Research on the six economies of the Gulf Cooperation Council
Category: United Arab Emirates
The United Arab Emirates, ‘the UAE,’ or simply ‘the Emirates,’ is at the eastern end of the Arabian Peninsula. It is a federal elective monarchy made up of seven emirates, with Abu Dhabi serving as its capital. The seven Emirates are: Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah. The UAE shares land borders with Oman to the east and northeast, and with Saudi Arabia to the southwest; as well as maritime borders in the Persian Gulf with Qatar and Iran, and with Oman in the Gulf of Oman. As of 2025, the UAE had an estimated population of 12.2 million, of which just one million were Emiratis. Thus, less than one in ten individuals in the UAE have claims to the country’s sovereign wealth.
The UAE and Saudi Arabia are now in blatant competition with one another. Competition is healthy, many will contend and this can be true but, if and when the times are more difficult such competition could become cut throat.
In 2018, The Economist explained the following in a piece with the following bi-line “An oasis for the tax-averse beckons in the Middle East”
More than 100 countries have signed up to the Common Reporting Standard (CRS), which requires them to swap information on account-holders that may be relevant for tax purposes. But the enterprising and tax-shy can still exploit loopholes in the system. A popular one is to procure residence in the United Arab Emirates (UAE), set up a company there and use the tax residence that comes with it to block the flow of information to tax authorities elsewhere. … Under the CRS (which is managed by the Organisation for Economic Co-operation and Development), banks must share information with the country where an account-holder is tax-resident. If the account holder is an entity, then the bank must look through it to the “controlling person” and report on that individual. In the UAE, since both the individual and the company have local tax residence, neither need fear having any information passed on to other countries, regardless of whether their money is held in a bank account, a trust or an investment fund.
Add to this that the UAE is largely tax-free and is likely to have to remain ‘mostly’ tax-free to retain its advantage over Saudi Arabia.
The Arabian peninsular seeks to become a default holiday destination
Its not just Dubai anymore.
Destination DohaDrift by Dhow; the Gulf’s once ubiquitous sail boats whose name may have come from the Persian for “small ship” (dawah) or from the Swahili for “vessel” (daw)
No longer just for pilgrimsLots to see, e.g., the UNESCO Al-Hijr monuments that date back to Nabataean civilizationTablet magazine in Jeddah, Saudi Arabia (Photo: Andrea Bruce)
And while it is no longer ‘just’ Dubai, it, Abu Dhabi and most other of the seven Emirates are all vying for tourists. It is said that the UAE will soon have a number of casinos. As it stands, and as I wrote recently, the UAE is the Middle East’s most popular destination be it as a conference location, convention centre or indeed holiday destination (Rutledge, 2023; 2024).
Some 21.5 m tourists visited in 2019 (UNWTO, 2023), a striking number considering that there are only around one million Emirati citizens (see: Arabian Gulf data). The meteoric growth in visitors is largely due to a proactive government strategy of infrastructural investment and destination brand-building (see, e.g., Chen and Dwyer, 2018). As Thani and Heenan (2017) state, in order to attract tourists the UAE has undergone some, “eye-catching transformations.” Notable amongst the cultural zones and theme park hubs are the world’s tallest structure (Burj Khalifa), biggest mall (The Dubai Mall), only seven-star hotel (The Burj Al Arab) and a satellite branch of France’s Louvre museum (Wippel, 2023). State controlled oil rent has facilitated the creation of two of the world’s largest airlines and airport hubs—Emirates and Etihad (DXB and AUH). In terms of marketing the UAE as an “escape to the sun” location, London’s English Premier League football club Arsenal, wear Emirates shirts and play home games at “Emirates stadium;” Manchester City wear Etihad shirts and play their home games at “ Etihad stadium” (Millington et al., 2021).
Chen, N., & Dwyer, L. (2018). Residents’ Place Satisfaction and Place Attachment on Destination Brand-Building Behaviors: Conceptual and Empirical Differentiation. Journal of Travel Research, 57(8), 1,026–1,041. https://doi.org/10.1177/0047287517729760
Millington, S., Steadman, C., Roberts, G., & Medway, D. (2021). The tale of three cities: Place branding, scalar complexity and football. In D. Medway, G. Warnaby, & J. Byrom (Eds.), A Research Agenda for Place Branding (pp. 131–149). Edward Elgar Publishing. https://doi.org/10.4337/9781839102851.00017
Rutledge, E. J. (2023). The tour guide role in the United Arab Emirates: Emiratisation, satisfaction and retention. Tourism and hospitality research, 23(4), 610–623. https://doi.org/10.1177/14673584221122488
Rutledge, E. J. (2024). The tour guide profession: An attractive option for UAE nationals majoring in tourism? Tourism and hospitality research, 0(online first), 1–12. https://doi.org/10.1177/14673584241278451
Thani, S., & Heenan, T. (2017). The UAE: A Disneyland in the desert. In H. Almuhrzi, H. Alriyami, & N. Scott (Eds.), Tourism in the Arab World: An Industry Perspective (pp. 104–117). Routledge. https://doi.org/10.4324/9781315624525
Wippel, S. (Ed.) (2023). Branding the Middle East: Communication Strategies and Image Building from Qom to Casablanca. De Gruyter. https://doi.org/10.1515/9783110741100
Dubai epitomises the Gulf’s property market. It did suffer a massive correction back in 2009 (Collinson, 2009), the Emirate needed to borrow several billion from Abu Dhabi (Davidson, 2009) but, that debt has been repaid and today the sector is once again booming (Maccioni, 2024).
Hard labour in QatarHard labour in the UAE.
A dream foreclosed (?)
The following was penned by Davidson in 2009; at the tail-end of the 2003–2008 period in the Emirate of Dubai (UAE) which was described by Bertrand (2012) as “the world’s most massive real estate bubble.”
Glitzy Dubai, long considered the new Monte Carlo or the Las Vegas of the Middle East, has suffered one of the worst crash landings of this global recession. Dubai might be considered a bellwether of the global credit crunch. Until recently touted as a beacon of progress in an otherwise unstable region, the tiny emirate’s seemingly innovative economic and political model is now unravelling, with no end in sight to the uninterrupted stream of bad news. Construction has ground to a shuddering halt, unemployment is rising, sovereign debt is exposed, lawsuits are being prepared, and the population is decreasing, as those who moved to Dubai in search of a better life have either lost their jobs or are cutting their losses and leaving. To make matters worse, as the city empties itself out, traffic thins, and cars and credit cards are abandoned at the airport, the embattled authorities have embroiled themselves in fresh controversies by introducing protectionist policies for their citizens and a new media law that forbids criticism of the economy, and earning Dubai an anti-Semitic branding in the sports world by denying a visa to an Israeli athlete. With investor confidence in tatters and debt repayments looming, its humiliated rulers have had little choice but to turn to their wealthier neighbors. But although help has finally arrived, it is by no means the lifeline that the emirate really needs, and Dubai’s future hangs in the balance.
Only time will tell for history is history (unendingly so). The digitisation of everything is as good as it is bad. One’s predictions and forecasts, with hindsight and internet indexing, can come to be seen as having been too hubristic (one could counter that they were just thinking and writing in a heuristic fashion).
In the same year as Davidson wrote the above, Lewis (2009) said the following. “A six-year boom that turned sand dunes into a glittering metropolis, creating the world’s tallest building, its biggest shopping mall and, some say, a shrine to unbridled capitalism, is grinding to a halt.” And that, “half of all the UAE’s construction projects, totalling £400 billion, have either been put on hold or cancelled, leaving a trail of half-built towers on the outskirts of the city stretching into the desert.”
Red hot (once more)
In a recent piece for the London-based Financial Times, it was said that if you want to “escape the global gloom, just take a flight from its epicentre, London, to any leading capital of the Gulf” Sharma (2022). “Dubai is enjoying yet another real estate boom. Regional rivals like Riyadh are racing to be the next Dubai, funnelling oil profits into property mega-projects.” Sharma also suggests that many of the Gulf leaders do “recognise that a boom built on high oil and property prices is unlikely to endure, but that age-old problem can wait.”
In 2023 The Economist wrote that while Dubai’s property market has much to recommend it (low taxes and a large pool of renters), some wonder if the sector, “the backbone of Dubai’s economy, is again becoming a bubble.” The Emirate has already endured two real estate crashes this century: “an abrupt one during the financial crisis in 2008, when property values fell by half, and a slower one from 2014 to 2020, when they slid by 35 per cent.”
Hanieh, A. (2018). Money, Markets, and Monarchies: The Gulf Cooperation Council and the Political Economy of the Contemporary Middle East. Cambridge University Press.
Renaud, B. (2012). Real Estate Bubble and Financial Crisis in Dubai: Dynamics and Policy Responses. Journal of real estate literature, 20(1), 51–78. https://doi.org/10.1080/10835547.2012.12090313
It looks like an image from science fiction: a 262m-tall lighthouse-style tower rising from the centre of hundreds of concentric circles of shining panels. But, if all goes to plan, these ambitious design renderings will become science fact, as the fourth development phase of Dubai’s colossal $14bn solar power park.
VirtualRealitySheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, at the MBR Solar Park (24 November 2020)That’s 10,943,945,000 pounds sterling (£).
Images @ Dubai Electricity and Water Authority
In the fossil fuel-rich Gulf, however, the Mohammed bin Rashid al-Maktoum Solar Park, as it is known — which was begun in 2013 and is largely up and running — remains an outlier. Overall, the region’s renewable energy investments have lagged behind China, the US and Europe.
In its 2024 report on energy investment, published this month, the International Energy Agency said the broader Middle East, including countries such as Iran and Iraq, was allocating just 20 cents to renewable energy investment for every dollar spent on fossil fuels — or one-tenth of the global average. The IEA added that, of the $175bn the region was expected to invest in energy projects this year, just 15 per cent would go to clean energy.
The oil and gas reserves sitting below the Gulf states have previously discouraged any rapid development of renewables. “The Gulf countries are blessed with a vast amount of resources of oil and gas,” notes Aisha al-Sarihi, research fellow at the National University of Singapore’s Middle East Institute. “That has made access to energy very affordable … and eliminated the need for alternatives.”
Electricity was previously powered by oil in large part. But downward pressure on oil prices from increased US shale oil triggered a shift in the mid-2010s, making gas and renewables more viable as more oil supplies were reserved for export, says Karen Young, chair of the Economics and Energy Program Advisory Council at the Washington, DC-based Middle East Institute.
During that period there was a “ramping-up of the kind of fiscal-side reforms on spending”, says Young, and the “beginning of talking about reduction of subsidies of gasoline, of electricity prices, water prices”.
Even as the wealthy Gulf nations have become more aware of the need to decouple their economies from oil, the United Arab Emirates’ hosting of the COP28 climate meeting last year encapsulated the paradoxes that surround the Gulf states’ role in the energy transition.
On the one hand, the Dubai COP ensured that producer countries were at the centre of the negotiations, with oil-rich emirate Abu Dhabi — the UAE’s capital and centre of political power — wanting to expand fossil fuel production. On the other, Dubai, for the first time, secured a deal to transition away from fossil fuels, and the UAE set aside $30bn for a “catalytic climate investment fund”.
Although the transition from fossil fuels in many industries could theoretically reduce demand for crude oil, the Gulf states do not view this as an existential threat to their revenues.
“The producers in the Gulf see a different scenario — and particularly a lifeline through petrochemicals — [in which] there will be sustained demand for their product for at least the next 20 years,” says Young.
The Gulf states “believe they will be the last man standing because they will sell the lowest carbon intensity fuel in the future”, adds al-Sarihi, on the basis that compared with other sources of oil, those in the region require the least amount of energy to extract.
However, at the same time, economics and strategic interests are galvanising petrodollar-financed renewable energy investments by the Gulf. This spending is led by the UAE and Saudi Arabia, which are actively working to diversify their economies and reduce their dependence on fossil fuels.
The Gulf states have a “dual approach” to the energy transition, according to al-Sarihi. “One is to continue with the fossil fuel industry and … invest in clean energy technologies and other resources like hydrogen,” she says.
“The Gulf states are taking advantage of the international arena when it comes to the energy transition,” adds al-Sarihi. “They use it as a platform to exert their energy diplomacy and influence in a way that makes the energy transition serve their interest … they try to secure a market for their energy supplies. They are now pivoting to Asia because it is becoming the centre of demand for energy.”
But the autocratic states are not investing very widely across the energy transition, points out Robin Mills, Dubai-based chief executive of consultancy Qamar Energy. There has been scant movement towards decarbonising in transport or industrial sectors, for example. “The real investments have been around the power sector — solar and nuclear,” Mills says.
For example, the UAE’s Barakah nuclear plant will meet up to a quarter of the country’s electricity needs by the time all four of its reactors are fully operational. And, in Saudi Arabia, while just 0.2 per cent of the electricity was generated by renewables in 2022, according to US government statistics, solar power plants have been built, including the 1.5GW capacity Sudair.
The Gulf states are also investing in clean power in other countries, from central Asia to central Africa. Young highlights Masdar, Abu Dhabi’s renewable energy investment vehicle, and Saudi’s national champion ACWA Power as “two of the most important power developers in emerging markets in the world”.
“They’re competing and partnering with the biggest infrastructure investors in the world, she observes. “They’re doing this in ways that I think have enormous soft power, political influence.”
UAE state oil company CEO, Sultan Al Jaber. AP Photo/Kamran Jebreili
The United Arab Emirates (UAE), the world’s seventh largest oil producer, will host the 28th UN climate change summit (COP28) in Dubai from November 30 to December 12. Presiding over the conference will be the chief executive of the UAE state-owned oil company Adnoc, Sultan al-Jaber.
Given fossil fuels account for nearly 90% of the carbon dioxide emissions driving climate change, many have argued that there is a clear conflict of interest in having oil and gas producers at the helm of climate talks. The UAE is alleged to flare more gas than it reports and plans to increase oil production from 3.7 million barrels a day to 5 million by 2027.
Some contend that the oil and gas industry could throw the brake on greenhouse gas emissions by investing its vast revenues into plugging gas flares and injecting captured carbon underground. But independent assessments maintain that the industry will need to leave at least some of its commercially recoverable reserves permanently underground to limit global warming. No oil-exporting country but Colombia has yet indicated it will do this.
Dubai appears determined to undermine even this small victory. An investigation has released documents showing the UAE hosts planned to advise a Colombian minister that Adnoc “stands ready” to help the South American country develop its oil and gas reserves.
The UK invited ridicule by expanding its North Sea oil fields less than two years after urging the world to raise its climate ambitions as summit host. The UAE seems destined for a similar fate – before its talks have even begun.
Citizens are used to driving gas-guzzling cars with fuel priced well below international market rates and using air conditioning for much of the year thanks to utility subsidies. Visiting tourists and conference-goers have come to expect chilled shopping malls, swimming pools and lush golf greens that depend entirely on energy-hungry desalinated water.
Despite decades of policies aimed at diversifying the country’s economy away from oil, the UAE’s hydrocarbon sector makes up a quarter of GDP, half of the country’s exports and 80% of government revenues. Oil rent helps buy socioeconomic stability, for instance, by providing local people with public-sector sinecures.
An oil field within the Arabian Desert, near Dubai. Fedor Selivanov/Shutterstock
This state of affairs is a central tenet of the Arabian Gulf social contract, in which citizens of the six gulf states mostly occupy bureaucratic public sector positions administering an oil-based economy with expatriate labour dominating the non-oil private sector.
Adnoc, along with the wider oil and gas industry, has invested in carbon sequestration and making hydrogen fuel from the byproducts of oil extraction. According to the Intergovernmental Panel on Climate Change (IPCC), such measures, even if fully implemented, will only have a small impact on greenhouse gas emissions.
The UAE was the first in the Middle East to ratify the Paris climate agreement and to commit to net zero emissions by 2050. With near limitless sunshine and substantial sovereign wealth, the UAE ranks 18th globally per capita and first among Opec countries for solar power capacity. Solar now meets around 4.5% of the UAE’s electricity demand and projects in the pipeline will see output rise from 23 gigawatts (GW) today to 50GW by 2031.
The Barakah nuclear power plant (the Arab world’s first) started generating electricity in 2020. While only meeting 1% of the country’s electricity demand, when fully operational in 2030, this may rise to 25%.
The oil sector is inherently capital-intensive, not labour-intensive, and so it cannot provide sufficient jobs for Emiratis. The UAE will need to transition to a knowledge-based economy with productive employment in sectors not linked to resource extraction.
In the UAE, sovereign wealth fund Mubadala is tasked with enabling this transition. It has invested in a variety of high-tech sectors, spanning commercial satellites to research and development in renewable energy.
But even if the UAE was to achieve net zero by some measure domestically, continuing to export oil internationally means it will be burned somewhere, and so the climate crisis will continue to grow.
Self-interest
Is disappointment a foregone conclusion in Dubai? Already one of the hottest places in the world, parts of the Middle East may be too hot to live within the next 50 years according to some predictions.
Dubai’s tourist economy will be difficult to sustain as the climate crisis intensifies. Andrew Deer/Alamy Stock Photo
Rising temperatures risk the UAE’s tourism and conference-hosting sectors, which have grown meteorically since the 1990s (third-degree burns and heatstrokes won’t attract international visitors). A show-stopping announcement to further its global leadership ambitions is not out of the question.
At some point, one of the major oil-exporting countries must announce plans to leave some of its commercially recoverable oil permanently untapped. COP28 provides an ideal platform. A participating country may make such a commitment with the caveat that it first needs to build infrastructure powered by renewable energy and overhaul its national oil company’s business model to one that supplies renewable energy, not fossil fuel, globally.
The UAE has the private capital and sovereign wealth required to build a post-oil economy. But will it risk being the first mover?
Here’s a few of the articles I’ve had published with Middle East Policy:
Wiley Online Library (2020, September 12)
A
Lekhraibani, R., Rutledge, E. J. & Forstenlechner, I. (2015). Securing a dynamic and open economy: the UAE’s Quest for Stability, Middle East Policy, 22(2), 108–124. https://doi.org/10.1111/mepo.12132 🗒 Abstract etc.
An oasis for the tax-averse beckons in the Middle East
THE war on cross-border tax evasion, declared by America over a decade ago and since joined by other governments, has made life a lot more uncomfortable for anyone looking to squirrel away undeclared income. More than 100 countries have signed up to the Common Reporting Standard (CRS), which requires them to swap information on account-holders that may be relevant for tax purposes. But the enterprising and tax-shy can still exploit loopholes in the system. A popular one is to procure residence in the United Arab Emirates (UAE), set up a company there and use the tax residence that comes with it to block the flow of information to tax authorities elsewhere.
According to experts with knowledge of the scheme, it works as follows. A foreigner sets up a company in one of the UAE’s free-trade zones and rents office space. In return he gets a residence visa with a minimum-stay requirement of just one day every six months. Both the individual and the company, through which he may hold bank accounts, may then claim tax residence in the UAE, a country that levies no income tax.
Under the CRD, banks must share information with the country where an account-holder is tax-resident. If the account holder is an entity, then the bank must look through it to the “controlling person” and report on that individual. In the UAE, since both the individual and the company have local tax residence, neither need fear having any information passed on to other countries, regardless of whether their money is held in a bank account, a trust or an investment fund. And, of course, there is no local tax to pay.
No other haven works quite like this. Others, even Caribbean islands which have held out against the CRS, say foreign-owned enterprises and the people who control them cannot be tax-resident there. Under CRS rules, the firms are deemed to be resident where they are managed from. In the UAE, however, foreign-owned entities are permitted to be tax-resident, even though the owner would normally be tax-resident elsewhere.
The UAE’s documentation system also makes it easier for people to avoid tax inspectors. When dealing with banks, clients need to produce a Tax Identification Number (tin). This number is particularly important for any company that holds an account because it serves as an identifier for tax-information exchange between governments. Since the UAE levies no income tax, it does not issue tins. Instead, the experts say, it hands out registration numbers for value-added tax, which it does levy. Clients then try to pass these off as genuine tins to bolster the claim that they are tax-resident in the UAE. The ruse appears to be working. Whether because they cannot tell the difference or are turning a blind eye, many banks in other countries, when presented with the VAT-linked substitute tins, accept that the client’s tax affairs are a matter for the UAE and therefore do not pass information on to other countries.
Compared with most offshore tax-minimising schemes, this one is cheap. In the UAE, companies can be formed, office space rented and residence acquired for “the price of a decent suit and pair of shoes”, says an adviser. Unlike in most other countries that sell residence rights, a donation or property investment in the hundreds of thousands or millions of dollars is not a prerequisite for a visa.
The country’s first free-trade zone was established in the mid-1980s. It now has more than 40, with tens, perhaps hundreds, of thousands of companies between them. Ras al-Khaimah, one of the country’s seven emirates, has over 14,000. The number of UAE firms being used as vehicles to dodge tax is impossible to determine. “Judging by the talk among tax and wealth advisers, it’s many thousands,” says a tax expert.
The Organisation for Economic Co-operation and Development (OECD), which oversees the CRS, is worried about the tax-dodging possibilities of residence-for-sale schemes. Pascal Saint-Amans, head of the OECD’s tax group, says the UAE is a concern and argues that the country has not been “proactive” in curbing abuse. The UAE finance ministry replies that it is “committed to implementing international economic standards to the highest levels of [tax] transparency” and is “actively working with the international community” on data exchange. Asked to comment, the Ras al-Khaimah free-trade zone did not reply.
The OECD will unveil some new policies this year, says Mr Saint-Amans. These could include making banks ask tougher questions of anyone claiming to be tax-resident in a haven. Banks could be required, for example, to run through a list of questions to establish where a client’s personal and economic links are strongest: where he spends most of his time, where his children go to school, where his doctor is and so forth. In cases where banks see evidence of discrepancy, they could be required to send account information to all countries with a possible claim on the client’s tax domicile. Until then, the Gulf state will remain a tax-dodgers’ oasis.
Giving private sector jobs the required significance; only such a dramatic image makeover can attract more UAE nationals to it
The Federal Authority for Government Human Resources gave research on Emiratisation a boost by launching an annual award for scholarly work on the UAE labour market and human resources. This is a timely incentive because oil prices seem destined to remain some way off on their 2010—14 highs, and comfy government jobs are said to be a thing of the past.
Among the wining studies was one conducted by the UAE University; it was the first large-scale study to investigate the views of UAE nationals working in the private sector and polled 653 individuals. The survey included questions related to job satisfaction and also on context-specific sociocultural sentiments such as the prestige attached to a public sector job.
Indeed the UAE’s labour market’s distortions and segmentations cannot be fully understood, let alone addressed, without such issues being factored into the equation.
The research found that it was “salary and benefits” that most significantly and positively predicted the intention of Emiratis to continue working in the private sector, while “sociocultural influences” — societal attitudes on a given occupation’s prestige and status level — had the most significant negative effect and was likely to deter Emiratis from staying in the private sector.
In other words, money does still talk. However, employee satisfaction isn’t all about money, “training opportunities” and the “nature of job” also writ large. The latter finding is of importance because it implies, at the very least, that today’s graduates do see private sector occupations as more interesting and fulfilling, if compared to the more bureaucratic-style ‘classic’ public sector jobs.
However, as evidenced by the research, it continues to be the case that “classic” public sector positions continue to attract the most status and prestige. This sentiment is even more pronounced among male employees, with male respondents significantly more likely to be adversely affected by sociocultural influences (the pride or prestige attached to public sector positions) and be less happy with the nature (or “environment”) of work in the private sector.
The research has applied policy relevance. The more closely aligned like-for-like public/private sector positions become in terms of salaries, working hours and days of annual leave, the more attractive will be private sector career paths. Such alignment — most likely by way of more extensive subsidies or top-ups for nationals working in the private sector — would help redress the current notion that it is the citizens who’ve secured government jobs that have the higher status. The findings also show that internship programmes — that are now compulsory at some federal universities — are paying dividends and recommends that more interns should be placed in the private sector as about one-third of those surveyed were working for private sector companies where they had completed their internships.
Another revealing find was the fact that almost three-quarters of the sample of UAE nationals employed in the private sector currently had other members of their immediate family working in the same sector. Therefore government policy that champions those Emiratis who take up non-conventional private sector career paths will help change prevailing societal attitudes in relation to what is, and is not, considered a suitable career path for Emiratis.
The study on private sector Emiratisation by Dr Emilie Rutledge and Dr Khaled Al Kaabi recently received the Federal Authority For Government Human Resources Award for the Best Academic Research in HR. Their study is timely in that it considers this topic in an era where comfy government jobs are said to be a thing of the past. In addition to this, their survey-based research—polling 653 individuals—is the first large-scale one to investigate the sentiments of UAE nationals actually working in the private sector. While basing their research on the notions of the Theory of Planned Behaviour and job satisfaction scales, they also factor in what are termed as context-specific sociocultural sentiments. They make the case that the UAE’s labour market distortions and segmentations cannot be fully understood, let alone addressed, without such issues being factored into the equation. As Dr Rutledge says, “employee satisfaction isn’t all about money, the benefits of even the nature of the work and relations with fellow workers, societal attitudes on a given occupation’s prestige and status levels also writ large.” As evidenced by their findings and analysis, it continues to be the case that ‘classic’ public sector positions continue to attract the most status and prestige. This sentiment is even more pronounced amongst the male survey participants.
Another issue that the study highlights is the difficulty face in defining exactly what constitutes the private sector. In a region who’s labour markets are characterised by being highly distorted and segmented along public/private and national/non-national employee lines, the division between public and private entities is often hard to determine. As Dr Al Kaabi explains, it was necessary for their study to include government-backed entities as quasi-private ones as this is what society considers them to be. While some labour market economists would classify these within the government sphere, in the UAE at least, many in this category are commercially-run and, “really do now manage their human resources as if they were genuine private sector operators.”
The study found that it was ‘salary and benefits’ that most significantly and positively predicted continuance intentions (β = .399, p < .001) while ‘sociocultural influences’ most significantly and negatively predicted continuance intentions (β = -.423, p < .001). In other words, money does still talk. These observations also suggest that the more closely aligned like-for-like public/private sector positions become in terms of salaries, working hours and days of annual leave, the more attractive will be the private sector career paths. The authors of this study both contend that such alignment—most likely by ay of public sector pay freezes than pay cuts—would help redress the current notion that it is the citizens who’ve secured government jobs that have the higher status. Other job satisfaction related constructs that had a significant impact on the degree to which individuals planned to continue working in the private sector were: ‘training opportunities’ were a positive factor (β = .163, p < .001) and interestingly, the ‘nature of job’ (β = .072, p .009). The latter finding is of importance because it implies, at the very least, that today’s graduates do see private sector occupations as more interesting and fulfilling (if compared to the more bureaucratic-style ‘classic’ public sector jobs).
In terms of differences between the genders, male respondents were significantly more likely to be adversely affected by sociocultural influences pride (or “prestige) and were significantly less happy with the nature (or “environment”) of work in the private sector. With regard to age, the younger the respondent, the less likely they will be to intend to continue working in the private sector. The study’s authors argue that younger members of society are significantly more influenced by sociocultural barriers and least satisfied with the professional development opportunities on offer. They suggest that this may be due to the fact that they have relatively junior positions at the given private sector organisation. With regard to education, the higher one’s qualification is the more likely it will be that they intend to remain in the private sector. This ties in with the age-related differences, it follows that within the private sector the positions that require post-graduate qualifications will not only pay more but will also have attached to them more status.
Of perhaps most note and applied policy relevance are the following observations. Firstly, no less than one-third of those surveyed were working for private sector entities that they had actually competed their internships with. This suggests that the internship programs that are now compulsory at some federal universities in the UAE are paying dividends. The second observation is that almost three-quarters of the sample (that is UAE nationals employed in the private sector) currently have other members of their immediate family working in the same sector. As Dr Rutledge says, “any government policy that champions those individuals who take up non-conventional career paths will help change prevailing societal attitudes and norms in relation to what are and are not suitable career paths.”
