The role of foreign labor in the development of the United Arab Emirates

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(1)INSTITUTO TECNOLÓGICO Y DE ESTUDIOS SUPERIORES DE MONTERREY ESCUELA DE GRADUADOS EN ADMINISTRACIÓN PÚBLICA Y POLÍTICA PÚBLICA, CAMPUS CIUDAD DE MÉXICO. THE ROLE OF FORE'IGN LABOR IN THE DEVELOPMENT OF THE UNITED ARAB EMIRATES. 1:..: 0. it-~-f-!'./~:'-·i-f\P-.~-:.:-::. -.'.-._1-~1,1-:,:,·,;¡. Gloria Lorcna González Villarreal. Proyecto de Investigación Aplicada Maestría en Derecho Internacional/Masters in International Law Asesor: Dra. Karen Sigmon. . TECl\tOLÓGICO DE N!ONTíRREY. May 2008.

(2) INDEX. Thcsis Objcctivcs. lntroduction. 4. l. Ovcrvicw and History of thc Unitcd Arab Emiratcs. 6. 11. Economic Devclopmcnt in thc UAE. JO. 111. lmmigration of Forcign Labor into the UAE. 18. 3.1 Federal Law No. 8: Regulations of Labor Rclations and its Amendments. 23. 3.2 The Sponsorship Systcm and thc lssuing of Work Visas. 27. 3.3 The role of Expatriatcs and skillcd labor. 30. 3.4 Unskillcd labor and illcgal immigration. 32. 3.5 Cultural Assimilation bctwccn the forcign work force a11CI thc local UAE society. 36. 3.6 Foreign labor force in the Dcvclopment of thc UAE. 37. 3.7 UAE Participation in intcrnational labor-oricntcd mcchanisms. 40. IV. Conclusions. 44. Bibliography. 49. Anncx. 52. 2.

(3) THESIS OBJECTIVES:. Thc primary objcctivc of this work is to dcpict thc immigration phcnomenon of foreign labor that has takcn place over the last decades in the United Arab Emirates. First, it will explain how these expatriate workcrs have contributcd, sincc the country's independence, to the development of thc region.. Sccondly, this work will present the diversc measurcs the local govemrncnt has implemented in favor of the immigrant workers, in hopes that thcy serve asan example for othcr countries with high immigrant rates. Also, it will point out thc many challcngcs the UAE govcrnment still faces to protect ali foreign workers whether they are skilled or unskillcd, through effcctivc and internationally standardizcd labor laws.. Finally, this documcnt will portray how forcign labor has been vital to the dcvclopment and curren! cconomic growth of thc United Arab Emirates and thc manncr in which workers from other parts of the world will continue to be the driving force bchind the country's growth in the future.. 3.

(4) INTRODUCTION. We are currently living in a very distinctive ami urnque period of time, in whieh globalization is a phenomenon present in ali aspects of every person 's lives. It seems lo be the common denominator in economics, politics, social ami cultural exchange and subsequently in human mobility. Globalization has accelerated the pace of intemational migration of workers and created labor shortages in both the developed and developing countries. Thus sorne governments have responded by relaxing restrictions on immigration and work permit rules which have made it easier for individuals to transcend states, borders ami countries in search of an overall betterment; especially when the desirc of improving their lives and those of thcir families is at stakc.. lmmigration of forcign workers is nol something new. Evcr since man had thc knowlcdgc and means to migrate, a natural impulse to joumey where further opportunities are availablc has taken over with no surprise. A lso, traditionally poverty had been associatcd with specific groups unable to participate in lhe local labor markets, namely peoplc of age, disabled, or fcmalcs. 1-Iowever, within the last decades, a ncw group of poor pcoplc has emerged, those unablc to find gainfol employment to support themselves and their familics, and who have just enough means lo venturc out to other countries by whatevcr means possible.. When we normally think of legal or illegal immigration we tend to rhink of those regions of thc world which are undoubtedly more publicized or familiar, like thc movcments that occur bctween citizens frorn Latin-Arnerica to thc United States, from Eastem to Western Europe, or from A frica to countries likc Spain and France. However, since the mid 1980' s an enormous intlux of rnigrant workers has taken place in the Persian Gul[ reg1on, specifically to thc United Arab Emiratcs. In this dccadc, the govcrnment started dcveloprncnt programs which made evident that one of the basic resourccs requircd to irnplernent them was manpower, and that it was in short supply in the countI)'. Thus,. 4.

(5) dcpendencc on foreign labor was inevitable. This growth and thc imrneasurablc dcvcloprncnt of thc two main Emirates, the capital Abu Dhabi and the ncw world hub of Dubai, has depended alrnost cntirely on thc local forcign work force that cxpands into cvcry sector of society and that has made such emergcncc possiblc.. Thc devclopment in ali aspects ofthe cconomy and socicty has without a doubt contributcd to the attraction and mobility of workers to thc rcgion, especially frorn arcas that are in rclativc gcographic proximity to the Arabian Gulf and which were historically linkcd, like the Indian Subcontincnt, East Asian locations and Arab speaking countries in Africa. Thus, since what was bcen achicvcd in the Emirates in the last fcw ycars in tcrms of conslruction, infrastruclurc, econornic growth and ovcrall developmcnt is largcly duc to foreign cxpatriatc labor; thc governmcnt has been faced with the rcsponsibility of claborating, reforrning and irnplementing a series of immigration mcasures to cnsure thc ideal managcmcnt of these workcrs, which currcntly represen! more than 73 pcr cent of thc total . 1 popu lat1on.. 1. hllps://www.cia.gov/libral)'/publications/thc-worlcl-factbook/gcos/ac.html (date lasl consultcd April 25,. 2008). 5.

(6) l. OVERVIEW ANO HISTORY OF THE UNITED ARAB EMIRATES. The Unitcd Arab Emiratcs (UAE) are a federal union which consist of scven cmirates: Abu Dhabi, 'Ajman, Al Fujayrah, Ash Shariqah (Sharjab), Dubai and Umm al Qaywayn, unitcd on Dcccmber 2, 1971, with Ra's al Khaymah joining a ycar latcr aftcr gaining its indcpcndcncc from thc Unitcd Kingdom.. Thc UAE is locatcd on thc Arabian Península along thc Arabian Gulf and thc Gulf of Ornan, it bordcrs Saudí Arabia ami thc Sultanate of Ornan (see Anex /) eomprising an arca of 83,600 squarc kilomctcrs, with an olticial population as of July 2007 of 4,444,011 peoplc. 2. Abu Dhabi is thc capital of thc UAE, thc largest emiratc comprising of 80% of thc land arca and has the bulk of oil rcscrves. 1 Dubai is thc second largcst Emiratc in arca ami population and it is without a doubt the most international of thc Emiratcs with cmerging skyscrapers, a growing cxpatriate community and an cconomy cver so more dircctcd towards attracting elite tourism. Sharjah is thc third Emiratc in sizc and population ami it 's an importan! commcrcial arca duc to its ports along thc Arabian Gulfand the GulfofOman, and bccause it's an agricultura! and cultural ccntcr. Thc strong point of thc fourth Emiratc in sizc, Ra's al Khaymah is agricullurc, and thc rcst of thc Emiratcs 'Ajman, Al Fujayrah and Umm al Qaywayn are thc smallcst in arca and population and rcly on oil rcvcnucs much more than thc othcr Emirates, whilc thcy also cncompass thc more traditional ami rcligious Arab rcsidcnts.. Although thc UAE obtaincd its indcpcndcncc in 1971, thc cconomic, political and cultural construction of the local socicty began thousands of ycars beforc. The Islamic pcriod refcrs to thc time comprising thc rise of Islam, and the construction of thc Jslamic Umma or community, of which thc Emiratcs wcrc part of (600 A.D-1500 A.O). Aftcrwards carne a ~ Id. ·' Fahirn. p. l. 6.

(7) transformational pcriod whcrc thc Portugucsc, Dutch and British pcnctration of thc lndian Occan and thc Arabian Gulf took place ( 1500-1820):1. Latcr, the colonial period occurrcd during the l 820's whcrc the arca was known as Trucial Ornan ( 1820-1971 ). This era is quite important in thc building of a regional identity for thc Emiratcs, beca use aftcr the conclusion of World War II, Britain bcgan fostcring thc idea of Trucial Ornan as opposcd to the historie Ornan and other Arabian Península Statcs.. As far as what can be considcrcd modern history of the region, it is suitablc to trace it back to colonial times undcr British rule, whcn thc UAE startcd to fully takc form. The anticolonial scntiment bcgan to strcngthcn in thc late 1950' s whcn cvcnts in ncighboring countries such as Egypt ami thc nationalization of the Sucz Canal started influcncing and uplifting J\rab nationalisms. Ten ycars latcr in the mid 1960's the impact of Arab nationalism and the local anti-colonial rnovcmcnt was also dcrnonstratcd by thc participation of Abu Dhabi in thc boycott of countrics considercd supportive of Israel and plcdging assistancc to Egypt, Syria and Jordan in its wars against it. 5 This in return, legitirnizcd thc Trucial Ornan rulcrs in thc eycs of othcr Arabs, including thosc countrics whosc governments wcre agnostic towards thcm.. Britain on thc othcr hand, continucd to justify its inílucnce in thc region on thc fact that the Gulf situation was not a colonial issue, and it spccifícd that the Gulf Emiratcs thcrnsclvcs wcrc not British colonies but indepcndent statcs under special treatics guarantceing British protcction.. This unification and indcpendcncc finally carne as thc culmination of the debate dating back since l 960's, whcn thc Tmcial Ornan Ernirates, today known as thc UAE, established a series of Councils and cornmon dcvclopmcnt officcs during the British colonial pcriod. Thcsc intcrconnccted tribal intcrrclations wcrc kcy factor for thc emcrgcncc of thc UAE, in ~ Kazim, p.2. ' Kazim. p.318. 7.

(8) addition to the shared cultures and government structures imposcd by British rule, economics based on pearl fishcries and the discovcry of cnormous oil rcservcs. 6. The question or thc use of oil wcalth also laid the foundation for unification. Abu Dhabi was the first Emirate to find and exploit its vast reserves and thus was ablc to consolidatc its power by dcvcloping its dcfcnsc, purchasing armament and strcngthening its policc forces in a much rapid manncr !han the othcr Emiratcs. When it was time to divide the shcikhdoms, it bccame thc largest of thc Trucial Ornan Emiratcs during the drawing of the bordcrs that remain prcsent to date. With this gaincd power, the sheikhdom of Abu Dhabi began sharing its riches with thc neighboring Emirates which crcated a dcpcndency for the rcst of thc lcss oil rich states and thus providing a vcry concrete argumcnt for unification.. Another factor lcading to thc alliance was thc issuc of Arab Nationalism. Countries such as Saudi Arabia, Ornan and Iran, wcre trying to expand thcir influcnce, as wcll as their tcrrit01)', in the rcgion and ultimately saw in thc Trncial Ornan Emiratcs a land fairly simple to scize. Prompted by British inllucncc, thc Emiratcs sought to unitc as a way to avoid anncxation.. By thc cnd or the 1960' s and bcforc withdrawing from Trucial Ornan, Britain set thc mcans to draw the horders that now makc up the UAE. Legcnd says that this mcant scnding a British diploma! months to the diffcrcnt rcgions of thc Emiratcs asking village heads, tribal and Bcdouin lcaders which shcikh thcy sworc allcgiance to and wishcd to be part of. Thus, on Decembcr 2, 1971 what had bccn previously known as Trucial Ornan bccamc the Unitcd Arab Emirates. Thc UAE was thc cightccnth Arab Lcaguc mcmbcr, ami the onc hundrcd thirty sccond mcmbcr of thc Unitcd Nations. 7. Thc contcmporm)' pcriod that followcd aftcr thc UAE attaincd its indcpcndcncc from Grcat Britain and rcalizcd thc potcntial of its oil reserves ( 1971-2000) set forth thc currcnt ncw. '' Kazim, p.J2 I 7 Kazim, p.321. 8.

(9) phase of aperture and wealth. This has made the Emirates an intensively growmg destination ami economic, political and cultural power in the rcgion (2000 to prescnt day).. If the unpreccdentcd fluorishment of the United Arab Emiratcs, its economy, dcvelopment, politics ami influence in the region could be attributcd to one man, that would be Sheikh Zayed Bin Sultan Al Nahyan. Bom in 1918, he was the fourth child of a largc, influential and traditional farnily. In 1946 he becarnc thc ruler of Al Ain, an oasis near Abu Dhabi,. bcgan agriculture projects in thc arca, and by 1966 he had also bccorne rulcr of Abu Dhabi City, the rnajor locality in the region. Under his motto "Money is of no signi ficancc if not dcdicated for thc wclfarc of the nation"\ he started developing nurncrous housing, school ami hospital projects, and afkr obtaining indepcndcnce form Britain, he was the main prornoter of the unification of the seven Emira tes.. Given the historical times al the end of the l 960's and thc intense desire of solidifying wcak political economic and social systems, Sheikh Zaycd, as he is commonly rcfcrred to, sculpted the shape of thc new Statc.. In terms of governmcnl, the UAE is a Federal Sovereign State bound by a constitution undcr which thc Supreme Council of the Federation, which is cornprised of ali the rulers of the seven member Emirates, is the highest political authority, including bcing responsible for the clcction of the President and Vice-President of the country. Thc Prime Ministcr is appointcd by the Presidcnt, who is currently the Rulcr of Abu Dhabi, Sheikh Khalifa bin Zayed Al Nahyan, with the consent of the Supreme Council, and is responsible for recommending Federal Ministcrs. The Federal National Council, integrated by mernbcrs of cach Ernirate, is the UAE's lcgislative body. The Council is responsible for drafting ali Federal Laws prior to their rcfctTal to thc Suprcmc Council for enactment, for discussing issucs ofpublic import and also for monitoring the conduct ofthe Federal Govcrnment. 9. ,,x ··zJvcd - lhc Nalion Buildcr··, Dircclornlc of Mora le Guidancc, Abu Dhabi, 2007. Dcw. p.5. 9.

(10) Rcgarding laws, although the local Emiratc authoritics retain certain jurisdiction and the power to promulgate and implement legislation in non-federal arcas in thc form of Emiri 0. Dccrcc, ' conccrning labor laws and the trcatment of non-national citizens, ali thc Emiratcs havc thc samc obligations and rights since Labor Laws in the UAE are federal matter.. As has bccn mcntioned above, the Unitcd Arab Emiratcs is a rcgion historically dcpcndcnt on oil with a colonial past which has without a doubt influcnced its cconomic transformation ovcr the recent ycars.. 10. Dcw, p.9. 10.

(11) 11. ECONOMIC DEVELOPMENT IN THE UAE. "We knew littlc of the world beyond our sandy shores and elcar bluc waters. The world knew even less of us, the peoplc of the Arabian Gulf. Who would havc dreamed that things could change so dramatically? Whcn I look back at our humble beginnings, I can hardly believe our business and our country have come so far, so fast. I was only 15 ycars old when I bcgan working as a clerk. At thc time, some of my countrymen still made a living from pearl diving. Lifc was simple: our needs were few . Nobody knew then what lay in store: the devclopment of our vast oíl resources, the birth of a nation , the buildine: of our infrastructure, the swi ft l!rowth orour economy." 11 ~. In rccent ycars, the UAE has cnjoyed an immensely rapid economic gro\vth with an average annual in come per person of US$ I 8,430, 12 -impressive by any global standard, which can be traced back to the l 960's when the exploitation or the oil industry began to take place. The British withdrawal of the Emirates and the discovery of immense quantities of oil accelcrated the modernization of the region . Revenues from oíl and tradc cnablcd the rulcrs of Abu Dhabi and Dubai to institute wclfare projects, as well as to engage in a much larger and diversified economy.. In the J 960's Abu Dhabi had begun to prosper from oil exports and Dubai from its mercantile role, while the other Emirates rcmained dcpendent upon thc agrieulture and fishing sectors. This situation was relevan! because it contrasted with that of the 1820-1945 era, wherein the cconomies of ali thc Tmcial Oman sheikdoms wcrc bascd on pcarl fishcrics. Once this sector dcclincd, the pcriod which followed was of stagnation during the. 11 Words of Abdullah Hassan Al Rostamani, Late Chairman uf Al Rustamani Group, une of thc Jargcst all(J most puwerful cunglomcratcs in the UAE. w1\w.alrostamani.com 12 Fahim, p.2. 11.

(12) 1940's and 1950's. 13 It wasn't until thc 1960's whcn thc Emiratcs bcgan to dcvclop diversc cconomics in rclation to cach othcr.. Abu Dhabi was the largest sheikhdom in tcrms of land ami population, duc to the fact that. '. its dcvelopment and economy wcrc bascd on oil cxports. Dubai, dcspite its lack of oil resources ami its small sizc, dcveloped an cconomy bascd on international commercc, beca use it had been playing the role of commercial enterport sin ce thc late 1800 's.. In the bcginning of the 60's, the dccadc that startcd thc change, decision makcrs in the contcmporary UAE prívate ami public scctors cmbarkcd in an cconomic dcvclopmcnt program bascd on the revcnues of thc oil industry that up to prescnt day has succcssfully increascd the standard of living of thc UJ\E's citizcns, and continuingly improvcs the situation of socicty, thus fueling the growth of the immigrant labor force.. During the pcriod between 1945 and 1967, oil became Trucial Oman's chicf source of revenuc. After obtaining its indcpcndcnce, oil rcmained an important sourcc of the UAE's earnings ami a vital contributor to thc Gross Domestic Product (GDP), cspccially prior to 1980. During colonialism Abu Dhabi was thc only sheikhdom that exportcd oil, but soon aftcr, Dubai in 1969, Sharqah in 1974 and Ras al Khaimah in 1984 also became oil producers. 1~ Although thcir reserves, production and cxport lcvcls rcmaincd modest in rclation to thosc of Abu Dhabi.. In 1972 thc oil industry rcprcsentcd 60 per cent of thc UAE's GDP. Howcver by 1992 it had gone down to only 40 pcr cent, whilc thc incomc from construction, commerce, financial scrviccs and thc ovcrall scrvicc industry such as hotcls and restaurants had notably incrcased. 15 Furthennore, bctwecn 1972 ami 1975, oil exports accountcd for an average of 99 pcr cent of thc aggregatc monctary valuc of the UAE's cxports, by 1990, crudc oil. 13. 1 ~. 15. Kazim, p.325 Kazim, p.336 Kazim, p.337. 12.

(13) cxports rcprcscnted only 66.4 per cent 16 . Littlc by little, the federal and local govcrnments bcgan shifting towards an cconomy lcss dcpendcnt on oil and its dcrivativcs, and focused on thc dcvclopmcnt of othcr kcy arcas through pub tic and prívate invcstmcnts.. As for additional infrastructurc invcstment, it continucd during thc 1980' s and carly t 990 's, stimulating the rise of thc communication and transportation scctors as wcll, especially the construction of highways, airports and sea ports.. 17. The expansions within these scctors. werc quite significant bccausc thcy hclpcd fostcr othcr industries likc thc manufacturing onc, which had not bccn long-cstablishcd in thc arca.. In thc tradc and commcrcial scctors, during thc 70's thc contcmporary UAE adhcrcd to a ccrtain colonial pattcrn, wcrc most of its imports ami cxports carne from and wcnt to countrics in Europc likc thc Unitcd Kingdom, Gcrmany, Francc, Italy and the Ncthcrlands. This also bcgan to change in thc following dccadc whcn commcrcial partncrs divcrsi ficd and thc intcrnational cxchangc with Asian countrics likc Japan, China, India and South Korea rose to rcprcscnt almost 37 pcr cent of thc overa!! tradc. 18. Onc of thc main progrcsses in this sector was thc establishment in 1985 of thc Jebe! Ali Free Zonc in Dubai, a piece of land with 15 kilomcters of dockside, 70,000 squarc metcrs of covcrcd storage and 750,000 squarc mctcrs of paved open spacc. 19 The Jebe! Ali port is thc largcst man-made harbor in the world and has playcd a vital role in Dubai 's economic success. It was set asidc for spccific trading purposes in which various nations werc ablc to set up plants, storagc depots and offices without thc imposition of restrictions by the local govemmcnt. International companics started importing and cxporting goods to and from the arca free of duties. Abu Dhabi, Sharqah and Fujairah sincc havc also dcvelopcd and opened. 1 " 17 18. 19. Kazim, Kazim, Kazim, Kazim,. p.348 p.339 p.348 p.355. With dala from 1992.. 13.

(14) free zones, although not nearly as big or with the capacity as the Jcbcl Ali. Up to April 2008, there were 25 free zoncs in thc UAE. 20. .. By 1995, more than 800 of thc biggest intemational firms such as Sony, Rcebok, Halliburton, Xerox, 3M Corporation, Honda, Nokia, Johnson & Johnson, Polaroid, Shell Markets, Mitsubishi Motors, thc Mexican firm Ccmex, from 72 countries had establishcd themselvcs or expanded opcrations in thc Jcbel Ali Free Zone? One of thc advantages being that there are no restrictions on the rccruitmcnt of cxpatriate personncl, 22 and there are no wage parameters set by law. The number of foreign companies in the UAE in 1999 was about 1200 firms 21 and Dubai has positioned itsclf as a business hub and is home to thc regional headquarters of six of the top 10 companies on Fortune's Global 500. 24. The development of the communication and information technology sectors which occurred during the late 90's was also a key factor in the transformation ofthe Emirates. Via the use of technology, transnational corporations operating in the UAE were able to penetrate segmcnts of divcrse markets. Two very importan! dcvelopments were the establishment in the year 2000 of the tax free zones oflnternet City and Media City in Dubai.. Dubai Internet City (DIC) is a strategic place intendcd for cornpanies targeting ernerging markets in the Middle East, thc Indian Subcontincnt, Africa and Central Asia. It was designcd for like minded inforrnation and cornmunications technology (ICT) businesscs from ali over the globe, providing an cnvironment focused on the developmcnt of industry opportunities through leasing short terrn office space in a cost effective manner. Cornpanies. '" Fahim, p.24 1 ' Kazim. p.357 22 Kazim, p.356 '' Dcw,p.l '~ Emtairah, Tarq et ult., ''Arab companics in thc 21 st Ccntury". BRICS: WWF's Tradc ami Investmcnt Programmc. Switzcrland. [email protected]. 14.

(15) likc Microsoft, Cisco Systems, IBM, HP, Dell, Sony Ericsson, among many others, are currcntly prcsent. 25. A similar dcvclopmcnt in the technology sector was thc establishment of Dubai Media City (DMC), considcrcd to be thc only global media hub in thc rcgion, and intcndcd by Shcikh Mohammed Bin Rashid Al Maktoum, UAE Vice Presiden!, Prime Ministcr and Rulcr of Dubai, "to transform Dubai into a knowledgc-bascd socicty and cconomy", 26 through a world-class environmcnt in such broad aspects as music, film, broadcasting lcisure and cntcrtainmcnt.. Anothcr. \'CI)'. important cconomic sector which has bccn growing cxponcntially is tourism,. it has emerged as onc of thc UAE's most dynamic sourccs of non-oil revcnuc. This has becn cvidcnt to a grcatcr extcnt in cach of thc scvcn Emiratcs, but Dubai has clcarly lcd thc way, to thc point whcrc the industt)' has bccomc a major componcnt in the city's eeonomy. Intcrnational lcisure tourism has becomc the most rapidly growing segment of thc industry, so mueh so, that Dubai is today widcly acknowlcdgcd as ranking among the worlds lcading intemational rcsort dcstinations. 27 An examplc of this is thc rise in the number of hotel gucsts in Dubai thcy wcnt up from 373,000 in 1983 to ovcr onc mi Ilion in 1993, 28 to 2.5 million in 1998,. 29. ami from January to Scptcmber 2007 Dubai's hotels received more than. 5. 1 m1·¡¡·1011 gucsts:,(). In tcrms of thc pcrsonnel and thc social scrvicc scctors, thc growth cxpcricnccd can be explaincd by the increase in federal govcrnment cxpcnditurc on cultural, wclfare and sccurity apparatuscs. Hcalth scrviccs improvcd considcrably, infant mortality fell and lifc expcctancy also rose tremcndously. In 1979 women were expcctcd to livc only an average. )> www.dubaiintcmetcity.com (date lasl consullcd- April 22, 2008) '" www.dubaimediacily.com (dale last consultcd- April 22, 2008) 7 ' Dcw, p.30 Kazim, p.424 '" Dcw, p. 33 "' "Dh l 3trn boosl for thc Middle Easl". Emiralcs Business 24/7. Thursday January 3,2008, p. 38. ,x. 15.

(16) of 47 ycars; by 1992 this ratio had riscn to 73 ycars, 70 for mcn, 31 ami in rcccnt statistics of 2007, women's lifc expectancy was up to 78 years allll 71 for males.. 12. A very important charactcristic of the wclfarc establishment thc federal govcrnment had instituted was that of the housing sector. Govemmcnt emphasis on projccts for the construction of housing led to an increase in thc numbcr of dwellings it gavc for free to its population. Many of thc citizens who obtaincd this free housing wcre Bcdouins who settled in new villages that the Abu Dhabi governmcnt built. Keeping up with this trcnd, thc federal govemment also extended payments to low incomc familics in rural arcas, inereased benefits to lood cooperntivcs, citizens' associations, sport clubs and to thc maintenance and construction of mosques 31 I lcalth care, education, ami frequently housing, wcrc free scrvices providcd by the State, making evident the extent or involvement of thc federal and Emiratc governments in every sector of not only the cconomy but of society as well.. The differences between the seven Emirates are visible espccially in thc ccono1111c spectrum. Sharjah ami other Northern localities havc less significan! impact in the overall economy and thus in the labor market. Furthermore, since these are the more traditional and Jslamic Emirates, wclcoming of foreign cultures is not as dcep as in Dubai or Abu Dhabi and thcrc are fcwer local cmployment opportunities for foreign labor.. This fcdcration, of scven small Emirates on the north-eastern tip of the Arabian Península, has demonstratcd to thc world thc enormous capacity to transform into a lcading regional cconomic power. A testament to this was thc joint mcetings held in 2003 in the Emirates, of the International Monetary Fund (IMF) allll the World Bank (WB), thus becoming the first country in thc Middlc East to ever do so. The rcasons were simple, thc UAE in 2000 had. 11 ·. Kazim p.340 hllps://www.cia.gov/library/publicalions/lhc-world-foclbook/gcos/ac.hlml (date lasl consullcd- March I O, 2008) 11 Kazim, p.343 12. 16.

(17) the strongcst fiscal position of any country in thc reg1on, its cconomy was thc most divcrsilicd and it was the fricndlicst to forcign invcstors.. 34. It was important to mention abovc thc contemporary UAE's cconomic construction to fully undcrstand thc forces bchind the growth of thc cconomy. This growth has triggercd a risc in social wclfarism ami consumcrism and thcsc are factors that givc an in dcpth insight into the naturc and composition of thc currcnt labor force, social stratification and intcrlinkagc of thc cmiratcs with rclation to thc ncw global systcm.. 1 ·~. Dcw, p.13. 17.

(18) 111. I!Vll\1IGRATION OF FOREIGN LABOR INTO THE UAE. Thc citizens of thc Unitcd Arab Emiratcs, or as thcy are locally callcd "Emiratis", are a rapidly shrinking minority in thcir own country. Thc rcliancc. 011. foreign workcrs, mainly. from India, Pakistan, Southcast Asian countrics and Europc, now represen! more than 73.9 pcr cent of thc country's 4,444,011 pcoplc according to a 2007 ccnsus. 3:; Thc amount of forcign workcrs is largcr then cvcr befare.. Thc growth of thc contcmporary UAE's labor force is actually a continuation of a proccss that bcgan in Trucial Oman during thc l 960's, whcrc thc growing cconomy bcgan to fucl thc nccd for more labor.. This dcmand for \Vorkcrs could not be fulfillcd by thc local. population. Thus, thc nccd to hirc skilled ami unskillcd forcign \vorkcrs commcnccd.. The suddcn oil boom and thc various govcrnmcnt welfarc projccts promptcd thc railurc of a local Emirati working class cmcrging. lnstcad, for thc dcvclopmcnt of construction and infrastructurc projccts, thc British companics still in thc arca brought in workcrs from Pakistan, India and lran. Thcrcafter, thc numbcr of workcrs, the sector in which thcy wcre cmploycd, and country of origin bcgan to diversify and cxpand.. In the 1960's, still in Trucial Oman, thc UAE's prívate and public scctors invcstcd largc amounts of capital in infrastructurc projccts which continucd through thc 1970's. 3h Thcsc rcquircd an cxtcnsivc labor force, as well as expcrtisc for thc planning and maintcnancc, so workcrs from the lndian Subcontincnt started to be hired. Thcy rcprcscntcd low-cost labor and ensurcd the govcrnment and prívate invcstors thc maximization of prolits and minimization of costs. In addition, thc nativc population of Trucial Oman/UAE was too small to providc thc rcquircd labor. Once these infrastructure projccts wcrc complctcd, thcy madc way for furthcr cxpansion during thc 1980' s and l 990's, thus facilitating thc arrival of addcd immigrant labor, which continucs to our prcscnt day. 35. hllps://www.cia.gov/library/publicalions/thc-world-foclbook/gcos/ac.hlrnl (dale las! consultcd- March I O, 2008) 'h Kazirn, p.366. 18.

(19) With thc rising population carne thc nccd to expand airports, as wcll as housing, clectricity, water, roads, schools, hospitals and overall scrviccs. Thcreforc, the construction of thcsc facilities, thc production of thcsc goods and thc provision of the additional scrvices required extra labor, most of which once again had to be "importcd". This cyclc in fact produced a sclf-perpctuating phcnorncnon; the more thc population grcw, the more infrastructurc that was needcd and with this, thc more workers to complete the jobs becamc necessary.. As thc following table illustrates, thc nurnbcr of foreign workcrs being imrncrsed into thc local workforcc has rapidly increascd ovcr thc ycars.. THE UAE'S LABOR FORCE AS PERCENT AGE OF PO PULATION. Total population. 37. 1975. 1980. 1985. 1993. 2000*. 2007**. 557,887. 1,042,0. 1,379,30. +2. 2,900,000*. 4,444,011 **. 99. o. mili ion. f'orcign population. 356,002. 755,477. 983,200. Total labor force. 293,788. 559,960. 683,825. 2,200,000* 800,000. 1,400,000*. 2,840,000 (2006)**. labor. 45,500. 54,900. 68,300. 140,000*. Foreign labor force. 248,288. 505,060. 615,525. 1,260,000*. National force. *Dala from Dcw, Philip and Shoull, Anthony. Doing Business wilh !he Uniled Arab Emirales. Kogan Pagc Limited, London, 2000. p.203 **Dala lrom lhc Annual Report of 1hc Unitcd Arab Emiralcs Central Bank, 2006.. 17. Kazim. p.366-367. 19.

(20) As far as the segmentation according to nationality, what can be secn from the table below, the immigrants from Pakistan, India and Sri Lanka reprcscntcd Lhc largcst grouping obtaining work pcrmits into thc UAE. In 1982 for cxamplc, work permits werc given to 72,733 immigrants from India and Pakistan combincd, in contras! to the 25,084 individuals form thc Arab world, 7,709 Europeans and 1,219 from thc Amcricas, mainly the United States, who obtained such work permits. 38. UAE POPULATION BY NATIONALITY (PERCENT AGE OF THE TOTAL PO PULATION)3 9. 1975. 1980. UAE. 36.1. 27.9. Omani. 4.0. 3.7. Egyptian. 3.2. 4.2. Jordanian. 2.9. 3.0. Pakistaní. 18.5. 16.9. Indian. 13.8. 22.7. Sri Lanka. 6.8. 2.4. Othcr Asians. 5.8. 5.7. Nationality. In 2008, Indians comprisc thc largcst portian of thc forcign work force in the UAE, so logically rcmittanccs to India are high. According to the UAE Exchange, they are averaging Dh93.8 l million Dirhams (US$25,596,340 dollars) a month, the highcst any count1)' by expatriate population despitc substantial increasc in thc cost of living in thc rcgion. ~K. .. · Kaz1m. p.370 "' Kazim, p.370. 20.

(21) Remittances then go in order of quantily to Pakistan, Philippines, Indonesia, Bangladesh and Sri Lanka_-1o. As for the distribution of the labor force by sector, thc workers cmploycd in fisherics and agriculture have been decreasing in part duc to increased mechanization of both sectors, and because of educational opportunitics and cncouragement by families, and also the governmcnt, to seck employment in citics whcre jobs are belter paid.. Another contrasting sector which employs fcwer workers than expected is Oil and Mining, dcspite the fact that the petrolcum business is currently the main contributor to the UAE's GDP, and was traditionally the main drive for its growth.. The manufacturing sector has been increasing with time as a tcstamcnt to the UAE's economic divcrsification, as well as construction. Although the numbers declined from 1975 to 1991, in recent years investments in real-estate and infrastructure has immcnsely riscn. As for the nationality ofthc workers employed in these scctors, thc amount of foreign labor is vcry high. In 1980, Asian workers constituted the largest portion in the construction workforce with 87.6 pcr cent.-1 1. By contrast, thc higher pcrcentage of the labor force that worked in the hotel, trade ancl restaurant business increased because immigrant workers startcd taking their families to the UAE, and also bccause of growing tourism, cspccially in Dubai. In the hotel and restaurant sectors, immigrant workers constituted 81.5 per cent of the workforce in 1980. 42. Thc governmcnt sector remaincd second to construction in the percentage of thc UAE's labor force that it cmployed, becausc governmcnt personnel, at both federal and Emirate leve\, continucd to be nccded to accommodate the health, housing, education, sccurity and. 'º "Indian rcmillanccs high dcspilc rising cosls". Thc Nation ncwspapcr, GulfNcws, UAE, Thursday January 3, 2008, p.35 " Küzim. p.374 >) Ibídem. 21.

(22) social welfare increasing needs, in addition to these positions being extremcly covcted for their high salaries and benefits. 43 So naturally, among the UAE national workforcc itself there is a prefcrence to work in the government, and local authorities have responded to this by promoting "Emiratisation", a self-denominatcd proccss through which UAE national are incorporated into the prívate working sector.. 44. Thc one sector which has increased exponentially over the years is the percentage of the labor force employed in the domcstic sector, which occurred mainly for two reasons. The firsl was thc brcakdown of extended families into nuclear ones during the 1970's and particularly the l 980's. Thc govcrnmcnt's policy of offcring housing subsidies, and of the actual provision of free housing in somc cases, lcd families to scparatc and form individual houscholds. Sccondly, the govcrnmcnl 's policy of encouraging thc natural increase in the local population through furthcr subsidies, also lcd to thc additional nccd of hiring domestic hclp. I Icrc, thc Philippino, Korcan and lndian immigrants wcrc particularly high. 45. As for recen! data, according to thc 2006 Annual Rcport of thc UAE Central Bank, thc total numbcr of employees in thc Emiratcs rose during 2006 by ncarly 220,000, rcaching 2.84 million workcrs. The constmction sector rankcd firsl in tcrms of numbcr or cmployees, which rcached 647,000, rcprcsenting 22.8 per cent of thc total number of cmployces in 2006. Thc wholcsale, retail trade and maintenance scrviccs sector ranked sccond (519,000 cmployecs and a ratio of 18.2 pcr cent of the total number). The manufacturing industries ranked third (362,000 employccs and a ratio of 12. 7 pcr cent of the total number). Govemment services sector ranked fourth (284,000 employces and a ratio of I O.O pcr cent of the total number). The ratio of employees in other scctors ranged between 0.2 per cent and 7. 9 per cent of the total number of employees. 46. '·' Kazim, p.373-374 " Dcw, p.142. '' Kazim, p.374 "' Annual Rcpurl uf thc Unilcd Arab Emiralcs Central Bank, 2006. 22.

(23) DISTRIBUTION OF THE UAE'S LABOR FORCE BY SECTOR (MAIN SECTORS)4. 7. 1975. 1980. 1985. 1991. 2006*. 8.0. 5.8. 6.2. 6.1. 193,000*. 1.5. 1.2. 1.5. 1.5. 33,000*. Manufacturing. 6.0. 7.2. 9.5. 94. 362,000*. Construction. 25.6. 26.4. 18.3. 17.6. 647,000*. Trade, Hotel,. 17.6. 16.7. 15.3. 14.5. 1,286,000*. 15.1. 13.3. 16.6. 16.4. 284,000*. 2.8. 3.8. 6.0. 7.1. 226,000*. Sector. Agriculturc and Fishcry Cmdc Oil & Mining. Restaurant Governmcnt Scrviccs Domcstic Serviccs. *Numbcrs givcn in thousands by thc Unitcd Arab Emiralcs: Statistical Appcndix, IMF Counlry Rcporl No. 07/348. 2007 lnlcrnalional Monclary Fund Octobcr 2007.. In an attcmpt to cxplain the force behind the sprouting immigration of foreign workers into the UAE, J\boubakr Badawi, regional. representative of the International Labor. Organization in 2000, said labor-intensive programs favored by countries suffering from uncmployment could not work in thc Gulf region, partly bccause "In this region, you havc abundant wealth ami only a fcw inhabitants."~ 8 Thcreforc, the rcliance on immigrant labor is vital for the Erniratcs economy and functioning of ali the di verse segmcnts of its society. 7. Kazim, p.372 "UAE nalionals \\·orry as migranls tlood in ... China Daily. (Norlh American cd.). Ncw York, N.Y.: Nov 3. 2000. p. 11 ~. ~. 8. 23.

(24) Without the labor force in general, and the influx of immigrant labor in particular, the growth in ali thc sectors of the UAE's economy could not have occurred to the extent and with the vclocity that they have.. 3.1 Federal Law No. 8: Regulations of Labor Relations and its Amendments and Order lssued in Implementation Thereof. In 1980 a federal Law was passed attempting to guarantee labor conditions for local and foreign workers in prívate businesses in the UAE. Federal Law No. 8 applies in ali of the Emirates but surprisingly, it does not apply to governmcnt workcrs, membcrs of thc armed forces, police ami security forces, workers cmployed in ccrtain agricultura! fields and grazing, or domestic hclp cmployed in prívate residenccs (e.g., housemaids or chauffeurs).. With respect to governmcnt ,vorkcrs, most of which are Emiratis, there is civil serv1ce legislation from 1973 applicablc to them.~ 9 However, for ali othcr workers that Federal Law No. 8 does not encompass, there are few regulations in place to protect them at federal, emirate and free zone levels.. To address sorne or the most relcvant components or Federal Law No. 8, it's importan! to mention that business in the UJ\E is categorized as commercial, profcssional or skillful and it's required that ali employees be employed in conformity to employment contracts reflecting the wage, term (i.e., fixcd, which refcrs to contracts for a specified duration with specific commcncement and completion dates, or indefinite) and the nature of employment. In the abscncc of a written contraer, adequate and substantial proof of thc employment terms may be establishcd through differcnt typcs of evidencc, such as paychecks or. ~. 9. Labor Law in lhc UAE, p. 7. 24.

(25) coworkcr witncsscs. 50 As for salaries, there is no minimum or maximum wagc, so these are paid according to thc terms of agrcement in each particular situation and contracl.. As for working conditions, thc Articlc 65 or the Labor Law prescribes a maximum of cight hours per day (Articlc 66 of thc Labor Law specifics that thcse cight hours are arrangcd so that no more !han fivc consccutive hours are requircd without intervals of al least one l10ur for rcst, prayers and mcals); and a maximum of six days a wcck. 51 Working extra hours requircs paymcnt of ovcrtime wagcs by law, stipulatcd in Articlc 67. Rest days, or what wc usually know as weckcnds are Fridays ami Saturdays, according to the Islamic calendar. Religion also plays an important role during thc holy month of Ramadan detcrmincd by a lunar calendar, whcn thc normal work hours are rcduccd by tvm hours pcr day. Furthermore, employces are entitled to thirty days of paid vacation cach ycar, plus national holidays and firtccn days ofpaid sick !cave.. In regards lo female and juvcnile workcrs, thc Labor Law also has spccifíc provisions. For example, women havc 45 days of paid maternity !cave, and may takc up to 100 extra days if therc are complications during birth. 5" They cannol work at night and thcir rcmuncration must be cqual to that of a man if shc pcrforms thc samc task. Juvenile workcrs are not often seen in thc UAE job markct. This is partly duc because thc local Emirati society is usually wcll off and doesn 't cncouragc younger mcmbers of the family to start working befo re cnding their studics. Furthermore, labor laws state that in order to obtain a working visa, thc non-national has to be at lcast 18 ycars clld; thcrefore, while provisions to protect juvenilc labor cxist in law, they don't have a lot ofgrounds to be applicd.. Federal Law No. 8 contcmplates thc employmenl of non-U A E nationals after thc required approval is obtained from thc Ministry of Labor and Social Affairs, and it's usually subject or conditioned on the unavailabiliiy of qualilied Emiratis. Thc Law states that the labor department may not give its approval to the rccrnitment of non-nationals "unless its rccords '. 11. Dcw, p. 197. '' Ibídem S). Dcw, p.198. 25.

(26) show that, among the nationals registercd with the cmploymcnt scction, there are no unemploycd persons capablc of performing the work rcquired". 53 I lowcver, as previously statcd, since the local Emirati population is a minority, it's not difficult to fulfill this requircmcnt at any leve] of thc vast labor spcctrum.. Also, according to Article IO of the Law, nationals of other Arab countrics are to be granted prefcrence in any givcn situation where two or more foreign individuals with the same credentials and expertise are applying for a position. Thesc prcfcrential rights provisions are an cxtcnsion of the UAE Constitution, which states that the Federal Union must cndeavour to ensure that employment, and vocalional training related thereto, is availablc for ali UAE citizens. An examplc of the incrcasc in such legislation is thc curren! emimtisalion policies of the Ministry of Labor, which encourage or often require the. cmployment of UAE nationals in certain job scctors. 5~. The law contemplates a so called "probation period" for up to six months with respcct to all cmployments and it must be previously and exprcssly stated in the cmployment contract. 55 During this time, any cmployer may dismiss or fire a workcr without notice and without paying any typc of scverancc or benefits. 56 J\rticle 120 of the Labor Law allows an employer to go forth with this type of dismissal in a situation werc the employee adopts a false identity or nationality; presents forged documents; makes a mistakc rcsulting in substantial material loss for the employer; disobeys instructions rcspccting industrial safety; does not perform his or her basic duties; revcals company sccrcts; is sentenccd by a compctent court for offcnce involving honor, honcsty or public morals; is found in a statc of drunkcnness or under thc intluence of a drug during working hours; or if thc cmployee is absent from work with no val id reason for more than twenty consecutivc days. 57. '. 1. 54 55. Federal Law No 8 Y car 1980 Re Dcw, p.197 Dcw, p. 197. sr, Ibidcrn ;. 7. Dcw, p.199-200. 26.

(27) In the case whcrc a 11011-national dcsires to !cave his or her job bcrore thc term of thc contract expires, whcthcr it's for a valid or non-val id reason, he or shc "may not, cvcn with the cmploycr's conscnt, take up othcr cmployment for onc year from the date on which he [or shc] lclt his [or her] work".-' 8 This focilitatcs thc government to keep a close and dctailcd account on thc typcs of jobs that foreigncrs are occupying ami the time spent in them.. Thcrc is a rcquircrncnt in thc Law No. 8 for certain cmployers who work with unskillcd or low eaming labor force, to submit to thc Ministry of Labor a bank guarantcc, which serves as a type of collateral for whcn a worker is dismisscd. It's intcndcd to covcr scrvicc bcnclíts, rcpatriation or any othcr costs relatcd to thc scparation of thc cmployce and thc company.. An important advancement in favor of forcign workcrs is that thc cmploycr is rcquircd by law to providc food, accommodations ami transportation for workcrs who livc at lcast I O kilometcrs away from thc city.-' 9 This mcasurc is cspccially of rclevancc for low skilled workcrs, who don't normally live in thc cities wherc they work and thcy do instead, in labor camps providcd by cmployers, as stipulated by law. Furthermorc, living conditions for cxpatriates in the UAE vary according to thcir position, pay and nationality. Expatriares who work in profcssional, managerial ami othcr highly-skillcd jobs cnjoy far bctter living conditions than do unskillcd ami domestic or manual workers. llighly-talcntcd expatriares live in wcll built, big sizcd upscalc houscs, while low-paid workers mostly livc in substandard accommodations. Thcse are only a fcw diffcrenccs betwecn thc two typcs of forcign labor in thc Emiratcs.. ;x Federal Law No 8 Year 1980 Re ;,, Fahim, p.77. 27.

(28) 3.2 Thc Sponsorship Systcm and thc Issuing of Work Visas. Entry into the UAE is notan easy task, especially for those citizens from countries with no UAE official representation. An entry service permit is available to businessmen and tourists, but it must be sponsored by a company, hotel or local resident. This same applies to forcign workers; a local company or sponsor rnust solicit the pe1mit and then make the necessary dealings in order for the worker to be allowed cntrance to thc Emirates.. In order to obtain work visas for foreign citizcns, the owner of the business or company is required by law to be registered at the Minist1y of Labor and Social Affairs ami the Naturalization and Residence Department. 60 Only then will the procedure to hire foreign workers may take place, and this Ministry is the govcrnment instance which determines the number of visas allowed by each company.. Ali foreign workers except nationals of the Gulf Cooperation Council 61 require work visas. These resident visas for employrnent are typically issued for three years in which the employee must live in the Emirates or not spend more than 6 months abroad in order for it to not be canccllcd. Oncean employee has been granted and provided an employment visa, salmy levels are met. Also, the employee may sponsor his immediate family for residence purposes, not work, and the visa for eve1y adult is usually eonditional on the need to pass a local medica! examination. 62. Immigration matters in the UAE are primarily governcd by Federal Law NO. 6 of 1973 Regarding the Entry and Residence of Foreigners, as amended by Federal Law No. 13 of 1996. 63 Because the majority of the UAE's rcsidenccs and employees are foreigncrs, this is. the immigration law that directly impacts the majority of the population and busincsses.. 11. Fahim, p.66 '" Commcrcial Block fonncd in 1981 to strcngthcn tics all() cconomic coopcration bclwccn its mcmhcrs: compriscd ofsix Pcrsian GulfStatcs: Bahrain, Kuwait. Ornan, Qatar, Saudi Arabia and lhe UAE. "~ Dcw, p.142 3 " Dcw, p.200 ''. 28.

(29) A peculiar phenomcnon that takes place when hiring and sponsonng foreign workers, especially for less skilled labor, is the operation made by intermediaries or "suppliers". lndividuals who offer their expertise and connections, especially to businesses in the service sectors, to contact forcign workers abroad, pay for their travcl and position thcm in local companies. These intermediaries usually travel to countrics like India, Pakistan, Sri Lanka ami thc Philippines in search of cheap labor amongst the local population. Thcy offer individuals an initial payment, travel expenses and the promise of a job waiting for thcm in the UAE. They then go back to the Emirates where thc company in need of foreign labor finaJizcs the mandatory paper work in the Ministry of Labor to obtain the required work visas, and they then semi for the worker to the place of origin. The intermediary's job is completcd \Vhen the foreign worker arrives lcgally in the UAE, is provided with housing, food, or whatcvcr the labor contraet stipulates and thus begins to be governed by the local labor laws.. With regards to thc labor supplier, the Federal Law establishcs in Article 17 the following, "it shall not be pcrmissiblc for any person or body corporate to opcratc as an agcnt for the recruitment or supply of non-national workers unlcss he or it is licensed for the purpose; such license may only be issued to nationals ami in cases whcre its issue is considered ncccssary; it shall then be issucd by order of the Ministry of Labor and Social Affairs". 64. furthermore, according to Article 18 of the Labor Law, "no licensed cmploymcnt agcnt or supplier of labor shall demand, accept from any person, either before or after his recruitment, any commission or material reward in return for arranging such rccruitmcnt or chargc him for any expenses thereby incurred, cxccpt as may be ordered or approved by the Ministry of Labor ami Social Affairs. Pcrson supplied by an employment agent or supplicr of labor shall, immcdiately upon cntcring employment be rcgardcd as employces of the employer and shall have ali the rights of the employees of thc establishment in which they are employed; rclations betwecn them ami thc employer shall be direct and without any. "~ Federal Law No 8 Ycar 1980 Re. 29.

(30) intervention on the part of the employment agent, whose funetion and relationships with them shall cease as soon as they are introduced to and employed by the employer". 65. In the UAE there are severa! recruitment agencies licensed to contact and hire foreign labor. Any person who desires to obtain a license for the supply of non-national workers needs lo first certify he or she is a national of the UAE, register themsclves in the Ministry of Labor and Social Affairs, and only then may reccive remuneration from thc employers who ask them to cal! for non-national workers.. 66. As means of control in such a dclicate matler, labor suppliers are required by law to provide the Ministry of Labor three times ayear (during the months of January, April and August) with a list where they are obliged to specify data on the workers which they have recruited. their native countries and detailcd information oftheir employers in the UAE. 67. Unforhmately, with the growing demand for foreign labor, especially for unskilled workers to take up jobs in the construction and services sectors, suppliers have been known to act contraI)' to law and take advantagc of these persons. Thcy find loop-boles in the system and since they act as intcrmediaries and are the ones who contact the workers in their native lands. it has resulted easy for them to not always work in the best intcrest of the immigrant worker. This is surcly an arca whcrc thc UAE govcrnment will have to further regulate and en force thc applieable laws in order to ensure thc rights of workcrs arriving to thc UAE from abroad.. 3.3 The role of Expatria tes and skilled labor. It would be difiicult to find anothcr place in the world where foreign workcrs are so highly in demand, where they have virtually constructed and developed a country and where they ,., Federal Law No 8 Ycar 1980 Re "" Federal Law No 8 Ycar 1980 Re 7 '' Minislcrial Ordcr No. (57) Ycar 1987 Re. Liccnsing or mcdiation thc rccruitmcnt ami supply of nonnalional labor. Federal Law No 8 Year 1980 Re. 30.

(31) rcprescnt thc vast majority of not only the local workforce but of thc population as wcll. Expatriares are today and have been for some dccades back, prcdominant in thc United Arab Emiratcs workforce. They occupy a widc range of positions; from company CEO's of major businesscs to middlc managcmcnt in local companies, to lowcr skillcd jobs in the conslruction, servicc ami domcstic labor sectors. Thcreforc therc is a substantial rcsidcntial population in the UAE from othcr Arab countries, the Indian sub-contincnt, as well as a growing community from Europc and thc Unitcd Statcs. Virtually cvery nation can be representcd in the Emirates local labor force; a clcar illustration is that thc Emirates are now home to the largest British expatriare community in the Middle East. 68. Furthermore, the establishment of countlcss multinational compames 111 the reg1on has dcrnanded the transfcr of individuals from ali ovcr thc world, espccially from western European countries, Australia and from the Unitcd States. Foreign hrancl1 offíces rcgistcrcd in the UAE frcquently and almos! entirely operare with an expatriate labor force, so in an attcmpt to protecl local and other Arab workcrs, thc Govemmcnt has instituted differcnt initiativcs to ensure that Emirati individuals ami Arab nationals in cqual circumstanccs are hircd over other foreign workers, especially in the prívate sector.. For these privare sector workcrs, thcre is a comprehensive labor law which applies ami thcy must be sponsored by a business and registercd in thc Ministry of Labor. The law has been written with the aim of guarantecing thc employee ccrtain hasic rights and entitlemcnts. lt deals with such issues as hours of works, overtime, holiday entitlemcnt, termination of cmploymcnt and entitlcrnent of service gratuity. 69. Skilled labor in thc UAE is vcry wcll rcmunerated, and cmployrnent packages usually cntail not only salaries but transportation and accommodation bencfits as well. Employcrs givc workcrs a basic salary in addition to accommodation and transportation allowances, so an individual going to the UAE from abroad who finds a job in advcrtising, for instance, will 68. Dcw, p. l ,,,, Dew, p.143. 31.

(32) get paid US$3,000 dollars, US$ l 500 for accommodation and US$500 for transportation; making the wholc package to $5,000 tax free since thc UAE docsn 't requirc thc paymcnt of taxcs; overall a pretty good dcal for any foreign workcr in the Emirates.. It's important to mcntion, that evcry expatriatc employee may only work for the sponsoring employer. If a pcrson wishcs to remain in the UAE aftcr thc initial contract tcrm has come to an end and work for another employer, the consent of tbe original employcr must be requircd, otherwise he or she would havc to go back to the country of origin and rcstart the hiring proccss through a new application. Sorne catcgorics of expatriate workcrs in the lower leve] occupations may, in any cvent, be restricted for a period of six months from taking up fresh employment in the UJ\E and would nced to return to their country in the interim. Thc employer is usually responsible for repatriating an cmployee at the end of thc contract tcrm.. 70. These rcquirements that bind an cxpatriate's immigration ami residency status to his or hers employmcnt status are l'undamental to the control, that must be implcmentcd by the local UAE govemment, in an expatriatc-dominatcd labor force.. Another reason worth mcntioning cm the considerable nccd to bire foreign labor in the Emiratcs is thc lack of skillcd workers who spcak English and thc foct that Emiratis havc different requircments of which lite stylc plays an important role. There are examples of nationals who have rejectcd considerable offcrs becausc of distanccs between their homes ami the business location, bccause they considcr the paymcnt too low or simply bccause the financia] support thcy receive from the governmcnt is so limitless, that working can be considcrcd as an option.. The bcncfits, labor conditions and overall living circumstanccs which apply to expatriatcs with high-end knowlcdgc-basecl jobs vary considcrably from thc situation the unskillcd worker spectrum faces clay to clay. 70. Dcw, p.143. 32.

(33) 3.4 Unskillcd labor and illcgal immigration. As part of the increasing foreign labor force in the United Arab Emirates, the percentage of unskilled workers or thosc who are paid at unskilled wage rates is considerable. This is especially true if one takes into account that the construction and service sectors, in which they are mostly employed, are two of the biggest forces behind the development and economic growth of the region.. The sources for unskilled labor workers are mainly the Indian Subcontinent, East Asian countries such as the Philippines, Malaysia ami Indonesia, or Arab speaking and Muslim localities in /\frica like Sudan. These are regions where unemployment is usually high and wages low, so even the low paying jobs in the UJ\E end up being higher for doing comparable work, than those in the home countries.. U nsk illedworkers have been seeking employment in the UAE since the 1970 ·s not only because of the higher wages, but pa11ly due to freedom from taxation, 71 educational opportunities, health carc and other benefits that automatically come with being employed therc. Low-wage factOI)' workers such as textile machinc operators, box packcrs, elcctricians, truck drivers, secrctaries, clcrks, maintenance workers, hotel personnel and especially domestic labor are hcavily incrcasing.. These workers also tcnd to specialize ami work in jobs related with their regional groupings. Indian and Pakistaní males are frequently ernployed in the construction and indircct service sectors. Philippinos and eastern J\sian nationals are sought after by the hotel and dircct serviccs sectors because most of them speak English.. The domestic worker stratum can be segmcntcd in terms of nationality, rcligion and wage earncd. figures from 1985 report that 98 pcr cent of the domestic workers in the UAE came 71. Personal incomcs, including ali forms ofsalary and capital gains. are nol subjccl to laxalion in any oflhc Emiralcs.. 33.

(34) from Asia: 67 per cent from Sri Lanka, 23 per cent from India and 9 per cent from the Philippines.n In order to sponsor workers cmployed in domestic labor in the Emirates thcrc is a minimum basic wage requircd of Dhs.6,000 (aprox. US$ l 634 dollars) pcr month. 73. No m1111mum wage is contemplatcd in Federal Law No. 8. Howcvcr, it is important to mention that along thc many governmcnt concessions that rrec Zones like thc Jebe! Ali offcr its users and firms is thc availability of low-wagcs and non-unionized labor. Most workers cmployed in Jebe! Ali eam lowcr wages that those earned by workers in their home countrics of the multinational corporations. In 1993, the guidcline wage for unskilled workers for instance, was US$ 140-220 dollars per month and for semi-skilled workers $160-270 per month. ror these ernployees it was assumcd that the employers would provide housing and food. 7.¡. A harsh aspcct ofthe labor law in the UAE is that different obligations and rights are given. to a person in accordance to his or her job. An employee with a monthly salary of lcss than Dhs.4,000 Dirhams (aprox. $1,090 dollars) plus accommodation allowance, 7:i will not be able to sponsor his spouse or children for the purposc of residing in the country. This is a measurc that affects mostly low skilled workers, for they are the ones who earn thc lowest wages.. Among the obligations that the employer has towards thesc workers, is the need to provide housing, which are commonly known as labor camps. These places which are ustially in the outskirts of the main cities are vcry common in the UAE and the Ministry of Labor is in chargc of visiting and supcrvising them. The rnain problem is they are usually in poor conditions, overpopulated and barcly mcet the requircd standards.. n Kazim, p.395 Labor Law in thc UAE. p. 7. 1.1. 74 Kazim, p.361 75. Labor Law in the UAE, p.6. 34.

(35) Efforts to improvc thcse situations are bcing implcmcntcd by thc local Emirati govcmmcnt, and so far relcvant progress has bcen achicved. J\ proposal made by thc Ministry of Labor was draftcd in accordancc to thc standards ami policics set by thc lntemational Labor Organization (JLO). Thc intcntion is that labor camps in thc UAE would havc a living spacc of at lcast I O squarc metcrs with ccramic tile floors, individual bcds. an cntcrtainmcnt hall with television, water coolcrs, toilcts, kitchcns and dining area. 71'. Furthcr cfforts in this arca wcrc the complction of Labour City, a labor camp with a capacity to accommodatc 12,500 supervisors and groups of workcrs across Dubai Industrial City and Dubai. Thc Labour City, which compriscs 14 buildings, is thc first of sevcn that are planncd for construction at Dubai Industrial City ata cost of Dhsl.6 billion Dirhams (US$435 million dollars); 77 and thc curren! construction of thc biggcsl labor rcsidcntial arca in Abu Dhabi at a cost of $114 million dollars. The compound was aimcd al providing tcmporary accommodation to around 32,000 workcrs, tcclmicians and supcrvisors. 7 x. Thc overa[! working conditions for unskillcd laborcrs in thc UAE rcprescnt sorne of the biggcst ami most complex challcngcs the local govcmmcnt must dcal with in thc coming years. Human Rights Watch, thc intcrnational organization that handlcs relatcd issucs, has raised many complaints ovcr the past ycars about the uncthical cmploymcnt practiccs of low incomc labor.. 79. Thcsc unskillcd workers, espccially thc oncs whosc jobs involve bcing. outsidc, frcqucntly have to work in harsh weathcr conditions. Thc climatc within the UAE is gcncrally hot and dry ami tcmpcraturcs rangc bctwccn an average mínimum in January and Febrnary of I OºC to 14ºC and an average maximum in July ami August of 48ºC to SOºC.. 8. ° Furthcnnorc, domcstic. laborcrs, which in almost all the cases are women, are not. covcred by the UAE labor law and are frcqucntly objcct of abuse with no govcmmcnt instancc to tum to orto protcct thcm.. 71 '. "Dubai opcns first 'luxury' labour camp" Arabianbusincss.com, Fcbruary 26, 2007 "Dubai opcns firsl 'luxury' labour camp'º Arabianbusincss.com, Fcbruary 26. 2007 78 hllp://www.amcinfo.com/135570.html (dale las! consullcd- April 6, 2008) n hllp://hrw.org/cnglish/docs/2007 /03/25/uac 1554 7.hlm (date las! consullcd- April 20, 2008) xo Dcw, p. 4 77. 35.

(36) Few rneasures havc bccn adopted by the government in favor of these unskilled workers. /\. spccialized court to dcal with labor complaints was instituted along with a special inspcction unit to monitor workcrs' accornrnodations and workplace, ali with thc intcntion of irnproving thc quality of life of individuals who are vital to thc cconomic sustainment of thc count1)'.. In anothcr aspcct charactcristic of thc unskillcd labor force, is thc growmg number of illcgal workers residing in the UAE. It's an intercsting phenornenon becausc contrary to what happens in other parts of the world where illcgal irnmigration irnplies that an individual entcrs a foreign country contra1y to stipulated laws, in the UAE this takcs place once the forcigner enters legally into the country ami then decides to stay after the original contract has ended.. lt is not easy to arrive illcgally into the UAE sincc the country is surroundcd by descrts and seas, but it is to stay there after a given labor agreement has ended. The business owner is required to cancel the employee's sponsorship and residence visa if the cmployee resigns, or should the employer termínate his or her service. 1Jowever, the sponsor or employer does not always assure thcmselves that the worker is repatriated back to their home country. What this situation entails, is that unskilled illcgal worker with an expircd working permit who decided to stay and work illcgally, will face harsher labor conditions and will be easily exploited.. 3.5 Cultural Assimilation betwccn thc forcign work force and the local Emirati socicty. In the social and cultural spectmm thc arrival in the United Arab Erniratcs of such large amounts of immigrants has had its toll in thc ovcrall intcraction bctwccn local Emiratis ami thc divcrsc forcign population. Irnmigrants naturally bring with thcm thcir local customs, traditions, rcligion and languages, and in severa! cases they dccply contras! with those locally acceptcd.. 36.

(37) New cultures habits havc becn introduccd to the traditional Arab UAE lslamic culture in tenns of clothing, business practiccs and cven personal activitics like kissing in public or holding hands, which are not allowcd by law in thc rcgion.. Furthcrmore, thc loss of thc Arabic identity gives room for conccm for local governmcnt officials and traditional Emirati membcrs of society. The use of the Arabic languagc on a day to day basis is decrcasing, cspccially bccausc the vast cxpatriatc community docs not speak it. Thus, English is now thc common languagc amongst the worldly UAE society. Evct)'Whcre you go ami in any place of business in any main city in the Emirates the use of [nglish will be dominant.. Also, rcligion is an arca in which cultural assimilation has becn cspccially difficult. In 1985, out of a total of 683,825 people in the UAE's workforcc, about 71.6 per cent were Muslim and were divided among the various Islamic denominations. Another 17.5 per cent of Lhc labor force was divided among H indus, Buddhists and Confueianists, and about 10.9 per cent were Christians. 81 This is a countt)' where you can still find a Mosque every few kilomcters and where eall to prayer is heard 5 times a day in every comer ofthc country.. The effect of these interactions has been the formation of integrated identities among the irnmigrant groups, both in rclation to each other, as to the UAE citizens. Hence the course of this exchange and socialization has impacted ali seetors of society and even more so now with the reeent emcrgence of the European and American intluxcs.. 81. · Kaz1111, p.3 71. 37.

(38) 3.6 Forcign labor force in thc Dcvclopment of thc UAE. Although the UAE's development began in the mid 70's, the true revolution and expansion carne until the 1990's with a series of initiatives and mega projects to enhance the local cities and position the Emirates worldwidc. With buildings likc thc Bu1j Al Arab, the sail shaped hotel whieh epitomizcs Dubai, the construction of an indoor ski slopc and the establishment of diverse "cities" like the Dubai Media, Internet and Ilcaltheare City to promote diverse sectors in the region, havc ali positioncd the Emirates as one of the top world hubs around the globe.. This volume ami speed of progress have only eontinued and increased over the years. The Emirates economy has proven that diversifieation from oil can be successfully achieved and that finance, tourism and service sectors can be tumed into engines of growth.. The amazing transfonnation of the Emirates and more so of the Emirates of Dubai and Abu Dhabi has depended and will continue to require the working hands and knowledge of foreign laborers, especially if the construction and development plans continue thc way they have been going in the past years.. The current ruler of Dubai and Vice-Presiden! of the U/\E Shcik Muhammad Bin Rashid Al Maktoum, has frequently stated that what been achieved thus far is only the beginning. 1-Ie has sole handedly promoted engineering tasks like the "Palms", palm tree-shaped manmade islands off the coast of Dubai that houses residcnces; the "World", an archipelago of 300 more islands four kilometers off the coast of Dubai which form a world map and were sold as individual property for prívate houscs and shops and the Burj Dubai, thc world's tallcst building measuring more than 800 meters high.x 2. º' "Rcshaping thc U/\E: how thc landscapc will look in 2009"'. Emiratcs Business 24/7. Saturday January 5, 2008. p. 8-9. 38.

(39) Other advaneements Lhat can be listcd are the Dubai Exhibition City to be completed in 2009, which will be the worlds largest display space and it will include hotels, restaurants ami residential apartments; Meydan Racecourse which will be ready in late 2009 and will be the biggest racing eomplex in the world housing hotcls, restaurants, a museum, a business park and an 18-hole golf course. Also, Al Runwaya Golf Course, the first course designed by Tiger Woods that will cover an arca of 25.3 rnillion square fcet in Dubailand, and will include a 600,000 square-foot clubhouse, hotel and 20 residcntial mansions; Atlantis Hotel a 1,536-room resort, Al Ain Wildlifc Park; a Culture Village, and even a Metro System in Dubai City. 83 Endless developrnent projects are projects which at their very base have the labor of foreign workers.. As far as the different industries, ali of which are moving forward, the tourism sector is probably Lhe one where the local government is conccntrating Lhc most. By 201 O, Dubai alone cxpects 15 million business and lcisure visitors to contribute 20 per cent of the GDP. 8~ This is the reason why the Emirati government has been so keen in building worldly attractions like a Guggenheim in Abu Dhabi expected to open in late 2011, 85 anda Louvre in the same eity contemplated for 2012. 86 Severa! seven star hotels are currently being built, international brands are opening businesses in the region and with the opening of two Emirate airlines the expansion seems to be complete.. Locally established Etihad Ainrnys and Emirates have facilitated the UAE's expansion and linkage to every part of the world. Thesc two local airlines fly direct to countries in evcry continent, including the recent direct Sao Paulo, Brazil - Dubai ílight. 87 Actions like these will surcly facilitate travel and make thc region even more accessiblc to evcry person no matter thcir religion, distance from or cultural background.. x., "Rcslrnping lhc UAE: how lhe landscape will look in 2009"'. Emirates Business 2417. Salurday Janua1y 5, 2008. p. 8-9 8 < "Dh l 3lrn boosl for lhe Middlc East". Emiralcs Business 2417. Tlrnrsday January 3,2008, p. 39 "h11p://www.cbc.ca/arls/s1ory/2006/07/08/guggcnhcim-abudhabi.html (dale last consulted- April 22. 2008) 8 "!111p://v,;ww .uaeintcracl.com/docs/U A E_ signs _opcralional __ struclurc _of_ Louvre _museum _ in_A bu_ Dhabi/28 134.hun (dale last consullcd- April 22, 2008) xi http://www.cmira1cs.co111/ (dale lasl consulted- April 22, 2008). 39.

(40) 3.7 Thc participation of thc UAE in labor-oricntcd mcchanisms. Onc of the main challcnges in the labor sector that the United Arab Emiratcs has becn confronted with, much in part dcrived lrom the econornic boom and dcmographic structure it has expericnccd in rcccnt ycars, is thc compliancc with intcmational labor regulations and nonns.. The UAE has adhcred to a series of international labor-focused mechanisms, organizations ami treaties, but has not focuscd on thc rights of thc vast population of forcign workcrs in its territory. Although it now is part of the lnternational Labor Organization, Thc Global Compact and thc Arab Labor Organization arnong othcrs, thc count1)' has not signed thc Unitcd Nations lntemational Convcntion on the Protection of the Rights of Ali Migrant Workers and Mcmbers of Their ramilics; a vital instrumcnt lar thc protcction of thc millions of foreign laborcrs in thc region.. Thc UAE bccame a mcmber of thc lntcmational Labor Organization (ILO) in l 972 aftcr obtaining its indcpcndcnce from Grcat Britain. This United Nations organization founded in 1919 sccks thc prornotion of social justicc and intcrnationally rccognizcd human and labor. rights through the following four stratcgic objcctivcs: thc promotion and rcalization of standards and fundarncntal principies and rights at work; thc crcation of grcatcr opportunitics for womcn and mcn to se.cure dcccnt cmploymcnt and incomc; to cnhance thc covcragc and cffectivencss of social protcction for ali; and to strcngthcn tripartism and social dialoguc. 88 Givcn thc UAE has no workcrs' organizations or unions; it secms difficult to promotc social dialogue on thc !LO suggcsted tripartite basis.. As for othcr rclated framcwork, sincc becoming a mcmber of thc !LO thc UAE has ratificd ninc !LO Convcntions: Hours of Work (JndustI)') Convcntion; Forccd Labor Convcntion; Labor Inspcction Convention; Night Work (Womcn) Convcntion; Equal Rcmuncration. xx 11·ww.ilo.org (date last consultcd- May 20, 2008). 40.

(41) Convcntion; Abolition of Forccd Labor Convcntion; Discrimination (Employmcnt and Occupation) Convcntion; Mínimum Agc Convcntion, and thc Worst Forms of Child Labor Convcntion.. Thus, in compliancc with thcsc international instruments, although the UAE has pul forward and implcmentcd tcchnical coopcration activitics such as training programs, scminars and workshops in accordancc to thc ILO statucs, therc is yct much work lcft to be done in favor of thc rights of forcign workcrs.. In a more regional sctting, in 1965 the UAE becomc part or thc Arab Labor Organization (ALO), loeated in Egypt, and has sincc ratified two Arab Labor Organization conventions: Convcntion No. 18 of 1996 on Thc Employmcnt of Minors and Convcntion No. 19 of 1998 on Labor Inspcction. Thc J\LO has a writtcn J\grccmcnt from 1976 with the ILO through which thcy plcdgc technical assistancc and mutual coopcration. Thc Arab Charter has the objcctivcs of strengthcning co-opcration betwecn its Mcmbcrs in achieving social justicc, raising thc workcrs' living standards and cnsuring thcir material and moral welfarc in frccdom, dignity and cquality of opportunity.~ 9. Another important stcp towards insuring the labor rights of national and foreign workcrs was takcn by local prívate companies which adhcred to the United Nations Global Compact, an intcrnational initiative conjoining UN agencies, prívate businesscs, labor and civil society to support cnvironmcntal and social principies.. Thc Global Compact is a complctcly voluntary framcwork for busincsscs that are committed to aligning their opcrations and stratcgics with ten univcrsally acccptcd principies in thc arcas of human rights, labor, thc environmcnt and anti-corruption. As for labor, this initiativc statcs that busincsscs should uphold thc frcedom of association and thc cffcctive rccognition of thc right to collcctivc bargaining; thc climination of ali forms of. 89. http://www.ilo.org/public/cnglish/burcau/lcg/agrccmcnts/alo.htm (date last consulted- May 20, 2008). 41.

(42) forced and compulsory labor; the effectivc abolition of child labor; and the elimination of discrimination in respcct of employment and occupation.. 90. To the year 2008 and since this initiative was first introduced to the UAE in the beginning of 2006, 20 major companies based in the UAE in various sectors such as construction and engineering, education, telecommunieations, finance and real estate, have voluntarily adhered to the Global Compact; thus insuring the raising of awarencss, education and building capacity in key sectors on issues related to corporate social responsibility.. 91. A for the rights of womcn workers ''lile U/\E govcrnment has pmceeded to draft a law that governs the relation bet,veen domestic hclp and houschold employcrs. This law \Vill be guidcd by intcrnational stalldards and practices ami is onc of the first of its killd in thc region. Thc ncw initiati\c will particularly bencfit v,·omcn. who are kcy conccrn of thc UAE as part of thc state's obligations undcr the Convcntion. 011. the Elimination of Ali. Forms of Discrimination against Womcn (CEDA \V)".'". The UAE is slowly adopting measures in favor of foreign workcrs, thc UAE 2007 Labor Rcport outlines how labor rights are being addrcssed in the Emiratcs and it details the spccific actions that havc becn and are currently bcing undertakcn by thc governmcnt in such a complex society. The report states thal "the lJAE relies. 011. an evcr incrcasing number of tcmporary foreign. workcrs lrom labor- exporting nations. Ministry of Labor rccords show that the expatriare workforce is madc up of nationals from 202 countries. The UAE is continuing to evolvc its legal standards and enforcement policies to accommodate this fost-growing population. The UAE is designing laws ancl policies ... --'n. 0 " 91. www.unglobalcompact.org (date last consultcd- May 20. 2008) http://www.unglobalcompact.org/NctworksAroundThcWorld/country_ contact/uac.html ( date las! consulled- May 20,2008) 02 UAE Labour Rcport 2007 '') UAE Labour Rcport 2007. 42.

(43) Although thc cfforts madc by thc local Emiratc: govc:rnmcnt in tcrms of labor-orirntc:d rcgulations ami rcforrn, it's importan! to mcntion that thc majority ofthc labor lavvs work in favor of thc national workcrs ,vhich rcprcscnt a minority in thc total labor force:. Littk has bccn done to protcct thc: rights of forcign ,vorkcrs andas it's cvidcnt, thc UAE will nccd to cxpand its capacity to truly cnforcc thc: currcnt labor laws it has in place and adopt newcr oncs that comply wilh intcrnationa[ standards ancl rcgulations on thc matter.. 43.