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Meteoric rise
As the UAE celebrates the 40th anniversary of its independence, it can look back with pride at its booming economy aided by oil exports.
FORTY years ago, very few people would have predicted that a group of relatively small emirates in the Persian Gulf which had voluntarily banded together and formed a state would emerge as a leading energy producer and trading entrepot of the world. Abu Dhabi, the mainstay of the United Arab Emirates (UAE), the name the seven emirates had chosen when they gained independence from Great Britain on December 2, 1971, is estimated to hold around 8 per cent of the world's known oil deposits. The UAE is the world's fifth biggest oil producer. Dubai, the commercial nerve centre, had a bit of a setback two years ago in the midst of the global recession, but there are signs that the city, a playground of the rich and the famous, is now recovering albeit at a slower pace than expected.
Abu Dhabi occupies 80 per cent of the UAE's land mass. Abu Dhabi and the six other, smaller, emirates were together known as the Trucial States when they were under colonial rule. Until the late 1960s, the area was among the poorest in the region, but the discovery of big oilfields, especially off the coast of Abu Dhabi, led to a dramatic change in the fortunes of the sparsely populated emirates. Until the 1920s, they had mainly survived on fishing and the export of pearls. When independence came, the UAE was already among the fastest growing economies of the world, fuelled by its oil exports. The majority of expatriate workers who contributed to building the infrastructure of a prosperous UAE in such a short span of time were workers from the Indian subcontinent, mainly from Kerala.
Labour rights
Saqr Ghobash, the UAE Minister of Labour, told Frontline that a number of initiatives and policies had been implemented for the protection of labour rights. One of them is the protection of wages. Workers are now paid electronically so that the government can watch out for malpractices. They will now be allowed to leave their employers or take them to court if labour laws are violated. They will be given the choice of seeking new contracts after the initial two-year contract lapses. According to Ghobash, countries from which the workers hail should also keep a close watch on the terms and conditions of employment in the UAE advertised by recruitment agencies. He revealed that the Indian government was closely cooperating with the UAE to ensure that recruitment agencies adhered to local laws.
The Labour Minister said the International Labour Organisation (ILO) had expressed its happiness with the wage protection system that the UAE government had introduced. He was, however, quick to add that a lot of problems still remained despite the improvement in employer-employee relations. Ghobash said that within five years, all the labour camps where workers stayed would be of international standards.
CHARLES CROWELL/BLOOMBERG
WORKERS GIVING FINAL touches to Burj Dubai, the world's tallest building, in Dubai on January 3, 2010, the day it was inaugurated.
The two big economic sectors, construction and retail, will be in need of foreign workforce. Emiratis, as the local people are called, constitute only around 11.47 per cent of the population. The rest of the population of 8.2 million consists of expatriates. However, Ghobash said, the quality of the workforce would be undergoing a change as the UAE shifted from a developing economy to a knowledge-based one. He has predicted a paradigm shift in the recruitment policy. The trend is to reduce the numbers of unskilled workers, said Ghobash.
Currently, the majority of the 3.8 million workers in the country are unskilled. The Minister revealed that the government intended to speed up moves to give the Emiratis more employment opportunities. He said that according to estimates, some 300,000 local people were currently looking for jobs. Indigenisation of jobs is the first priority, said Ghobash.
The UAE government has envisaged an even brighter future for itself. Mohammed Omar Abdullah, a senior official in the Department of Economic Development, told the media that under the ambitious $500-billion Vision 2030 plan, the government would ensure that the non-oil sector contributed more to the economy in the coming years. The volatility of oil prices could have an adverse impact on the economy, said Abdullah. The non-oil sector accounts for 15.9 per cent of the economy. Abu Dhabi and Dubai complement each other. Dubai has a resilient economy, said the official. Dubai is a commercial and tourist hub, while Abu Dhabi focusses on oil and gas.
Abdullah said that the upheaval in the Arab world had not had an impact on the UAE. A lot of foreign direct investments have been coming into the UAE since the Arab Spring started, he said.
The UAE has already invested heavily in the nuclear sector. It hopes to become the first Arab nation to produce nuclear energy. In December 2009, the UAE and the United States signed a 123 Agreement formalising cooperation in the nuclear sector. Abdullah said that his government had drawn lessons from the Fukushima nuclear disaster.
R.V. MOORTHY
SAQR GHOBASH, LABOUR Minister of UAE.
Sultan Al Jaber, the head of Masdar, UAE's renewable energy initiative, said that safe nuclear energy would help maximise the benefits from conventional sources of energy. Masdar was set up in 2006 with a budget of $15 billion. Masdar covers the whole value chain of renewables. It is a platform to advance sophisticated technologies and is the first of its kind, said Al Jaber. The Masdar Science City has already come up in Abu Dhabi.
The permanent headquarters of the International Renewable Energy Agency (IREA) is now in Masdar City, making it the first international organisation to have its headquarters in West Asia. Masdar is already engaged in many local and international renewable energy projects, including a 100 megawatt (MW) concentrated solar power plant in Abu Dhabi and a 19.9MW Gemasolar solar plant in Spain. The IREA has got contracts for other advanced projects in Europe such as contracts to build wind farms and to use clean technology in order to reduce gas emissions from industrial plants. According to Al Jaber, renewable energy is crucial for the future as hydrocarbons decrease. He expects Abu Dhabi to start exporting clean energy in the near future.
Today, the UAE, which has emerged as a key player in the Gulf Cooperation Council (GCC), is able to leave an imprint on international affairs. Though tilting towards the West, with which it has strong strategic ties, the UAE government has striven to chart its own course in the perilous politics of West Asia. After the creation of the GCC in 1981, a Kuwaiti newspaper noted that all of them live in a wild world, one in which oil attracts sharks in the manner of blood. The UAE leadership at that time, under Sheikh Zayed bin Sultan Al Nahyan, tried to steer a neutral course between the two contending superpowers of the Cold War era the U.S. and the Soviet Union. We don't want any country, big or small, interfering in our affairs or conducting their conflicts on our soil, air and seas, Sheikh Zayed had said at the time of the GCC's formal launch.
The end of the Cold War made the UAE leadership feel more vulnerable. The long-drawn-out Iran-Iraq war of the 1980s had brought military conflict to the doorstep of the emirates. It was around this time that the UAE started playing a more robust role in regional affairs. This was most visible in Afghanistan where it backed the U.S.-supported mujahideen. The UAE, Saudi Arabia and Pakistan were the only three states that formally recognised the Taliban government in Afghanistan after it assumed power in the mid-1990s. The UAE was among the biggest financial backers of the Palestinians. Sheikh Zayed City has been built in Gaza with money from the Abu Dhabi Development Fund. The UAE has also been generous in its funding of United Nations agencies.
The Arab Spring, no doubt, came as a surprise to the governments of the region. There were some minor stirrings in the UAE too. Five bloggers, all of them UAE nationals, were arrested and sentenced to long terms in prison. However, they have since been pardoned by President Sheikh Khalifa bin Zayed Al Nahyan as part of the 40th anniversary celebrations.
AP
A VIEW OF the library building of the Masdar Institute of Science and Technology in Abu Dhabi. Masdar is a clean-energy city that aims to use renewable sources of energy.
The UAE played a role in the overthrow of the late Libyan leader Muammar Qaddafi. The UAE and Qatar were the only two Arab countries that joined the NATO assault on Libya. But in comparison to Qatar's high-profile role in Libya, the UAE's role was symbolic. There already is a backlash against Qatar among influential sections of the new government in Libya. Qatar has been accused of trying to influence government formation in Tripoli and of cornering oil contracts. The UAE Foreign Minister, Sheikh Abdullah bin Zayed Al Nahyan, told the media in Abu Dhabi that the UAE had no intention of interfering in the internal affairs of Libya.
The UAE had also sent a token force along with Saudi Arabia to neighbouring Bahrain to quell the pro-democracy movement there. Sheikh Abdullah said that the UAE forces were there at the request of Bahrain and would be withdrawn at its request.
The Foreign Minister also expressed the hope that the Syrian government would accept the proposals made by the Arab League to end the political crisis there. He emphasised that Damascus would be given more time to implement the Arab League plan of action and said that sanctions on Syria were not imminent. The Governor of the UAE Central Bank, Nasser al Suwaidi, also said that there were no plans as yet to freeze Syrian assets in the country or to impose economic sanctions. Suwaidi said that the Central Bank had not received any instructions from the government to that effect. On Iran, both the Central Bank Governor and the Foreign Minister said that the government would implement only the U.N.-mandated sanctions and not the additional unilateral sanctions announced by the U.S. and the European Union.
The UAE Foreign Minister had just returned from an unscheduled trip to Pakistan. The Pakistani media had speculated that the purpose of his trip was to persuade Islamabad to have a rethink on the Shamsi base issue. After the killing of 24 Pakistani soldiers by the U.S. forces, Islamabad had demanded that the Americans stop using the base for launching their drones. The base, in Baluchistan province, according to some reports, was built with UAE funding. There are other reports that claim that the military base was in fact used by the UAE. However, Sheikh Abdullah denied raising the issue of the airbase when he met with top Pakistani leadership and the military chief, Gen. Ashfaq Parvez Kayani. He said that NATO owed an apology to Pakistan for the unfortunate incident that led to the death of innocent soldiers.
As the UAE celebrates the 40th anniversary of its independence, it can look back with pride at its booming economy aided by oil exports.
FORTY years ago, very few people would have predicted that a group of relatively small emirates in the Persian Gulf which had voluntarily banded together and formed a state would emerge as a leading energy producer and trading entrepot of the world. Abu Dhabi, the mainstay of the United Arab Emirates (UAE), the name the seven emirates had chosen when they gained independence from Great Britain on December 2, 1971, is estimated to hold around 8 per cent of the world's known oil deposits. The UAE is the world's fifth biggest oil producer. Dubai, the commercial nerve centre, had a bit of a setback two years ago in the midst of the global recession, but there are signs that the city, a playground of the rich and the famous, is now recovering albeit at a slower pace than expected.
Abu Dhabi occupies 80 per cent of the UAE's land mass. Abu Dhabi and the six other, smaller, emirates were together known as the Trucial States when they were under colonial rule. Until the late 1960s, the area was among the poorest in the region, but the discovery of big oilfields, especially off the coast of Abu Dhabi, led to a dramatic change in the fortunes of the sparsely populated emirates. Until the 1920s, they had mainly survived on fishing and the export of pearls. When independence came, the UAE was already among the fastest growing economies of the world, fuelled by its oil exports. The majority of expatriate workers who contributed to building the infrastructure of a prosperous UAE in such a short span of time were workers from the Indian subcontinent, mainly from Kerala.
Labour rights
Saqr Ghobash, the UAE Minister of Labour, told Frontline that a number of initiatives and policies had been implemented for the protection of labour rights. One of them is the protection of wages. Workers are now paid electronically so that the government can watch out for malpractices. They will now be allowed to leave their employers or take them to court if labour laws are violated. They will be given the choice of seeking new contracts after the initial two-year contract lapses. According to Ghobash, countries from which the workers hail should also keep a close watch on the terms and conditions of employment in the UAE advertised by recruitment agencies. He revealed that the Indian government was closely cooperating with the UAE to ensure that recruitment agencies adhered to local laws.
The Labour Minister said the International Labour Organisation (ILO) had expressed its happiness with the wage protection system that the UAE government had introduced. He was, however, quick to add that a lot of problems still remained despite the improvement in employer-employee relations. Ghobash said that within five years, all the labour camps where workers stayed would be of international standards.
CHARLES CROWELL/BLOOMBERG
WORKERS GIVING FINAL touches to Burj Dubai, the world's tallest building, in Dubai on January 3, 2010, the day it was inaugurated.
The two big economic sectors, construction and retail, will be in need of foreign workforce. Emiratis, as the local people are called, constitute only around 11.47 per cent of the population. The rest of the population of 8.2 million consists of expatriates. However, Ghobash said, the quality of the workforce would be undergoing a change as the UAE shifted from a developing economy to a knowledge-based one. He has predicted a paradigm shift in the recruitment policy. The trend is to reduce the numbers of unskilled workers, said Ghobash.
Currently, the majority of the 3.8 million workers in the country are unskilled. The Minister revealed that the government intended to speed up moves to give the Emiratis more employment opportunities. He said that according to estimates, some 300,000 local people were currently looking for jobs. Indigenisation of jobs is the first priority, said Ghobash.
The UAE government has envisaged an even brighter future for itself. Mohammed Omar Abdullah, a senior official in the Department of Economic Development, told the media that under the ambitious $500-billion Vision 2030 plan, the government would ensure that the non-oil sector contributed more to the economy in the coming years. The volatility of oil prices could have an adverse impact on the economy, said Abdullah. The non-oil sector accounts for 15.9 per cent of the economy. Abu Dhabi and Dubai complement each other. Dubai has a resilient economy, said the official. Dubai is a commercial and tourist hub, while Abu Dhabi focusses on oil and gas.
Abdullah said that the upheaval in the Arab world had not had an impact on the UAE. A lot of foreign direct investments have been coming into the UAE since the Arab Spring started, he said.
The UAE has already invested heavily in the nuclear sector. It hopes to become the first Arab nation to produce nuclear energy. In December 2009, the UAE and the United States signed a 123 Agreement formalising cooperation in the nuclear sector. Abdullah said that his government had drawn lessons from the Fukushima nuclear disaster.
R.V. MOORTHY
SAQR GHOBASH, LABOUR Minister of UAE.
Sultan Al Jaber, the head of Masdar, UAE's renewable energy initiative, said that safe nuclear energy would help maximise the benefits from conventional sources of energy. Masdar was set up in 2006 with a budget of $15 billion. Masdar covers the whole value chain of renewables. It is a platform to advance sophisticated technologies and is the first of its kind, said Al Jaber. The Masdar Science City has already come up in Abu Dhabi.
The permanent headquarters of the International Renewable Energy Agency (IREA) is now in Masdar City, making it the first international organisation to have its headquarters in West Asia. Masdar is already engaged in many local and international renewable energy projects, including a 100 megawatt (MW) concentrated solar power plant in Abu Dhabi and a 19.9MW Gemasolar solar plant in Spain. The IREA has got contracts for other advanced projects in Europe such as contracts to build wind farms and to use clean technology in order to reduce gas emissions from industrial plants. According to Al Jaber, renewable energy is crucial for the future as hydrocarbons decrease. He expects Abu Dhabi to start exporting clean energy in the near future.
Today, the UAE, which has emerged as a key player in the Gulf Cooperation Council (GCC), is able to leave an imprint on international affairs. Though tilting towards the West, with which it has strong strategic ties, the UAE government has striven to chart its own course in the perilous politics of West Asia. After the creation of the GCC in 1981, a Kuwaiti newspaper noted that all of them live in a wild world, one in which oil attracts sharks in the manner of blood. The UAE leadership at that time, under Sheikh Zayed bin Sultan Al Nahyan, tried to steer a neutral course between the two contending superpowers of the Cold War era the U.S. and the Soviet Union. We don't want any country, big or small, interfering in our affairs or conducting their conflicts on our soil, air and seas, Sheikh Zayed had said at the time of the GCC's formal launch.
The end of the Cold War made the UAE leadership feel more vulnerable. The long-drawn-out Iran-Iraq war of the 1980s had brought military conflict to the doorstep of the emirates. It was around this time that the UAE started playing a more robust role in regional affairs. This was most visible in Afghanistan where it backed the U.S.-supported mujahideen. The UAE, Saudi Arabia and Pakistan were the only three states that formally recognised the Taliban government in Afghanistan after it assumed power in the mid-1990s. The UAE was among the biggest financial backers of the Palestinians. Sheikh Zayed City has been built in Gaza with money from the Abu Dhabi Development Fund. The UAE has also been generous in its funding of United Nations agencies.
The Arab Spring, no doubt, came as a surprise to the governments of the region. There were some minor stirrings in the UAE too. Five bloggers, all of them UAE nationals, were arrested and sentenced to long terms in prison. However, they have since been pardoned by President Sheikh Khalifa bin Zayed Al Nahyan as part of the 40th anniversary celebrations.
AP
A VIEW OF the library building of the Masdar Institute of Science and Technology in Abu Dhabi. Masdar is a clean-energy city that aims to use renewable sources of energy.
The UAE played a role in the overthrow of the late Libyan leader Muammar Qaddafi. The UAE and Qatar were the only two Arab countries that joined the NATO assault on Libya. But in comparison to Qatar's high-profile role in Libya, the UAE's role was symbolic. There already is a backlash against Qatar among influential sections of the new government in Libya. Qatar has been accused of trying to influence government formation in Tripoli and of cornering oil contracts. The UAE Foreign Minister, Sheikh Abdullah bin Zayed Al Nahyan, told the media in Abu Dhabi that the UAE had no intention of interfering in the internal affairs of Libya.
The UAE had also sent a token force along with Saudi Arabia to neighbouring Bahrain to quell the pro-democracy movement there. Sheikh Abdullah said that the UAE forces were there at the request of Bahrain and would be withdrawn at its request.
The Foreign Minister also expressed the hope that the Syrian government would accept the proposals made by the Arab League to end the political crisis there. He emphasised that Damascus would be given more time to implement the Arab League plan of action and said that sanctions on Syria were not imminent. The Governor of the UAE Central Bank, Nasser al Suwaidi, also said that there were no plans as yet to freeze Syrian assets in the country or to impose economic sanctions. Suwaidi said that the Central Bank had not received any instructions from the government to that effect. On Iran, both the Central Bank Governor and the Foreign Minister said that the government would implement only the U.N.-mandated sanctions and not the additional unilateral sanctions announced by the U.S. and the European Union.
The UAE Foreign Minister had just returned from an unscheduled trip to Pakistan. The Pakistani media had speculated that the purpose of his trip was to persuade Islamabad to have a rethink on the Shamsi base issue. After the killing of 24 Pakistani soldiers by the U.S. forces, Islamabad had demanded that the Americans stop using the base for launching their drones. The base, in Baluchistan province, according to some reports, was built with UAE funding. There are other reports that claim that the military base was in fact used by the UAE. However, Sheikh Abdullah denied raising the issue of the airbase when he met with top Pakistani leadership and the military chief, Gen. Ashfaq Parvez Kayani. He said that NATO owed an apology to Pakistan for the unfortunate incident that led to the death of innocent soldiers.
