Study reveals GCC countries failed to exchange local workers

The ambition to create a strong non-local Gulf workforce in the region's private sector still has many obstacles to overcome.
The private sector in the Gulf places a worker from other Gulf countries at a third level, behind their own citizens and even foreign workers originating from non-Gulf countries. The Research and Studies Center at the Riyadh Chamber of Commerce and Industry concluded this in their study "The Role of Gulf Private Sector in supporting Gulf Joint work market".

The study indicated that the role of the Gulf private sector in creating a non-local Gulf work market is still minimal. There are not more than 20,000 workers from the Gulf, versus the 8.9 million foreign workers, representing 80 percent of the workforce in the Gulf market. The study also said that freedom of movement for the workers between the Gulf private sectors did not fulfill what was expected of it. 

According to the report, the workforce in the Gulf private sector still depends largely on non-skilled workers with low wages in jobs that are unacceptable to the Gulf manpower. This conclusion indicates that the competitive ability for the private sector relies mainly on low wages more than on the quality of the products. 

This, the study reveals, is clearly noted with the GCC joining the World Trade Organization, which opened the Gulf markets for foreign products, placing them in an open competition with products of other countries, and stressing the need to rely on low wages to face up to products created with higher skills and stronger abilities. 

There are fewer GCC workers than expected in GCC countries despite the principle of equality practiced between the workers in the Gulf private sector. This is a challenge in itself, according to the Riyadh Chamber study, in the face of the increasing numbers of foreign recruitments. 

The Gulf workers enjoy the privileges of both the locals as well as foreign workers, making them less appealing to the private sector. The need to realize the required quota of national recruits, leaving no place to recruit from other Gulf countries, is also a reason that stands between the private sector and its role in supporting a strong Gulf workforce.

The study reveals that the private sector, in light of the existing legislation, is not prepared to favor Gulf workers, and recommends the drafting of new and clear legislation for the recruitment of Gulf workers in other region states. 

The endorsement of equality is not enough, calling also for the need to consider incentives for establishments that recruit Gulf workers. The report also recommends a quota for large Gulf companies in recruiting workers from the region, especially calling those with strong Gulf commercial relations to activate recruitment among Gulf states. Recruitment in the Gulf, the study points out, still relies on emotional decisions, especially for small and medium-sized enterprises, as local and regional workers tend to demand their full rights that the enterprises often cannot afford to meet. 

More than 80 percent of citizens in the Gulf countries work in the government sector, which the report identifies as a threat. The public sector will not be able to continue to provide the same level of jobs due to economic factors. 

The Gulf workforce market, the study concludes, suffers a number of setbacks and requires immediate and combined remedies to provide job opportunities for Gulf citizens, to better their acceptance chances in the private sector of the GCC states and accommodate the growing numbers of fresh graduates.

Wives exempt from presenting rent contract for UAE visa

Authorities say new rules will be enforced through UAE and bachelors must complyAbu Dhabi and all other UAE emirates will soon enforce new rules stipulating expatriates seeking to have their residence visas renewed must submit a tenancy contract with the application with the exception of wives, a senior Interior Ministry official was reported on Sunday as saying.

Foreign bachelors must present documents verifying their residence along with their visa renewal application even if they work in one emirate and reside in another, said Major General Nassir al Minhali, the Ministry's assistant undersecretary for naturalization and residence affairs.

Quoted by the Sharjah-based Arabic language daily Alkhaleej, he said the new rules would be enforced in all UAE emirates "without exception" and are intended only to ensure all expatriates in the country have valid addresses.

He said the decision, which was temporarily suspended last week, does not target property firms or any other party, describing it as a "security, service and administrative" regulation aimed at serving the UAE's interests.

"All expatriates, including families and individuals, must submit tenancy contracts with their visa renewal applications," he said.

"As for wives residing in apartments in the name of their husbands, they can present only their marriage contracts with their visa applications."

Minhali dismissed earlier reports that the new regulations apply only to families, adding that bachelors would not be able to have their visas renewed unless they submit a tenancy contract in their name or a valid utility bill.

"All bachelors are required to submit proof of residence including those whose visas are registered in Abu Dhabi but work in other emirates," he said.

Alkhaleej quoted what it described as a responsible source at the Dubai residence and foreign affairs department as saying the new rules would soon be enforced in the emirate and that there would be no exceptions of exemptions.

"All foreigners residing in Dubai will have to submit either a tenancy contract of the last water or electricity bill along with their visa renewal and issuance application," the source said.

The paper also quoted Ali bin Khatim, chief prosecutor at the department, as saying the new decision would "help organise the presence of expatriates in the UAE and reduce negative phenomena including illegal immigration."

UAE corporates have ample cash cushions

The non-financial corporate sector in the UAE is showing signs of fiscal improvement, albeit stress testing indicates continued vulnerabilities to global financial conditions, particularly in the real estate sector, the International Monetary Fund, or IMF, said.

The Washington-based fund said in its country report on the UAE, that the corporate-financial link is important for the Emirates.

Total assets of 53 listed non-financial corporates decreased slightly to $127 billion in the third quarter 2011 from $128 billion in the same period a year earlier in spite of the worldwide financial meltdown.

However, 10 of those corporates, mostly real estate companies, which have either operating losses or do not have ample operating income, "have sufficient cash cushions to service their debt," the fund noted.

The IMF report said the total assets of the non-financial corporate sector make up about 37 per cent of the country's gross domestic product, or GDP, and 34 per cent of bank assets. " Total debt has remained constant at around $34 billion while corporate leverage is within reasonable limits, with a debt-equity ratio of two. Short-term debt constitutes nine per cent of total debt," the IMF report said.

The Fund noted that profits of the non-financial corporate sector have remained stagnant at around $1 billion whereas cash balances have decreased from $11.2 billion to $9.6 billion in 2011 third quarter.

"The net profits and cash position of the real estate sector are still much lower than the pre-crisis period, although there seems to be a slight turnaround in net profits in the first half of 2011, after a loss in 2010," the fund said.

"Nonetheless, the corporate sector's debt-servicing ability is still showing some signs of weakness, largely due to the real estate crisis," it said in the report it prepared for consultations with the UAE and released this month.

"Out of 53 listed UAE companies, 10 have either operating losses or do not have sufficient operating income to service their debt, although they have sufficient cash cushions to service their debt. The total liabilities of these companies are $12.1 billion, their total debt is $3.3 billion, and they had cash balance of $0.7 billion. Of these 10, seven companies are real estate companies with total liabilities of $12.02 billion, total debt of $3.25 billion and $0.68 billion cash balance.

The IMF observed that the interest-paying capacity of the corporates was stressed by increasing short-term interest rates by 200 basis points, or bp, and 500bp from current levels, and by assuming a negative income shock of 25 per cent. "Higher interest rates and lower income can imply a much lower buffer against distress."

According to the IMF, a foreign funding shock could generate some liquidity tightening in the UAE banking sector albeit the funding situation of local banks has stabilised.

In its report, the IMF had noted that stress tests show that the banking system could address moderate external liquidity shocks with its own resources, and that the stock of central bank foreign currency reserves would be sufficient to address even a strong shock scenario.

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Special addresses: Websites get new names

UAE organisations grab 46 domains in the first wave of special addresses.

Dubai: You can now add .abudhabi and .dubai to your Internet lexicon. The internet regulator Internet Corporation for Assigned Names and Numbers (Icann) on Wednesday took the wrapping off new domain names that will expand the internet beyond the existing domains, such as .com, .org and .net.

Both emirates have submitted their applications along with etisalat (.etisalat). Abu Dhabi and etisalat will also have Arabic version of their names as UAE organisations picked up 46 domains.

“It’s going to make the internet more approachable,” Icann’s CEO Rod Beckstrom told Gulf News from London via remote access.

Icann received 1,930 proposals for 1,410 different internet suffixes.

Companies will be able to keep their existing .com names.

The price to apply for a new generic top-level domain (gTLD) was $185,000, with an annual fee of $25,000, although experts estimate each name costs around $1 million to set up.

Icann expects the first batch of new gTLDs to be operational in the beginning of next year.

Investment

The Dubai-headquartered Directi Group has invested around $30 million (Dh110 million) for the application of 41 domain strings, which includes several generic and mass market names.

“We have invested significant resources to developing intelligent, responsible, secure and thorough proposals for what could serve as the foundation for this new era on the Internet,” said Bhavin Turakhia, founder and CEO of Directi Group. Top extensions on Directi’s list of applications include: .web, .bank, .loans, .insurance, .law, .shop, .app, .website, .click, .online, .music, .hotel .doctor, .baby and .shop.

However, those domains could still be challenged.

“The public will have 60 days to comment on the proposals. Someone can claim a trademark violation or argue that a proposed suffix is offensive. Companies and organisations will have seven-month objection period,” Kurt Pritz, Senior Vice-President of Icann, said.

Rent contract rule shelved briefly: report

Suspension is intended to give more time to tenants and landlordsThe UAE has approved new rules requiring expatriates seeking renewal of their residence visas to submit tenancy contracts but the decision has been shelved briefly to give more time to tenants and landlords.

According to the semi official daily Alittihad, Abu Dhabi suspended the enforcement of the new rule after the immigration department was throttled by applicants, many of whom failed to submit the required documents.

Quoting department sources, the Arabic language daily said the new rule has also been shelved to give way to a series of meetings between the competent authorities, including Abu Dhabi Municipality, to discuss a mechanism for tenancy contract submission and attestation.

"The decision has been shelved briefly to ease bottlenecks at the department and to give more time to tenants and landlords as well as allow authorities to discuss a proper mechanism for its implementation," the paper said.

It said the decision had first exempted public servants and covered only foreigners in the private sector, adding that all expatriates are now affected.

"Another reason for the suspension of the decision is that major companies operating in the emirate are supposed to submit proof showing they provide housing for their employees," it said without mentioning when the new regulations would be fully enforced in Abu Dhabi and other emirates.

Visa applicants confirmed the temporary shelving of the new rules, which were partly enforced in Abu Dhabi last week.

"I went yesterday (Tuesday) to renew my visa and applied all needed documents...they did not ask for a tenancy contract," Fadi Hariri said.
Another expatriate said his application was rejected last week and was told to submit a tenancy contract. "I went again yesterday but was told a tenancy contract is not needed for now," Mohammed Masri said.

Dubai 8th in global tourist spend

Ahead of Rome, New York, Barcelona, Vienna etcDubai continues to be a major attraction for tourists worldwide as the emirate moved up in ranking, visitor number and tourist spending in 2012, said the latest report released today.

The emirate saw its ranking improving one notch to eight globally ahead of Frankfurt, Kuala Lumpur, Seoul, Rome, New York, Shanghai, Barcelona, Vienna and many other major cities, according to MasterCard's "Worldwide Index of Global Destination Cities" for 2012.

Similarly, the number of visitors jumped to 8.8 million, an increase of 15.3 per cent; while the spending by tourists will also jump by around 18.5 per cent to $8.8 billion (Dh32.3 billion) this year as compared to $7.4 billion in 2011, MasterCard projected in its report.

The report predicted that visitors from London will top in terms of spending in Dubai this year. They are projected to expend about $1.2 billion followed by visitors from Paris ($297 million) and Munich ($267 million).

In the outbound travel, 182,000 visitors from Dubai to Sydney will be spending around $976 million (Dh2.18 billion) this year - the highest by the Dubai visitors to any city worldwide. Sydney is followed by London where 232,000 visitors will expend approximately $608 million in 2012, according to MasterCard estimates.

Other top cities rated by MasterCard from the Middle East and Africa include Cairo (3.3m visitors), Abu Dhabi (2.7m visitors), Johannesburg (2.5m visitors) Riyadh (1.9m visitors), Amman (1.7m visitors) and Tunis (1.6m visitors). Cairo retained its second place while Abu Dhabi was rated third, up from sixth in 2011, propelled by an impressive 17.9 per cent growth.

The number of visitors to the top 10 destination cities in the Middle East and Africa in 2012 is an increase of 7.2 per cent from 2011, bringing the total to just below 29 million. Total cross-border spending by visitors in these cities shows a more impressive growth of 10.4 per cent, reaching $34.1 billion.

It said the regional outlook for the Middle East and Africa is equally bright, with visitor numbers for the top ten cities set to grow by 7.2 per cent, total international spending predicted to rise by 10.4 per cent and average spend per visit set to grow by three per cent. Visitors will spend the most in Dubai and this is also a fast growing city within the top ten for that region.

Abu Dhabi will be the fastest growing in terms of spend, according to the report, up 20.7 per cent this year. Looking at the full list of cities, Durban will be the fastest growing for the region in terms of visitor numbers and is predicted to be the second fastest growing city in our report. Visitor numbers to Abu Dhabi are set to grow nearly three and a half times faster than New York.

The other cities ranked in the top 10 in 2012 are London, Paris, Bangkok, Singapore, Istanbul, Hong Kong, Madrid, Dubai, Frankfurt and Kuala Lumpur.

MasterCard's "Worldwide Index of Global Destination Cities" predicted that London will see 16.9 million people arrive by air compared with a million less for second place city Paris and miles ahead of New York at 13th place with 7.6 million arrivals.

The Index, which encompasses 132 of the world's most important cities, is being marketed as a new map for understanding global connectivity.