ASSESSMENTS

Why the UAE's Short-Term Labor Fix Will Create Long-Term Problems

Feb 1, 2019 | 14:57 GMT

Dubai is a center of development and employment in the United Arab Emirates

A general view of new extension of Dubai Canal on Oct. 29, 2016 in Dubai, United Arab Emirates.

(TOM DULAT/Getty Images)

Highlights

A confluence of factors has slowed the United Arab Emirates' ability to attract and retain the number of temporary foreign workers it once did, dampening the country's ability to offset its slowing economy. 
Recent reforms introduced by Abu Dhabi will be met with pushback from the country's minority native population — risking further divisions between richer southern emirates and the more oil-deprived northern ones. 
In the shorter term, this will lead the government to consider rolling back these reforms and extend economic subsidies and cultural privileges to protect Emirati citizens' elevated social status.  
In the longer term, rising divisions among north-south lines could lead to a restructuring of the country's political system, threatening its traditionally stable and business-friendly reputation.

The flow of foreign labor into the United Arab Emirates is drying up, leaving the country's leaders to grapple with a tricky balancing act: How to attract and retain enough workers from abroad to keep its economy humming without alienating its own citizens. As it looks to bolster its labor market, Abu Dhabi has instituted a range of stimulus plans, visa reforms and business law changes over the past year. But those solutions risk upsetting Emirati natives, who see extended-stay expatriates as a threat to their way of life and elevated social status. Their discomfort opens the door for a historic shift in the country's generally stable political system....

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