Economic diversification and Emiratisation are two of the key aspects of the UAE’s comprehensive strategy for sustainable growth. Interestingly, the two concepts are connected and mutually supportive too.
While the government’s economic diversification policies aim to reduce the UAE’s historically heavy reliance on oil and gas as its main source of revenue, they also help to create job opportunities for Emiratis in non-oil sectors such as tourism, finance, manufacturing, renewable energy, technology, and knowledge-based industries.
The two strategies work in sync to establish long-term sustainability and reduce vulnerability to oil price fluctuations, while at the same time empowering citizens and reducing reliance on expatriate labour.
Until 2019, federal and the local government agencies jointly employed nearly 80 percent of UAE nationals while private sector stood at 8 percent. By expanding the economy beyond traditional sectors such as oil and gas, the UAE is offering Emiratis more diverse and sustainable job prospects. This has opened avenues for citizens to enter different industries, contribute their skills, and pursue careers aligned with their interests and aspirations.
Economic diversification often requires services and resources with a diverse set of skills and expertise. As the UAE develops new industries, there is a growing demand for professionals with specialised knowledge in these sectors.
The country’s Emiratisation drive helps equip Emiratis with the necessary skills to fill these new roles, while economic diversification provides the context for matching these skills with the evolving needs of the job market.
Economic diversification also allows for a gradual reduction in the reliance on expatriate labour, creating more opportunities for Emiratis to fill positions that were previously occupied by expats. By expanding sectors where Emiratis can contribute effectively, the need for expatriate labour decreases, promoting a more balanced labour market.
The new rules around Emiratisation reflect the government’s efforts to shrink this dependence in alignment with its diversification agenda. The Emiratisation Resolution necessitates employers registered with the Ministry of Human Resources and Emiratisation to raise the proportion of Emiratis in the workforce by 2 percent each year until it reaches the level of 10 percent by 2026.
The required proportion of UAE nationals in the workforce is currently aimed to reach one out of every 50 skilled employees. This indicates that the responsibility is to be borne by medium to large enterprises across sectors operating in the country.
The drive to branch out into non-oil sectors has also encouraged the growth of small and medium-sized enterprises and a growing interest in entrepreneurship among Emiratis. Emiratisation efforts have strengthened the diversification process by supporting Emirati entrepreneurs and enabling them to establish businesses in these new sectors.
By fostering a culture of entrepreneurship and providing the necessary support infrastructure, the UAE is empowering its citizens to create their own job opportunities and contribute to the process. A slew of measures have been announced periodically to stimulate growth in these new sectors in the form of various economic reforms including easing foreign ownership restrictions and establishing investor-friendly policies.
Rules, laws, and requirements are updated frequently as the UAE looks to keep itself current and continue to be an investment magnet. This, in turn, has led to the creation of thousands of high-value jobs and opportunities for Emiratis to excel in cutting-edge industries.
Overall, it is safe to say that the diversification strategy has paved the way for a more inclusive and sustainable economy, enabling citizens to actively participate in various sectors and reducing dependence on a single industry.
It has created a favourable environment for Emiratisation by expanding employment opportunities, matching skills with market needs, reducing reliance on expatriate labour, supporting entrepreneurship, enhancing national competitiveness, and establishing a more inclusive and balanced workforce.
The positive effects of these two initiatives are already evident and tangible, and their long-term impact is certain to manifest itself over the next decade.