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200,000 jobs required in the next 6 years

ABU DHABI - The UAE, which achieved a high jobs growth rate between 1995 and 2000 when over 450,000 jobs were created for nationals, needs to create about 200,000 more jobs during the next six years to tackle the rising unemployment problem.

"The AGCC countries must focus on implementing policy reforms to accelerate non-oil growth and create employment opportunities for a rapidly increasing labour force in a sustained fashion, while reducing the vulnerability to oil price shocks," said Dr Samir Radwan, an internationally known labour economist, in his paper on "the need for a national labour force that supports business and industry in the AGCC region.

He was speaking at a two-day conference on "Building a dynamic new prosperity in the Gulf region through global cooperation: Opportunities and Challenges" organised by the Zayed University in association with the Abu Dhabi Chamber of Commerce and Industry (ADCCI).

In order to lessen unemployment, Dr Samir said that the AGCC countries have to create at least 3.2 million jobs to absorb the growing labour force by the year 2010. "This estimate includes only nationals and does not reflect the demand for labour exerted by the new migrants to the growing Gulf region.

"If labour force growth rate remains at the same level, activity rate will increase from 61.5 to 76.5 per cent within the next six years", he added.

Dr Samir disclosed that another half a million people would enter the working age population in the next10 years in the selected AGCC countries including UAE, Oman, Saudi Arabia and Kuwait and, according to projections, the labour force would also increase by about 3.2 million in the region.

He said that there were some of the constraints that hampered the national work force from entering the labour market like the use of foreign expertise, the quality of labour and a higher education system that does not respond to the market needs.

"The low number of graduates, both researchers and technicians in science and technology, was also undercutting efforts to build a balanced human capacity in the field of science and technology," he said.

He urged the need for establishing a Human Resource Fund (HRD) at the AGCC level as a collective approach to addressing the sitution, instead of subsidising services in this regard at the national level.

The financial resources, he pointed out, must be diverted to the creation of a labour force, the promotion of small ventures that could absorb new entrants into the job market. He said that there was a need to hire nationals through the creation of incentives, subsidies and minimum nationals quota limitations.

Speaking on how to increase the share of nationals in the labour market, Dr Samir said that besides job reservation in the armed forces, police and the civil service, there was a dire need to encourage entrepreneurship, especially among new graduates who would like to establishing large or small enterprises.

He suggested the need for bridging the renumeration gap between the public and private sector workers while taking measures against evasion and illegal recruitment and increasing the cost of hiring foreign labour taking into account the elasticity of the demand for labour.

Giving demographic trends in the AGCC region, he said region total population in 2001 counted for 31.9 million with the nationals in 1995 numbered about 7.5 million, 80 per cent of whom are Saudis. During the next 30-years, the UN projects the population to nearly double reaching to 52.5 million mark, he said.

In the AGCC states, nationals represented 26.4 per cent of the total manpower in 1995, nationals represented 40 per cent in Bahrain, 16.6 percent in Kuwait, 17.9 per cent in Oman, 36.5 per cent in Saudi Arabia, and 11.6 per cent in the UAE.

Learning from mistakes

Former prime minister of Ireland John Bruton speaking on: "The Ireland as a world class example of economic development and sustained growth", said Irish made all the mistakes they could but eventually we learned something from them.

About mistakes committed there, he said protectionist economic policies and restriction on foreign investment till 60s and excessive government borrowing during 80s resulting in hampering the economic growth. But, huge investment in telecommunications, shift in world economic development towards high value products like IT and pharmaceuticals boost the economy.