04 October, 2007

Headline: U.A.E.'s Drive for Emirati-Run Economy Is Thwarted by Handouts

Bloomberg.com: Europe
The handouts, based on traditions of royal patronage dating back centuries to Bedouin society, now discourage citizens from working, academics say. Expatriates outnumber Emiratis and dominate fields such as banking, law and technology. The quandary for Sheikh Mohammed is how to reduce the culture of dependence without alienating his people.

``The relationship between work and income is broken,'' says Kenneth Wilson, Dubai-based director of the Economic and Policy Research Unit at Zayed University, a school for Emirati women that opened in 1998. ``That's unlikely to change until the government starts trying to give incentives to work in the private or corporate sector.''

Thanks largely to the country's oil-fueled economic boom, the average male Emirati receives benefits worth about 204,000 dirhams ($55,500) a year, according to the university's research.
More significant steps to reduce privileges for Emiratis may be met with resistance, says Anthony Harris, a former U.K. ambassador to the U.A.E. who lives in Dubai.

``I'm sure there would be a call from within the royal family to change the sheikh to one that provided the benefits if there was a move to remove them,'' Harris says. ``The social contract is that you get given things by the sheikh and in return you give the sheikh your allegiance.''

Do you agree that the prevailing attitude is that allegiance is paid for, and that this gets in the way of reforming the system such that greater incentives to work in the private sector are created?


Anonymous said...

I think its our right. It is the goverment that is mostly benefiting from the economic growth and developments and a few well known family business. Otherwise all this has brought to the average emarati is inflation, traffic and threat to the national identity.

However, the important issue we have to tackle is wasta

Dubai Entrepreneur said...

That's a LOT of money! While it is understandable that a citizen would find it their 'right' to be given that money, it only hurts them.

A better way of doing things would be to offer such money in the form of grants for start-ups. The citizen would need to present a feasibility study and prove having put enough effort and thought into a feasible project to be awarded the grant.

That way, at least the money is not being spent on buying flashy cars, but in growing the economy and keeping the local population engaged in its growth.

As it stands, this is really sad. I certainly do not envy them for this. The government may be appeasing the people, but they are taking away any sense of accomplishment from them.


MJ said...

Interesting that it says "the average male Emirati..."
I don't think the money is given out equally in all Emirates. For example, you go to a place like Alain and you see most people living in big houses, good cars, etc. Then you go to a place like RAK and it's a whole different story. Interesting is that RAK students do better on average that students from Alain in university. (Male students) That might be because they feel that they actually need to work harder.
There is a lot of money in the country, so I do think they should still give us benefits, but maybe they should be given on accomplishments rather than randomly.

nick said...

@ dubai entrepreneur,

A better way of doing things would be to offer such money in the form of grants for start-ups.

These grants do exist already , ON TOP of the handouts!

Anonymous said...

They might seem like grants but if u do visit them u will realize they r nothing but a bank. U have to pay the money back and with interest. But ofcourse the interest is lower and they give u more time to pay it back.

Anonymous said...

Allegiance to the Sheikh is given according to the Sheikh's policies. It's simple. The Sheikh makes the people happy, and so the people make the Sheikh happy. Please do not make such bias statements as to whether this allegiance is related to 'materialistic stuff'. Like in every society, there are people who you can 'buy'. Nevertheless, I do believe that people with brains, sense of morality, and self-respect will not accept 'being bought'. Come to thing of it, if the Sheikh makes ME happy, makes MY FAMILY happy, makes SOCIETY happy, and adds a couple of extra bonuses of free houses, free lands, benefits, etc. -- well, thaat is an offer I can't refuse! The more the better. As long as he's a good leader; progressive and fair.

squarehead said...

gimme gimme gimme !

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