Running from taxation


References

Crisp, J., & Corfe, O. (2023, December 9). Inside the luxurious lives of the Russians of Dubai. The Daily Telegraph. https://www.telegraph.co.uk/world-news/2023/12/09/inside-the-luxurious-lives-of-the-russians-of-dubai/

The Economist. (2018, September 27). Sweet deserts. The Economist, 428(9111), 58. https://www.economist.com/international/2018/09/27/how-the-united-arab-emirates-became-an-oasis-for-tax-evaders

Troianovski, A. (2023, March 15). ‘Russia Outside Russia’: For Elite, Dubai Becomes a Wartime Harbor. New York Times. https://www.nytimes.com/2023/03/13/world/europe/russia-dubai-ukraine-war.html

Gulf greetings

The Arabian peninsular seeks to become a default holiday destination

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 (XX XX). 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).


References

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

The Economist. (2024). Call of the desert. The Economist, 452(9404), 71–72. Retrieved from https://www.economist.com/culture/2024/07/04/can-saudi-arabia-become-a-premier-tourist-hotspot

Strong men

Wood, G. (2022, March 3). Absolute Power. The Atlantic. Retrieved from https://www.theatlantic.com/magazine/archive/2022/04/mohammed-bin-salman-saudi-arabia-palace-interview/622822/

Worth, R. F. (2020, January 9). The M.B.Z. Moment. The New York Times Magazine. Retrieved from https://www.nytimes.com/2020/01/09/magazine/united-arab-emirates-mohammed-bin-zayed.html

Pelham, N. (2022, July 28). MBS: Despot in the desert. The Economist, 444(9307). Retrieved from https://www.economist.com/1843/2022/07/28/mbs-despot-in-the-desert

Pelham (2022); Wood (2022); Worth (2020)

Bubble, bust, boom

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).

Only time will tell and 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 and/or heuristic.


References

Bloch, R. (2010). Dubai’s Long Goodbye. International journal of urban and regional research, 34(4), 943–951. https://doi.org/10.1111/j.1468-2427.2010.01014.x

Collinson, P. (2009, May 26). Dubai suffers biggest house price slump. The Guardian. https://www.theguardian.com/money/2009/may/26/dubai-property-crash

Davidson, C. (2009). Dubai: foreclosure of a dream. Middle East report, 251(Summer), 8–13. https://www.jstor.org/stable/27735295

Maccioni, F. (2024, July 8). Dubai property market stays strong as demand from ultra-rich continues. The Independent. https://www.independent.co.uk/news/world/middle-east/dubai-property-market-luxury-homes-b2575845.html

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

COP & the UAE

First published in:

Academic rigour, journalistic flair


Rutledge, E. J., & Zabala, A. (2023, November 27). COP28: inside the United Arab Emirates, the oil giant hosting 2023 climate change summit. The Conversation. https://theconversation.com/cop28-inside-the-united-arab-emirates-the-oil-giant-hosting-2023-climate-change-summit-217859
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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.

Oil consumption & dependence

The UAE’s fast-growing population of 9.9 million (only 1 million are Emirati citizens) has the sixth highest CO₂ emissions per head globally.

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.

Tech-fixes, targets and the future

How does the UAE plan to cut its own emissions? Adnoc and other international oil companies are banking on select technologies (to sceptics, “green cover” for further climate damage) to preserve their core business model: extracting oil.

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
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?

Private sector Emiratisation

Giving private sector jobs the required significance; only such a dramatic image makeover can attract more UAE nationals to it

by Emilie Rutledge | May 10, 2018

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.[1] 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.”

[1] Al Nowais, S. (2017, March 7). Sheikh Abdullah tells UAE youth to think beyond ‘comfortable’ jobs, The National. Retrieved from https://www.thenational.ae/uae/government/sheikh-abdullah-tells-uae-youth-to-think-beyond-comfortable-jobs-1.41511

Educated Emirati fathers want more for their daughters

The more educated a father is, the more likely he is to encourage his daughter to take up a high-powered career, a study suggests

by Roberta Pennington | April 23, 2017

Researchers from United Arab Emirates University are studying the influence of parents in their children’s careers. And an Emirati child with parents in the private sector is much more likely to hold similar aspirations, it says. Before Mariam Al Zaabi had finished university, her father urged her to become a self-sufficient, professional woman. “He wanted me to be as strong as the men,” said Ms Al Zaabi. “So he said, ‘you need to work and you need to go and earn your degree’.” Her experience is in line with the two main findings of the study into the influence of parents in their children’s careers, by researchers at UAE University.

Academics polled 335 female Emirati students to see what influenced their career intentions. Dr Emilie Rutledge, associate professor at the university’s College of Business and Economics, hoped the two findings could help with Emiratisation policy. “Encouraging more males to undertake tertiary education and continuing with the policy of subsidising the employment costs of nationals will pay longer-term dividends in terms of female labour force participation,” Dr Rutledge said. An unexpected finding was the lack of influence mothers had over children’s career choice. “Mothers, irrespective of their educational attainment level, had no significant influence in the career decision making process of their daughters,” said Dr Rutledge.

The survey also asked students whether they wanted to work in the public or private sectors, to which 78.5 per cent responded public. “Furthermore, 29.6 per cent strongly agreed with the statement that they would ‘wait’ for a government job, as opposed to taking a private sector job in the interim,” the study found. The respondents also said that if the prospective job were “interesting,” the employer offered maternity leave and employed women role models, it would increase women’s likelihood of entering the workforce, the study found. “The job being interesting was ranked as the most important and this was subsequently found to significantly increase the likelihood of labour market entry,” the researchers wrote. While salary was also identified as a factor, “it did not turn out to have a significant relationship” with choice of career.

Dubai dredging

As I’ve written elsewhere, somewhat prophetically, an adverting campaign by a government-owned construction company, Nakheel Properties, pasted on billboards along Dubai’s Sheikh Zayed arterial road in the early 2000s, read something like: “Dubai puts ‘The World’ on the map; The World puts Dubai on the map.”

‘The World’ (Arabic: جزر العالم; Juzur al-Ālam) is an archipelago of artificial islands constructed in the shape of a world map, just off of the coast of the Emirate of Dubai.

Dredging works

The dredging works were undertaken by two Dutch joint-venture specialist companies, Van Oord and Boskalis. It was these companies who also created the now very much completed Palm Jumeirah (see below). These two companies began dredging works for The World project in 2003 but, works were halted for quite some time due to the 2008 global financial crisis.

Grand Ambitions
As seen from the International Space Station

Emirati women and the labour market

This is a recent article on the subject of Emirati women and the labour market

Parents play critical role in Emirati women’s career choices, UAE study shows

logo-the-national
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Dr Emilie Rutledge, associate professor of Economics at UAE University, at the lecture on Parental Influence on Female Vocational in the Arabian Gulf at Mohammed bin Rashid School of Government. Jeffrey E Biteng / The National.

The research team was led by Dr Emilie Rutledge, associate professor of economics at UAE University, who presented their findings to academics at the Mohammed bin Rashid School of Government (MBRSG) on Tuesday.

“Parental influence has a significant role on a given female’s likelihood of seeking to enter the labour market post-graduation,” she said. “Parental support reduces what women perceive as cultural barriers to employment.”

Sixty-eight per cent of the women said their parents influenced their decisions about careers, and 80 per cent said they preferred to work in the public sector.

Forty-six per cent said they felt it was the Government’s responsibility to find them work in the public sector.

Working in education, the civil service and police were deemed the most culturally “acceptable” careers for an Emirati woman, although areas such as advertising, marketing and pharmaceuticals were deemed more “attractive”.

“However, if parents are engaged in the vocational decision-making process, the female is more likely to consider exploring opportunities in the private sector,” Dr Rutledge said.

For Emiratisation to be successful, there must be more emphasis on these other fields rather than banking, human resources and finance, which the women did not consider interesting or attractive, Dr Rutledge said.

“Being in a gender-segregated environment was not as important to the girls as the salary or the job being interesting was, even if society or parents as a whole object to this,” she said.

Dr Rutledge cited holiday time and maternity leave as important, both of which were more attractive in the public than private sectors.

Ensuring the women return to the workplace through flexible working times and better maternity benefits was vital.

“A lot of females leave the workplace when they have a family because of the poor provisions, so they simply don’t go back and in turn, they lose their skills,” she said.

A father’s level of education was key in determining how his daughters would be guided. Fathers with degrees are more likely to support and encourage women to seek employment.

“Private-sector career paths are more attractive if the parent already works in the private sector,” Dr Rutledge said.

“This is of importance as there is merit to incentivising more Emirati males into higher education for the long-term participation of Emirati women in the labour market.”

Women graduate at a 3 to 1 ratio from UAE federal universities.

Dr Maryam Salem Al Marashad has been a long-standing academic at UAE University since she graduated with the first batch of students in 1977.

She left her post as dean of students two years ago but is still active in academia. She said a husband’s influence could not be underestimated.

“We see many girls at UAEU get married in their third year, so by the time they are going to the labour market, it is not only the family but their husband – she is stuck with an answer from her husband that she can or cannot work here or there.”

Geography will also sway a woman’s choices, she said.

“In Fujairah when I go to my bank, the whole first row is full of Emirati women who are supporting their families and are interested to work,” she said. “In Abu Dhabi or Dubai where there are many more opportunities, they can afford to be more picky.”

MBRSG’s head of gender and public policy, Ghalia Gargani, said more research was needed for the long-term participation of Emirati women in the job market.

Only 9 per cent of the labour force is Emirati, a fifth of them women.

“We need to think of ways to have policies for both men and women to balance their work and life and the responsibilities that come with their culture here,” she said. “It’s very relevant to research we’re doing here on the family unit.”