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UAE to offer unemployment insurance in bid to retain workers

Two women working in an office.
Two women working in an office. The UAE cabinet wants to "provide a social umbrella for workers", it said.

The United Arab Emirates will introduce a form of unemployment insurance, its cabinet said on Monday – the latest reform by the Gulf country as it strives to attract talent and investment amid increasing regional competition.

Insured workers would receive some money for a limited time period if made unemployed, UAE Prime Minister and Vice-President Sheikh Mohammed Bin Rashid Al-Maktoum wrote on Twitter, citing a cabinet decision.

“The intention is to strengthen labour market competitiveness, provide a social umbrella for workers and establish a stable working environment for all,” the tweet said.

The post from Sheikh Mohammed Bin Rashid Al-Maktoum, the ruler of Dubai, did not specify whether the unemployment support would apply equally to UAE citizens and non-citizen residents.

Permission to reside in Gulf countries such as the UAE, where foreigners make up 85 percent of the population according to the International Monetary Fund, has traditionally been tied to employment – and loss of job usually means the worker has to leave the country.

Gulf states Qatar, Oman, Kuwait and Saudi Arabia have provided some form of unemployment support to citizens. Bahrain also has a form of jobless insurance for resident non-citizen workers.

As Saudi Arabia, the largest Gulf state, opens up its economy the UAE has been pushing to retain the initiative over its neighbour, introducing new visa types and social reforms to attract and retain skilled workers and their families.

The UAE switched to a Saturday-Sunday weekend this year to move closer to global markets. In the past 18 months it has also overhauled some laws, decriminalising alcohol consumption and pre-marital cohabitation.

The cabinet also announced new quota targets for the employment of Emirati citizens in the private sector – a long-standing policy known as “Emiratization”. It wants to see Emirati nationals representing 10% of private sector staff in companies with more than 50 employees by 2026, with rates increasing 2 percentage points a year until then.