UAE LABOR MINISTER ON TRAFFICKING, SPONSORSHIP, AND STATE OF

C O N F I D E N T I A L ABU DHABI 001010 SIPDIS DEPARTMENT FOR NEA/ARP E.O. 12958: 10/26/2019 TAGS: ELAB PGOV PHUM KTIP AE SUBJECT: UAE LABOR MINISTER ON TRAFFICKING, SPONSORSHIP, AND STATE OF THE LABOR MARKET Classified by Ambassador Richard Olson for reasons 1.4 (b and d). ¶1. (C) Summary. Addressing a group of foreign business leaders and diplomats on October 27, UAE Minister of Labor Saqr bin Ghobash Saeed Ghobash discussed the country's problem with trafficking in persons, its fragmented labor market, the challenges of Emiratization, and high unemployment rates among young people. Privately, Ghobash told the Ambassador about a major change in the sponsorship law that will allow the free movement of laborers after a certain period in the country. End Summary. ¶2. (SBU) The keynote speaker at a luncheon organized by the American Chamber of Commerce and business groups from Canada, UK, France, Australia, and Switzerland, Ghobash was surprisingly frank discussing labor market challenges and the Ministry's policy responses. LABOR MARKET CHALLENGES -------------- ¶3. (SBU) Acknowledging the country's problem with human trafficking and what he termed "involuntary labor," Ghobash also admitted the government's policy of Emiratization has not yet achieved the desired result of integrating UAE nationals into the private sector economy. Ghobash identified a list of challenges for the MOL including: lack of reliable national employment data; job growth at the bottom of the economic scale, primarily for the unskilled, uneducated workers; and increasing unemployment among young people. POLICY RESPONSES -------------- ¶4. (SBU) Ghobash said that responsive central government policy-making can overcome UAE's labor market problems. He said the administration of labor policy must be centralized at the Federal level, and that the MOL must shift from an operational focus to one of policy formulation. He predicted the Labor Law of 1980 would be heavily amended in 2010. ¶5. (SBU) Many questions from the audience addressed the electronic wage payment system, recently enacted by the MOL in conjunction with the Central Bank. Ghobash pledged the MOL's support in working with individual employers to correct flaws in the new system. He made it clear the MOL would continue with its implementation schedule until all private sector laborers were paid through the electronic deposit system as required by law. (Comment: there are many advantages for the USG to this system, including reducing the possibility for abuse of workers by establishing a record of payment of wages. Moreover, such a system reduces the need for hawalas, thereby supporting our terrorism finance objectives.) ¶6. (C) Ghobash (protect) told the Ambassador privately that a major change to the labor sponsorship law was forthcoming. The plan would allow laborers to freely change employment after a certain period of time in the country. The change has government approval but has not been announced publicly because the UAEG wants to warm the country's major employers to the idea first. Ghobash admitted that this was an issue of great sensitivity for the UAE private sector. ¶7. (C) Comment. An experienced diplomat (he was formerly Ambassador to the US),Ghobash's candid appraisal of economic and labor issues was well-received if somewhat unusual for the always sunny UAEG. The inclusion of human trafficking in a discussion of labor market challenges for an audience of expat business leaders suggests the UAEG views the issue as one impeding economic growth in addition to one of humanitarian import. Changes in the UAE's sponsorship laws would be welcome, and signal an important shift for the UAE, perhaps designed to maintain its leading economic role in the GCC, as Bahrain and other nations consider similar steps. End Comment. OLSON