UAE labour shortage on the horizon?

The labour reforms proposed by the government could amount to "too little too late" as many of the emirates' contractors struggle to recruit more Indian workers.
 
Indian labourers are increasingly turning down construction job offers in the UAE because salaries are stagnant, while wages in the subcontinent are rising as a result of India's own construction boom.

Property development has surged in India since 2002, helped by an annual doubling in demand for office space as foreign firms continue to invest in the country's information technology (IT) sector and call-centres in Mumbai, Delhi, Bangalore and Hyderabad.

India's continuing construction boom is also due in part to the government's favourable policies.

Income tax exemptions for residential complexes, IT parks and outsourcing centres have been introduced, while nationalised and private banks have become more liberal in handing out housing loans.

Bad for recruitment
 
These factors could negatively impact construction recruitment firms, who are finding it more and more difficult to convince Indian labourers to work in the UAE.

This is because many Indian labourers are reluctant to pay the transaction costs to move here, which effectively make their wage packets lighter and leave them with debts to pay.

Bondage
 
"The workers pay companies at home [in India] to come to the UAE and are in a form of debt bondage before they even arrive in the country," says Hadi Ghaemi, US-based Human Rights Watch (HRW).

"The problems start at home and then get worse with the conditions the workers have to endure in the UAE."

Add to that the burden of leaving family behind and it's easy to see why so many Indian labourers would rather work at home.

Coupled with the global media coverage of the recent violent protest, this trend could well leave the UAE with a serious labour shortage problem on its hands because of the heavy reliance the country has on cheap labour imported from India. 
 
"If conditions in the UAE improve then more workers will want to work there," adds Ghaemi.

"We have interviewed a lot of people who regretted going to the UAE but it takes two years to pay off the loans they took to come so they are trapped for that amount of time."