Military service offers benefits and challenges



The plan for all Emirati men between the age of 18 and 30 to do military service, as announced by the Cabinet, follows the example of many other countries that require their young people to perform some kind of national service. While conscription can deliver many advantages to the UAE and its youth, it also comes with some challenges.

The initiative was ordered by the President, Sheikh Khalifa, to create a new national defence and reserve force. As Sheikh Mohammed bin Rashid, Prime Minister of the UAE and Ruler of Dubai, revealed via social media, Emirati men who finish secondary school will be required to serve for nine months, while those who left school early will need to serve for two years.

The new requirement has been welcomed by many. Compulsory military service will lead Emiratis to have a stronger sense of responsibility towards their nation and also a greater awareness of the challenges facing the UAE by training them to be ready to fight to protect the nation and preserve its independence and sovereignty from any external attack. But this should not be mistaken for aggression. As Sheikh Mohammed bin Rashid explained, the UAE's "message to the world is a message of peace; the stronger we are, the stronger our message".

Conscription will also address other issues, such as youth unemployment. Experts discussed this effect during the World Economic Forum on the Middle East and North Africa in Jordan last year, suggesting that such a move would help to change the mindset of young people who are unwilling to consider taking just any job. Military service could instil in young people qualities such as discipline, vigilance, resilience and modesty. It could also teach them skills including team work and time management.

However, compulsory military service will also pose considerable challenges for the UAE military, which has been focused on a small and highly-trained force but will need to gear up to train a larger number of young men who will only serve for a relatively short time. Many of these conscripts will be physically unfit and lack even the most basic military skills. And so there are some questions to be asked here: will there be fitness programmes for those who need it before embarking on their service? Will there be alternatives for those unable to do the training because of health issues? For instance, countries such as Switzerland, Finland and Norway have the option of civilian service – often of a longer duration – in lieu of military service. Should this option be available in the UAE and if so, how would it be implemented?

There is also another question to be asked here: will military service affect young people’s education, considering that the nine months is the equivalent of an entire academic year? What would the consequences be of taking skilled young Emiratis out of the workforce for that time? The opportunity cost needs to be calculated, especially given that the country has a shortage of young professional Emirati men.

The best solution in this case is for young people to do their compulsory service between secondary school and college, where military duty would serve a similar role to the gap year that is popular in many other countries, providing a chance to experience how the world works and increasing maturity before entering university.

Yet, for all these challenges, mandatory military service will bring many benefits and is to be welcomed.

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Company name: Revibe
Started: 2022
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Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
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Results

Stage seven

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2. Adam Yates (GBR) Ineos Grenadiers, at 1s

3. Pello Bilbao (ESP) Bahrain-Victorious, at 5s

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3. Pello Bilbao (ESP) Bahrain-Victorious, at 48s

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Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

Four reasons global stock markets are falling right now

There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:

1. Rising US interest rates

The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.

Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”

At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.

2. Stronger dollar

High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.” 

3. Global trade war

Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”

4. Eurozone uncertainty

Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.

Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”

The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”

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At a glance

- 20,000 new jobs for Emiratis over three years

- Dh300 million set aside to train 18,000 jobseekers in new skills

- Managerial jobs in government restricted to Emiratis

- Emiratis to get priority for 160 types of job in private sector

- Portion of VAT revenues will fund more graduate programmes

- 8,000 Emirati graduates to do 6-12 month replacements in public or private sector on a Dh10,000 monthly wage - 40 per cent of which will be paid by government

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Mahika Gaur is the latest Dubai-raised athlete to attain top honours with another country.

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Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

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Started: June 2022
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Sector: Microfinance
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Investment stage: Series A
Investors: Family offices

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Sector: FinTech
Funds raised: $1.6 million
Current number of staff: 15
Investment stage: Pre-seed, planning first seed round
Investors: GCC-based angel investors

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