UAE'S POPULATION TAPESTRY: AN OVERVIEW

C O N F I D E N T I A L SECTION 01 OF 04 ABU DHABI 005078

SIPDIS

STATE FOR INR AND NEA/ARPI

E.O. 12958: DECL: 12/17/2010
TAGS: PGOV PREL PINS SOCI IR PA IN AE
SUBJECT: UAE'S POPULATION TAPESTRY: AN OVERVIEW

REF: ABU DHABI 1434

Classified By: Classified by CDA Martin Quinn, reasons 1.4 (b) and (d).


1. (C) Summary: While many UAE nationals see the ongoing
rapid expansion of the country's expatriate population as a
positive factor contributing to the UAE's 8% annual economic
growth rate, others see a potential threat to their political
and social fabric. Officially, foreigners are welcome in the
UAE, where they hold an estimated 98 percent of the jobs in
the private sector, according to the Ministry of Labor and
Social Affairs. Long a key to the country's modernization
and prosperity, expatriate labor is attracted to the UAE by
economic incentives that surpass what they could expect to
find in their home countries. Many UAE nationals welcome, or
even insist upon, expatriate workers in their homes and
businesses, but just below the surface, there is sometimes
another view that blames foreigners for most of the crimes
that are committed and for introducing "different" values.


2. (C) Summary continued: New census figures due to be
announced in early 2006 likely will show that the proportion
of expatriates continues to grow, despite government measures
to control immigration at ports of entry and to encourage
local population growth and greater "Emiratization" of the
work force. While the UAEG continues to debate whether to
take drastic new measures to address the population
imbalance, the country's leadership will have to ensure that
the economic needs of citizens and non-citizens are being met
in order to prevent dissatisfaction. End Summary.

Background
--------------


3. (U) The UAE's demographic imbalance is a relatively recent
phenomenon. In 1968, Emirati nationals comprised 64 percent
of the population. As waves of immigrants poured into the
UAE to help build the oil-based economy, the percentage of
UAE nationals shrank to 24 percent by 1995 when the last
census was taken. The 2005 census results, to be announced
in early 2006, are expected to show that nationals make up
only 21 percent of the total population. In Dubai, the
percentage of nationals is believed to be less than 10
percent. Indians, Pakistanis, and Bangladeshis will remain
the three largest non-Emirati groups in the new census, with
Indians (28 percent) the largest single nationality group in
the UAE. At the end of last year, the UAE population was
estimated at 4.3 million.


4. (C) While Emiratis acknowledge that the UAE owes much of
its rapid modernization and prosperity to the legions of
expatriate workers who have come here, some are disturbed by
the social, economic, and security ramifications of the
population imbalance. The UAE leadership has publicly
acknowledged these challenges, and has raised it in the
context of our counterterrorism, law enforcement, and trade
(labor) cooperation. Labor Minister Al Ka'abi told a USG
visitor that he did not want his children to see his picture
in a museum as an example of the "former rulers" of the UAE,
in a future UAE with a "president named Khan" (referring to
the large Pakistani population). He stressed that no one in
the UAE would allow that to happen. Academics, news
commentators, and the UAE-based think tanks have all
recommended solutions to the problem. Mutar Abdallah, a
demographic expert at the UNDP office in Abu Dhabi, told Pol
Chief that the census will give the UAEG a basis for
developing measures to address the challenge.

Fear of Imported Violence
--------------


5. (C) The possible security threat posed by expatriates from
countries in turmoil and countries that export terrorism
concerns many Emirati policymakers and observers. UAE
officials cite these concerns as reasons to look closely at
the question of political rights of foreign laborers,
including the right to form trade unions, which are not yet
legal in the UAE. The likelihood of unrest seems remote,
however, as the UAEG is quick to "deport its problems," and
expatriates are reluctant to take actions that may lead to
deportation, as most support extended families back home on
their incomes. In an interview published by the Oxford
Business Group in November, Abu Dhabi Crown Prince Sheikh
Mohammed bin Zayed (MbZ) directly addressed this threat in
response to a question about terrorism. After 9/11, the UAE
"took action against every individual who had a relationship
with Al Qaida, whether local or foreign," he added. "I think
that was the most important step we took in keeping the UAE
secure."


6. (C) In academic Fatima Al Sayegh's history class at UAE
University, the main concern of male students is how the
influx of foreigners affects Emirati society. "Foreigners
bring with them their history, their values. They also bring
crime," Al Sayegh said. Ministry of Interior statistics
suggest that nationals are fully and perhaps even
over-represented in criminal activity. In 2003, of the 1,267
persons arrested for drug-related offenses, more than a third
) 452 -- were Emirati nationals. Of the 5,157 persons
imprisoned for all offenses, close to 20 percent ) 872 --
were Emiratis.


7. (C) The huge, mostly South Asian, expatriate population
"is a problem for everybody -- at all levels," Federal
National Council (FNC) Secretary General Mohammed Al Mazrouie
told Pol Chief. Over the years, he said, FNC members have
engaged in vigorous debates on the issue. Al Mazrouie
recalled heated discussions about quotas to bring in fewer
South Asians, replacing them with more East Asians and Arabs.
He said there has been talk about "bringing more quality
people" and "raising fees and taxes to make life
uncomfortable for expatriates who are undesirable." MbZ has
told us that the UAE would prefer to have East Asian workers
over Arab and South Asians. The mass deportation of any
group is not an option, Al Mazrouie said.


8. (C) The demographic crisis touches Emirati nationals'
daily lives. "You feel uneasy at being a minority in your
own country," a political-military analyst at the UAE Armed
Forces' Directorate for Military Intelligence (DMI) told Pol
Chief. "Problems overseas can come here. It could become a
security nightmare." (Note: According to 2003 data, 76
percent of the population is Muslim, 9 percent is Christian,
and 15 percent is "other" )- presumably mainly Hindu.
Approximately 15 percent of Muslims are Shi'a. Local
observers estimate that 55 percent of the foreign population
is Muslim, 25 percent is Hindu, 10 percent is Christian, 5
percent is Buddhist, and 5 percent belongs to other
religions. End note.)


9. (U) Lopsided demographics worry all Gulf states, so much
so that Gulf Cooperation Council (GCC) Secretary General
Abdul Rahman Al Attiyah told GCC labor ministers meeting in
Manama November 22 that the estimated 10 million foreign
workers in the region who remit $30 billion annually to their
countries constitute a "national security issue." (Note:
Given the difficulty foreign workers have in investing in the
UAE )- either in the property market or the stock market )-
and the lack of permanent resident status, the fact that
foreign workers remit the bulk of their salaries home is not
surprising. End note.)

They Come To Work
--------------


10. (C) While the Gulf countries have legitimate reasons to
worry about such things as the spillover effect of tensions
in South Asia and elsewhere, the demographic imbalance is
fundamentally a labor issue, and future solutions are more
likely to address the make-up of the labor market. From the
perspective of Emiratis, the overwhelming number of
expatriate workers is a daily reminder of their economy's
dependence on a foreign labor force. The UAE national share
of the labor market barely increased from 9.1 percent in 1995
to 9.3 percent in 2004, according to the June 9 "Gulf News."
Emiratis make up only 2 percent of the private sector
workforce. The report laid the blame on the UAE's public
education system, and obstacles (social constraints) that
prevent women from entering the labor market. (Comment: From
our experience and conversations, women generally succeed as
employees and are well represented at universities and in the
public sector. The biggest social obstacle to fuller
utilization of UAE nationals is the perceived lack of a work
ethic among the majority of UAE men, and the concern
expatriates sometimes express about having to supervise
Emirati males. End comment.)


11. (C) Foreign workers hold jobs that Emiratis either do not
want, or jobs that they would like to hold if employers would
only shed their less-costly expatriate workforce and begin
paying double or triple for qualified UAE nationals. IMF
estimates that the unemployment among UAE nationals was over
11 percent in 2004. According to the National Human Resource
Development and Employment Authority, an authority charged
with promoting UAE national employment in the public and
private sectors, more than 40,000 UAE nationals may be
unemployed, a figure which brings the ratio up to almost 16
percent. As one scholar wrote in the "Middle East Review of
International Affairs" in March 1999, UAEG officials are
"aware that unemployment of nationals has been a rallying
point for the Islamic opposition in Saudi Arabia." Abu Dhabi
nationals generally view the thousands of low-paid Asian
workers, some of whom stage protests in Dubai for not
receiving salaries on time, as a security threat -- even if
it is usually Emirati employers who are directly responsible
for the poor working conditions. In July, the "Gulf News"
cited a Ministry of Labor official as saying that 370,000
expatriates were working in the UAE illegally.

No Shortage of Solutions
--------------


12. (C) In the past, the UAEG's approach to the demographic
problem lacked coordination. "There was no higher committee.
There were smaller committees within different ministries
and agencies," said the UNDP's Mutar Abdallah. All that
could change once the new census figures come out. UAE
officials have tried and/or contemplated numerous measures,
mostly labor- and immigration-related, to address the
demographic imbalance:

-- National ID card: This program, established in December
2004, is designed to help labor and law enforcement
authorities get a better grip on the nature of the
demographic problem. The cards are being issued to both UAE
nationals and expatriates. ID cards, which can be used as a
travel document to travel in GCC countries, as well as a work
permit and driver's license.

-- "Emiratization": The policy of encouraging private and
public sector employers to hire UAE nationals has yielded
poor results. Most Emiratis are employed by the public
sector with its relatively higher benefits. The skill levels
of many Emirati graduates do not meet the high standards of
the UAE's state-owned enterprises or of the private sector.
The UAEG mandates quotas for federal employment, and for the
banking, insurance, and trade sectors; however, companies
have had difficulties in recruiting and retaining qualified
national employees, who are also more expensive and require
more benefits. In the public sector, where targets of
between 60 and 90 percent were set for most posts, the
"emiratization" plan has been largely successful in replacing
expatriate workers with Emiratis. In contrast, most of the
companies in the banking, insurance, and trade sectors were
not able to meet even very modest quotas (reftel).

-- Social engineering: The UAEG and institutions such as the
Marriage Fund have tried to increase the national population
by providing incentives to encourage citizens to have more
children. Although the birthrate of nationals is four times
higher than that of expatriate residents (in large part
because the overwhelming majority of expatriates are
"bachelors," whose families, to the extent that they have
them, reside in the home country),the quantity of national
births remains smaller, comprising about 45 percent of the
country's total births in 2003.

-- Citizenship: The UAEG grants citizenship to a very small
number of long-time residents of Arab extraction on a
case-by-case basis. Giving citizenship is a major issue
because it comes with free tuition, labor and political
rights. The ranks of the armed forces are full of former
Omanis, Egyptians, and Palestinians, and the various police
forces are full of former Yemenis, all "generally above
reproach," the DMI analyst said. The UAE deliberately
granted citizenship to these individuals to help the
country's development. In the justice sector, the UAE
recruits judges from Morocco, Mauritania, and Sudan who
adhere to the maliki school of jurisprudence. Most Imams are
from the UAE, Egypt, and Sudan. The UAEG is unlikely to
grant citizenship to thousands of long-time residents, our
contacts say. That would be "national suicide," according to
the DMI analyst.

-- Border controls: The border between the UAE and
neighboring Oman and Saudi Arabia is being fortified with a
miles-long barrier and the deployment of border patrols. UAE
immigration authorities check documents of non-GCC residents
traveling between the two countries. Iris-recognition
systems installed at 32 checkpoints around the country foiled
the attempts of approximately 25,000 immigrants to enter
illegally from 2002-2004. These migrants were attempting to
enter the UAE after having been deported, an Abu Dhabi Police
official told "Gulf News."

13. (C) Fatima Al Sayegh, a Dubai native, is skeptical that
most Emiratis would willingly give up their domestic workers
(often three or four in a household). Ali Tayfour, a
director in the Ministry of Economy and Planning's Department
of Planning Statistics, sees no solution in the short-run.
"The UAE needs workers. The population of the UAE is very
small; thus the UAE needs a foreign labor force. The other
problem is that UAE nationals do not accept work in all
occupations, such as construction worker or taxi driver.
Everyone wants to be a white-collar worker," said Tayfour, an
Egyptian. Some of our Emirati interlocutors rejected such
assertions. "We need to destroy that myth," the UNDP's Mutar
Abdullah said.

Comment:
--------------


14. (C) While the search for solutions to the demographic
imbalance continues, the UAE leadership will at a minimum
want to ensure that the economic needs of citizens and
non-citizens are being met, both to reflect the commitment
they have made to their constituents, and to prevent
dissatisfaction. On the security front, the UAE must be able
to distinguish legitimate foreign laborers from terrorists.
As a stable and prosperous country that has welcomed people
from many nations, the UAE has been a primary destination for
those in the broader region who seek to escape economic and
political insecurity within their own nations. In case of
major future conflicts or economic downturns elsewhere, the
UAE may be the top choice of large numbers of refugees
seeking prosperity abroad. These security concerns are the
major reason UAE officials cite for limiting workers' rights,
particularly rights of association and collective bargaining.
Even those labor initiatives mandating the formation of
unions allow full membership only to UAE nationals, with
expatriates being allowed to join employee associations.
Over the long term, the UAEG may find it prudent to grant at
least some political rights to non-citizens in order to
maintain the country's social stability.
QUINN