LABOUR MINISTRY ACKNOWLEDGES WIDESPREAD ABUSE OF

C O N F I D E N T I A L ABU DHABI 000945 SIPDIS DEPT FOR G/TIP, INL, DRL, NEA/RA AND NEA/ARP E.O. 12958: DECL: 2/26/2008 TAGS: ELAB PHUM ECON TC SUBJECT: LABOUR MINISTRY ACKNOWLEDGES WIDESPREAD ABUSE OF "FREE VISA" SCHEME REF: ABU DHABI 47 ¶1. (U) Classified by DCM Richard Albright for reasons 1.5 (b) and (d). ¶2. (U) Despite ongoing efforts by the Ministry of Labour and Social Affairs to stiffen immigration regulations and curtail the influx of laborers entering the UAE under false pretenses, Ministry officials have told the local press that as many as 600,000 workers -- 27% of the UAE's total labor force -- entered the country under false work contracts over the last few years. ¶3. (SBU) The work visas are obtained by UAE businesses from the Ministry of Labor for a specific economic activity, but often the alleged jobs are purely fictitious. Arriving expatriate workers, often unaware of this situation, are told by their erstwhile Emirati employers that they must go out and find their own jobs -- and usually kick-back ten percent or more of their income to their nominal employers/sponsors -- or risk deportation. So prevalent is this phenomenon, often referred to as the "free visa" scheme, that Ministry officials estimate that only 49% of the registered businesses in the country are legitimate -- the other 51% exist only to sell visas. Last year the Labour Ministry issued 260,000 employment visas. ¶4. (C) Comment: Though the UAEG has recently implemented a high-profile amnesty program to encourage illegal workers to leave the country (see reftel),this new report demonstrates the extent of the problem and the difficulties confronting the authorities in reforming the UAE labor market. The principal difficulty facing the Labour Ministry is that many Emiratis, particularly from the poorer northern Emirates, derive significant income from the exploitation of the visa/sponsorship process -- and the expatriate workers who are subject to it. A strong regional political constituency, therefore, exists for maintaining the status quo -- which may help explain why the federal Labour Ministry is so willing to go public with these rather alarming figures. Wahba