Emiratisation exists to help teach Emiratis that they are the protagonists in the story of their country, a leading education expert has said.
Martin Spraggon, the associate dean of academic affairs at the Mohammed Bin Rashid School of Government, believes Emiratisation is "a fantastic opportunity, if addressed smartly”.
"It's very important for the UAE to invest in Emiratis. I think Emiratisation is a great initiative as it builds in-house capability, as opposed to relying on exogenous competencies," said Mr Spraggon.
“A main challenge to the Emiratisation initiative is that it’s a matter of creating a culture and mindset among people here. They need to understand that they should be the protagonists and stars in the success of their country as opposed to relying on external knowledge. This will take time.
"I think more and more Emiratis are embracing the legacy they need to carry on."
Many Emirati alumni at his institute have expressed interest in pursuing higher studies at top universities such as Harvard and Massachusetts Institute of Technology.
The educator, who has lived in UAE for 13 years, said he has seen Emiratis "embracing the challenge".
The National has previously written about staff retention posing a challenge to Emiratisation.
A 2017 study found that almost half of the 500 companies surveyed say their Emirati employees quit within three years. The survey revealed that 46 per cent of companies said the average employment of Emiratis was less than three years.
Omaira Al Olama, the Emirati managing director of ALF Administration, a training company that prepares Emiratis for the workplace, said that the biggest hurdle on the path to Emiratisation is the lack of willingness from seniors to train young people.
Clarity is required on what Emiratisation means and entails for Emiratis as well as UAE residents, she said.
"People need to understand what Emiratisation means. It doesn’t mean that Emiratis will be taking over all the jobs — this is the mindset that has come through with a lot of the community.
"A lot of expatriate managers and Emiratis over the age of 45 or 50 believe that the younger generation will come in and take their jobs. People view them as threats.
"Emiratisation is not a right or privilege. It’s about developing, training and the consistency of an organisation. That’s Emiratisation," said Ms Al Olama.
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She also said that Emiratisation meant residents and Emiratis working together for the development of the nation.
"It means to train and develop Emiratis so that they can work alongside residents and Emiratis who have had years of experience.”
Ms Al Olama warned that another big challenge is that Emiratis who are joining the workforce face a backlash from residents and older Emiratis.
"They think 'why should I develop and train you when you are going to take my job?'
When a young Emirati does get a job they are not trained adequately, "seniors don’t want to train them because they think these young Emiratis will take their jobs".
"This is not true at all. If that mindset doesn’t change, nothing will change."
In February, the government asked companies to prioritise Emiratis over residents for jobs in about 2,000 companies as part of a drive to push more UAE nationals into the private sector.
Four-hundred job roles were selected by the Ministry of Emiratisation and Human Resources that Emiratis would be preferred for.
Officials said companies would not be compelled to take on UAE nationals, but give them an interview or opportunity they may not have otherwise been given.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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