Staff Report for the 2009 Article IV Consultation. IMF Country Report No. 10/42. February 2010.Washington, DC: International Monetary Fund Publication Services. 1-67. Kechichian, Joseph, A. Expatriates Make Lasting Contribution to Gulf States. Gulf News, June 30, 2003. Web. 14 Jan 2012. Khaleej Times. “E- commerce clicks in the UAE.” Khaleejtimes online 18 August 2010. Web. Lcweb. Country Profile: united Arab Emirates (UAE). Library of Congress, July 2007. Web. 14 Jan 2012. Read More