Geneva, June 17:Saqr Ghobash, UAE Labour Minister, has reaffirmed the UAE’s support for the International Labour Organisation (ILO) and expressed his ministry’s strong desire to move forward on the path of boosting cooperation with the ILO to achieve mutual interest and common goals.
In an address he delivered to the 98th session of the ILO conference on Tuesday evening at the UN Headquarters, the UAE minister attributed the unprecedented economic boom in his country over the past years to the UAE’s open economic policy and other factors. He expressed his country’s support for efforts being made to reform the global financial system, to improve the control tools in the financial services sectors and to strengthen international cooperation to ensure transparency and to provide better protection to investors and consumers alike.
Following is the full text of the minister’s address:
Your Excellency, the Chairman of the 98th session of the International Labour Conference, Your Excellency, the Director General of the International Labour Organisation (ILO), Your Excellencies, Ministers and Heads of Delegations, Distinguished Guests,
Allow me first to convey the best wishes of the Government of the United Arab Emirates to the ILO on the occasion of its 90th anniversary of its establishment. I would like to take this opportunity to confirm the commitment of my government to the further development of the ILO and the desire of the UAE Ministry of Labour to strengthen its collaboration in pursuit of mutual interests and objectives.
I would also like to thank the organisers for allowing me to address the ILO Summit on the topic of the Global Job Crisis.
The UAE economy has seen a pattern of rapid integration into the world economy. The unprecedented economic boom that the UAE has experienced in recent years can be explained by its open-door economic policy, coupled with appropriate and encouraging internal and external factors like the rise in world oil prices and the increase in the inflow of foreign direct investment into our domestic economy.
It is natural, though, that this open policy on the economy and trade, coupled with the impact of globalisation generally, would expose our economy to the impact of factors from abroad, as we see today.
Consequently, the financial crisis, which first erupted in the sub-prime mortgage sector in the United States in 2008, then spilling over into most sectors of economic activity across the world, has also overshadowed the economies of the Gulf region, including our national economy.
As is widely known, two key factors have contributed to the spread of this crisis.
First: The overlapping and inter-relationship between the world’s economies as a result of trade and the movement of capital.
Second: The financial slowdown and shortage of liquidity experienced by the world’s financial markets, coupled with waning confidence among both investors and consumers.
These two factors have had direct impact on the economy and labour market in the UAE. Other internal factors have also interacted with the implications of the global financial crisis. These have included the flight of some foreign assets that were transferred to UAE banks as a result of earlier speculation about the possible appreciation of our national currency.
Other factors have included the unprecedented rise in prices in the UAE real estate market in 2007 and 2008, which negatively affected liquidity supply and led to a drop in the ratio of bank deposits against loans.
However, since the emergence of the early signs of the crisis, the UAE Federal Cabinet has taken important proactive and preventive measures, which have mitigated the impact of the crisis. Thus, the government pumped sufficient liquidity into the banking sector amounting to $33 billion, and guaranteed all deposits at national and foreign banks operating in the country for the period up to the end of 2013.
The global financial crisis has had a major impact on the property market and banking and financial services.
Yet, at the same time, it has had a limited effect on the UAE job market. It is expected that recruitment and job creation will continue to be at lower rates compared with those seen over the last two years.
However, in the UAE case, the picture might be slightly different. It is not anticipated that unemployment rates will increase among the UAE workforce, the majority of whom are expatriates. What is anticipated is a slow down in the rate of arriving workers, coupled with a slight increase in the number of those who leave the country on completion of the projects for which they were brought. It is also expected that access by UAE citizens to the job market in the private sector will be faced with some challenges, given the fact that dwindling growth rates will limit the creation of lucrative job opportunities in this sector.
In this regard, the Labour Ministry has taken bold steps to address the fallout of the crisis in the short term, including:
I. Helping companies to adapt to the crisis by encouraging flexibility in the job market.
II. Protecting those sectors of the workforce that are more prone to redundancies by ensuring that their salaries and end-of-service benefits are fully paid.
III. Supporting and providing adequate training for unemployed UAE citizens.
We are, at the same time, fully aware of the need to prepare the job market for the post-crisis period. Despite the difficulties, we see this crisis as an opportunity to re-consider the priorities of national economies, including our own national economy. We should move ahead with developing value-added economic sectors in accordance with our federal government’s strategy. We should also focus on developing small and medium-sized enterprises, to create job opportunities for our citizens and to attract skilled foreign labour.
We are also aware that such plans require closer cooperation with our regional partners, including the GCC and Arab countries and the Asian labour source countries. We also seek to make good use of the vast expertise of the relevant international organisations.
I am looking forward with particular interest to the issuing of the final report of the committee formed by this summit to enable us to identify new areas for cooperation between the UAE and ILO.
I would like to seize this opportunity to express the UAE’s support for the efforts being made to reform the global financial system, to improve the monitoring standards and tools in the financial services sectors, and to strengthen international cooperation to ensure more transparency and protection of the rights of investors and consumers alike.
—Agencies