UAE jobless rate stands at 4% in 2008, says ministry survey

The UAE unemployment rate increased slightly to around four per cent in 2008 from nearly 3.45 per cent in 2007 but it remained one of the lowest jobless levels in the world, according to official figures.

Although expatriates account for more than two-thirds of the country's population, the unemployment rate among them was far lower than in UAE nationals, showed the figures by the Ministry of Economy.

A survey by the Ministry on the UAE workforce showed the unemployment rate among UAE citizens was as high as 12.7 per cent while that among expatriates was only around 2.6 per cent.

"At the UAE level, the unemployment rate stood at around four per cent… it was estimated at nearly 6.6 per cent in rural areas and 3.4 per cent in urban areas as was evident from the survey, which covered most of the population and the country's areas," the ministry said in a report.

A breakdown showed unemployment rates were relatively high among high school and university students, standing at 6.8 and 4.6 per cent respectively. It was estimated at around 3.4 per cent among preparatory school students, 2.8 per cent among elementary students and 0.7 per cent among illiterates.

The report explained that the rate was high in university and high school students because most of them are above the 15-year work age and do not have jobs on the grounds they want to complete their studies.

It showed the private sector provided the bulk of the jobs in the UAE, accounting for nearly 63.3 per cent of the total workforce. The federal government sector accounted for around 7.9 per cent while 10.7 per cent worked for the local government and 4.1 per cent for joint local-federal departments. The rest were in diplomatic missions and houses, mostly domestic maids.

A breakdown showed UAE citizens are concentrated in the federal public sector as they accounted for 45 per cent of the total local manpower in the UAE. Nearly 35 per cent of them were in the local departments.

Sector-wise, trade provides the highest number of jobs in the UAE, accounting for 16.3 per cent, followed by domestic work and construction, which provided 12.8 per cent and 12.3 per cent respectively. Around 8.7 per cent are in the industrial sector and nearly eight per cent in real estate and supporting services.

Experts said despite the increase in the jobless rate, the UAE maintained its position as having one of the lowest unemployment levels in the world. On the Arab level, it has one of the best records along with Kuwait and Qatar. The jobless rate has remained low despite a rapid growth in the population of around seven per cent over the past decade.

But experts said growth in the gross domestic product has also been high in the past few years, swelling by an average six per cent in real terms and more than 15 per cent in current prices in the past five years.

From around Dh697 billion in 2007, the UAE GDP was projected to have leaped to nearly Dh800bn, while the gross capital formation, or public and private investment, soared from Dh123bn to Dh143bn.

The report gave no breakdown for the emirates but in 2005, Dubai had the lowest jobless rate in the UAE, standing at 1.7 per cent.

Abu Dhabi had the second lowest rate of 3.5 per cent, while Ras Al Khaimah had the highest rate.

The report estimated the UAE's workforce, aged above 15 years, at around 2.84 million in 2007 and those employed at 2.742 million. It forecast the workforce would reach 3.043 million in 2008 and those employed to around 2.93 million.

The figures showed the workforce accounted for 63.2 per cent of the UAE's total population of 4.488 million in 2007 and was projected to increase slightly to 63.8 per cent of the 4.765 million population in 2008. In 2009, it is expected to climb to 64.4 per cent of the population of 5.066 million.

Experts believe the real jobless rates in the UAE are higher than the official figures on the grounds all the expatriates sponsored by individuals or companies but do not have jobs are calculated in the employment list by the ministry.

"There is a hidden unemployment in the UAE. This problem has existed for ages because many individuals or companies are sponsoring foreigners for money without giving them jobs," said an economist in an Abu Dhabi-based bank.

"Actually this is more a social and security than an economic problem because the UAE economy has the capacity to absorb more jobs given its high growth over the past few years. But from the other perspective, the high jobless rate among expatriates normally poses a social and security threat to the country."

High growth allowed the UAE to maintain its position as the second largest Arab economy after Saudi Arabia while it also remained the second after Qatar in terms of per capita income, which exceeded Dh170,000 last year.

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