Archive for September, 2011

Response to: “Hatching a Job Plan.” UAE National News SE2411

Posted on: September 24th, 2011 by Tom Pattillo No Comments

I respect Mr. Weir’s desire to offer ideas on “Hatching a Job Plan.”
I have some difficulty with the ideas.

First, “What does job creation look like in the Arab world?” is a good question.

Second: The three suggestions (addressed individually below) do not address the UAE reality, let alone the Arab world reality.

A few assumptions:

a) The primary (or implied) target market for these initiatives are Emirati Nationals. The goal is to increase the Emirati presence and percentage in the private business sector. (Thereby decreasing the dependence on ex-pats in the private business sector throughout the UAE.)

b) There is a “culture” in the UAE that embraces the “visceral feel of entrepreneurial greatness.” (Theodore Levitt “Marketing Myopia”)

c) If money were available, the only thing missing is training related to today’s job market.

Fuel entrepreneurial activity:

The very nature of the word “entrepreneur” (the person who creates new businesses), pre-supposes a national business environment and culture that accepts and supports private enterprise, accountability, and a level playing field. If this is not the case, all efforts are merely handouts.

The UAE is a “rentier” state regardless of protestations to, and denial of, this fact. (Please remember: “Just because you ignore the facts doesn’t mean they go away.”)

Please read: http://www.semp.us/publications/biot_reader.php?BiotID=227 (or look up the definition of a rentier state)

A “rentier” state’s revenue does not come from the citizen effort, it comes from “external rent (that) liberates the state from the need to extract income from the domestic economy.”

“The government becomes an allocation state, which is very different from a production state.

A production state relies on taxation of the domestic economy for its income; taxpayers stay involved with government decisions because they are supporting them with onerous taxes.

An allocation state, by contrast, does not depend on domestic sources of revenue but rather IS the primary source of revenue itself in the domestic economy.

The primary goal of the allocation state’s economy is spending.”

“the rentier . . . violates the most sacred doctrine of the liberal ethos: hard work.”

“The economic behavior of a rentier is distinguished from conventional economic behavior ‘in that it embodies a break in the work-reward causation.’”
“Rewards of income and wealth for the rentier do not come as the result of work but rather are the result of chance or situation.”
The rentier mentality is a “psychological condition with profound consequences for productivity:

contracts are given as an expression of gratitude rather than as a reflection of economic rationale;

civil servants see their principal duty as being available in their offices during working hours;

businessmen abandon industry and enter into real-estate speculation or other special situations associated with a booming oil sector;

the best and brightest abandon business and seek out lucrative government employment;

manual labor and other work considered demeaning by the rentier is farmed out to foreign workers, whose remittances flood out of the rentier economy; and so on.

In extreme cases income is derived simply from citizenship.”

(Please refer to the website (address above) for reference information.

The efforts of all Emirati leaders are to be lauded. They are setting goals for Emiratization. They are providing education opportunities (often free) for their citizens. They are encouraging more participation by citizens in the private business sector.

However, you cannot create a “reality” that is at odds with the prevailing culture. Culture wins every time. Receiving money without attaching effort, accountability, pride, and “the respect of friends and family” will never push people to look for jobs in the private sector, let alone to take the risks associated with becoming an entrepreneur.

Entrepreneurs are a special group. They risk. They take risks. (Not unexamined and naive risks, (that just promotes failure), but they do step away from security, certainty, a guaranteed salary and lifestyle.

The suggestions to facilitate small-business loans and train workers for today’s job market, are irrelevant other that to provide opportunities to avoid reality.

My weakness is my desire to help Emirati college and university graduates enter the workforce, consider the private sector as a realistic and attractive alternative to the public sector, and help them become proud, effective, and creative citizens of the UAE and the world. And I have done and will do everything I can to help that happen.

I say weakness because I refuse to play the “colonial” game. I will not be a sycophant. I will say and repeat the obvious rather than stay silent and take the rewards; job, high salary, no accountability, and false credibility based on past education and experience. (I much prefer nepotism to cronyism. With nepotism you know what you are getting. With cronyism what you are getting is just a guess (without any reliable vetting). And only the new employee and his “crony” benefit.)

Please know, however, that I continue to be a huge fan and supporter of the Emirati college and university graduates (mostly women) with whom I have worked. I believe, however, that an employment strategy that ignores the cultural reality of a nation is both unethical and immoral.

A problem is either managed or solved. Pseudo managers, experts, and consultants benefit from “managing” a problem. To solve the problem means they stop getting paid to solve the problem. As long as these people can make it “seem” like they are doing something productive, they will NEVER solve the problem. (They will however, vigorously and vehemently attack anyone who questions their recommendations.)

Do I have the answers? No.

Do I believe there are processes both to address the issues and to develop (with continuous and in depth participation by all Emirati citizens)? Yes.

Do I think that ideas can be generated that include the rentier reality and it cultural impact, while generating a culture of, and a desire to be part of, the private sector. Yes.

If you agree with my response to Mr. Weir’s article, do something, speak to those in power, challenge them to accept rather than deny, and call on their national pride, their love of their children, and the potential of the United Arab Emirates, to be the stimulus that moves them to action.

Other resource: http://supportinglocalentrepreneurship.wordpress.com/