Dec 20, 2018 in Economics

Introduction

Unemployment is a major social and economic problem which is affecting both the developing and developed countries. Having information about the employment and unemployment rates of a country helps a lot in putting in place methods and policies which help sustain the economy by curbing the rate of employment. The economy of the United Arab Emirates is mainly sustained by oil, and most of the employment opportunities are found in the oil industry and related sectors such as finance and infrastructure (Muwia, 2004).

Unemployment rate is defined as the number of people who are able and willing to work, but cannot find job opportunities, divided by the number of families in that selected region. Employment, on the other hand, is defined as the number of people who are actively employed.

Prior to the discovery of oil in the United Arab Emirates, the economy was mainly dominated by other activities such as subsistence agriculture, minimal trade and fishing. During this time, the unemployment rate in Dubai was very high since the government of the day could not initiate programs of job creation due to lack of capital. The discovery of oil enabled the government to improve the state of roads, standards of living, education, as well as create many job opportunities to the masses.

During the 1970s, United Arab Emirates saw an influx of foreign job seekers since they were enticed by the development programs being initiated there. But this soon created problems since oil prices began falling. The influx of foreign job seekers coupled with high population growth soon resulted in mass unemployment since the existing opportunities could not match the growing demand for jobs.

The research paper below reviews the employment and unemployment statistics in United Arab Emirates and, most specifically, its capital, Dubai. Sampling method is mostly used since it is the most accurate method of surveying. At the end, results will be analyzed and some policy recommendations will be given.

Overview of the Employment and Unemployment Rates in the Dubai, United Arab Emirates

During the 1970’s, there was a massive shortage of labor in UAE due to the oil price boom that the oil industry had witnessed. This was after the oil producing countries raised the oil prices hence the country was able to implement great economic operations and policies to curb unemployment. Due to lack of qualified labor, more and more foreigners began an influx to the capital Dubai to look for jobs since the locals could not match the wanted labor force. After sometime, foreigners made up nearly 80% of the total workforce. When the oil prices began going down in 1980s, it caused mass unemployment to the Dubai nationals as well as foreign job seekers, who were laid from their former job positions.

Despite all these, Dubai and the nation as whole has the lowest unemployment rate in the world, around 2.4 percent. Most of the unemployed are the illegal immigrants who are constantly migrating to the country in search of greener pastures hence they end up putting pressure on the available job opportunities. Also, an increase of the population has resulted in more population than the existing job opportunities.

The unemployment rate also depends largely on the sex in question. In regard to females, the unemployment rate is much higher than males because of education standards but this trend has been improving.

The unemployment rates in Dubai and the entire United Arab Emirates have diverse negative impacts in that the government will have to spend more since the economy will be unstable. Unemployment also leads to political instability since the population is desperate.

As from 2000, the government in Dubai began implementing policies which were meant to ease down the rate of unemployment. One of these policies included placing its nationals in jobs in crucial sectors such as finance, to replace the foreigners. This move was soon hampered by lack of qualifications among the nationals. To curb this problem, the government meant sure that graduates got specialized hands on training to prepare them for what they would expect in the job market.

In Dubai, most of the unemployed are the youth since they lack the necessary qualifications needed in the job market hence they find themselves always overlooked. To avoid the unemployment rates doubling in the coming years, the government needs to reform the education system as well as providing specialized training to its citizens (Souad, 2009).

Conclusion

In conclusion, it can be noted that most of the unemployment in Dubai has been caused by two things: the influx of foreign job seekers and most nationals being unqualified to hold professional job positions in sectors such as finance and engineering. Most companies in the private sector also prefer employing non-nationals since the cost of hiring a Dubai national is higher than foreigners and this leads to high unemployment rates among the citizens.

The youth also have a wrong attitude regarding working in private sector, as most of them prefer working with government companies and parastatals. Also the private sector needs to be streamlined in order to absorb fresh graduates into the job market.

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