Exploring the Nexus between Highly-Skilled Migrants, the Kafala System, and Development in the UAE

Abstract

This article explores the nexus between immigration of highly-skilled persons and economic growth in the Arab Gulf states, until now a significantly understudied topic. It is argued that long-term growth primarily stems from technological progress and the article conducts a qualitative analysis of the degree to which the group of highly skilled migrants contributes to technological progress. The paper focusses on the United Arab Emirates (UAE) but reflects general issues pertaining to the Arab Gulf states. It concludes that the policy framework that manages the migration system, the so-called Kafala (sponsorship) system, indeed has positive effects, namely that it ensures that all migrants are in employment and the skills of the migrants complement rather than overlap with the skills of the locals. However, asymmetric power balance between sponsor and migrant, the built-in inflexibility in relation to job mobility, and the lack of a broader sense of inclusion in the hosting country all diminish the contribution of the highly-skilled migrants to these economies. A culture of transience prevails which leads to short term thinking, less innovation and less likelihood of entrepreneurship. Finally, the article finds that due to demographic realities, lack of incentives for the migrants to pursue knowledge transfer and the general educational level in society, transfer of technology most likely takes place from one migrant to the next, thereby bypassing the local population.

Keywords:

• highly-skilled migrants
• Arab Gulf States
• UAE
• growth
• technology
• Kafala
• sponsorship

ORCID

Martin Hvidt http://orcid.org/0000-0003-2148-6970

Notes

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2 Baldwin-Edwards, “Labour Immigration and Labour Markets in the GCC Countries: National Patterns and Trends”, research paper on Kuwait Programme on Development, Governance and Globalisation in the Gulf States 15, LSE, London (2011), p. 35.

3 Naufal, “The Economics of Migration in the Gulf Cooperation Council Countries”, Handbook of the Economics of International Migration, ed. Chiswick and Miller (2015), p. 1612.

4 Papademetriou and Sumption, The Role of Immigration in Fostering Competitiveness in the United States (2011), p. 4.

5 Nathan, “The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature for Receiving Countries”, IZA Journal of Migration 3.4 (2014), p. 4.; Seidelin, Blomhøj, and Kristensen, Er Højtuddannede Indvandrere en god forretning for Danmark? (2016); Fairlie and Lofstrom, “Immigration and Entrepreneurship”, Handbook of the Economics of International Migration, ed. Chiswick and Miller (2015), pp. 877–911.

6 Schittenhelm and Schmidtke, “Integrating Highly Skilled Migrants into the Economy: Transatlantic Perspectives”, International Journal 66.1 (2010), p. 128.

7 Solimano, International Migration in the Age of Crisis and Globalization: Historical and Recent Experiences (2010), p. 160.

8 Shachar and Hirschl, “Recruiting Super Talent: The New World of Selective Migration Regimes”, Indiana Journal of Global Legal Studies 20 (2013), p. 71.

9 See: Borjas, Heavens’s Door: Immigration Policy and the American Economy (1999); Ferrie and Hatton, “Two Centuries of International Migration”, Handbook of the Economics of International Migration, ed. Chiswick and Miller (2015), pp. 53–88; Jacobson (ed.), The Immigration Reader: America in a Multidisciplinary Perspective (1998); Solimano, International Migration in the Age of Crisis and Globalization.

10 Assisted by a librarian from the University Library at University of Southern Denmark, a systematic search was conducted combining proxies for the three key terms: highly-skilled migrants, development/growth, Arab Gulf countries. When all key terms were included the search only returned a small hand full of hits.

11 Solimano, International Migration in the Age of Crisis and Globalization, p. 158.

12 International Centre for Migration Policy Development, “Highly Skilled Migration”, paper presented at the Fourth Coordination Meeting on International Migration, New York, 26–27 October 2005, p. 2.

13 Oishi, “Redefining the “Highly Skilled”: The Points-Based System for Highly Skilled Foreign Professionals in Japan”, Asian and Pacific Migration Journal 23 (2014), p. 428ff.

14 Brücker et al., “Global Trends in Highly Skilled Immigration 1”, Brain Drain and Brain Gain: The Global Competition to Attract High-Skilled Migrants, ed. Boeri et al. (2012), p. 3.

15 Pollack, “Is Britain Closing Its Door to Talent?”, Financial Times, 18 July 2014.

16 Bodvarsson and Berg, The Economics of Immigration: Theory and Policy (2009), p. 221ff; Todaro and Smith, Economic Development (2011), pp. 128–29.

17 Kropf, Oil Export Economies: New Comparative Perspectives on the Arab Gulf States (2016), p. 69.

18 Bodvarsson and Van den Berg, The Economics of Immigration, p. 233.

19 Papademetriou and Sumption, The Role of Immigration in Fostering Competitiveness in the United States, p. 3.

20 International Organization for Migration, International Comparative Study of Migration Legislation and Practice (2002).

21 Van de Ven and Voitchovsky, “Skilled Migrants and Labour Market Integration: How Important is the Selection Process?”, IZA Journal of Migration 4 (2015), p. 22; Papademetriou and Sumption, The Role of Immigration in Fostering Competitiveness in the United States, pp. 9–10.

22 Schittenhelm and Schmidtke, “Integrating Highly Skilled Migrants into the Economy: Transatlantic Perspectives”, p. 142.

23 See, Ulrichsen, “Knowledge Based Economies in the GCC”, The Political Economy of the Persian Gulf, ed. Kamrava (2012).

24 Hvidt, “Economic Diversification in the GCC Countries: Past Record and Future Trends”, research paper Kuwait Programme on Development, Governance and Globalisation in the Gulf States 27, LSE, London (2013), p. 4ff; Hvidt, “The State and the Knowledge Economy in the Gulf: Structural and Motivational Challenges”, The Muslim World 105 (2015), p. 26.

25 Hvidt, “Economic Diversification and Job Creation in the Arabian Gulf: A value Chain Perspective”, Oxford Energy Forum: Economic Divercificaion in the Mena 118 (2019), pp. 36–40.

26 Ewers and Malecki, “Leapfrogging into the Knowledge Economy: Assessing the Economic Development Strategies of the Arab Gulf States”, Tijdschrift voor Economische en Sociale Geografie 101 (2010).

27 Ewers, “From Knowledge Transfer to Learning: The Acquisition and Assimilation of Human Capital in the United Arab Emirates and the Other Gulf States”, Geoforum 46 (2013).

28 Ewers, “International Knowledge Mobility and Urban Development in Rapidly Globalizing Areas: Building Global Hubs for Talent in Dubai and Abu Dhabi”, Urban Geography 38 (2017).

29 For a detailed account of the Kafala system and its variations among the Gulf countries see, Baldwin-Edwards, “Labour Immigration and Labour Markets in the GCC Countries: National Patterns and Trends”; Longva, Walls Built on Sand: Migration, Exclusion and Society in Kuwait (1997); Zahra, “The Legal Framework of the Sponsorship Systems of the Gulf Cooperation Council Countries: A Comparative Examination”, Gulf Labour Markets and Migration (2015).

30 Borjas, Heavens’s Door: Immigration Policy and the American Economy, p. 19.

31 Kherfi, “Unemployment and Labor Market Participation of UAE Youth”, paper presented the conference of the Social-Economic Situation of Middle East Youth on the Eve of the Arab Spring, Beirut, Lebanon (2012), p. 25, Table 1.

32 Govt of Dubai, Prime Minister’s Office, “Vision 2021 / National Agenda” (2017). For a general demographic overview of UAE see, De Bel-Air “Demography, Migration, and the Labour Market in the UAE”, Gulf Labour Markets and Migration (GLMM) (2015); De Bel-Air, “Demography, Migration, and the Labour Market in the UAE”, Gulf Labour Markets and Migration (GLMM) (2018); Govt of Dubai, Federal Competitiveness and Statistics Authority, “Statistical Atlas” (2017).

33 Kherfi, “Unemployment and Labor Market Participation of UAE Youth”, p. 22ff.

34 Ibid.; Govt of Dubai, Prime Minister’s Office, “Vision 2021 / National Agenda” (2017).

35 Hvidt, “The State and the Knowledge Economy in the Gulf”, p. 42.

36 Cammett et al., A Political Economy of the Middle East (2015), p. 338.

37 Zahra, “The Legal Framework of the Sponsorship Systems of the Gulf Cooperation council countries”, p. 5ff.

38 Ahmad, “UAE’s New Labour Laws Hailed by Diplomats, but Say More Can Be Done”, The National, 7 February 2016; Govt of Dubai, Ministry of Human Resources and Emiratisation, “UAE Labour Law” (2016); Baldwin, “New UAE Labour Rules Kick in on January 1, 2016”, Gulf News, 28 September 2015.

39 UAE Labor Law, “The Kafala System and UAE Labor Law” (2017).

40 Gulf News, “UAE’s 10-years Visa Decision Will Further Boost the Economy”, 21 May 2018.

41 Gulf News, “Sheikh Mohammed Bin Rashid Launches Permanent Residency System in the UAE, Benefits 6,800 Investors in the First Batch”, 21 May 2019.

42 Zaatari, “Indian businessman Yousuf Ali Get First Gold Card in UAE”, Gulf News, 3 June 2019.

43 Macbeth, “End of 51 Per Cent Emirati Ownership Rule ‘Will Greatly Spur Foreign Investment’”, The National, 22 May 2018.

44 Baker, “What Lies Beneath: Bahrain’s ‘New Citizens’ Fuel Unrest”, Time Magazine, 11 February 2011; Finn, “Qatar’s Recruited Athletes Stir Debate on Citizenship”, Reuters, 25 August 2016.

45 See the scholarly debate within migration studies that deals with the “membership” issues e.g. Soysal, Limitis of Citizenship: Migrants and Postnational Membership in Europe (1994); Walzer, “Membership”, The Immigration Reader: America in a Multidisciplinary Perspective, ed. Jacobson (1998).

46 Naufal, “The Economics of Migration in the Gulf Cooperation Council Countries”, p. 1633.

47 Solimano, International Migration in the Age of Crisis and Globalization, p. 157ff. For a contrasting view, see Babar, Ewers, and Khattab, “Im/mobile Highly Skilled Migrants in Qatar”, Journal of Ethnic and Migration Studies 45.9 (2019), pp. 1533–70.

48 Austin et al., “Expatriate Academic Staff in the United Arab Emirates: The Nature of Their Work Experiences in Higher Education Institutions”, Higher Education 68 (2014), p. 544.

49 Chapman et al., “Academic Staff in the UAE: Unsettled Journey”, Higher Education Policy 27 (2014).

50 Ibid.

51 Hvidt, “The State and the Knowledge Economy in the Gulf”; Soto, “Education in Dubai from Quantity to Quality”, working paper 05-12 (2012).

52 Ewers, “From Knowledge Transfer to Learning”, p. 132.

53 Govt of Dubai, Roads and Transport Authority, “Al Tayer Opens Serco-Rail Agency Knowledge Transfer Program” (2011).

54 World Nuclear Association, “Nuclear Power in the United Arab Emirates” (2017); Forstenlechner and Rutledge, “Unemployment in the Gulf: Time to Update the ‘Social Contract’”, Middle East Policy 17.2 (2010), p. 47.

55 Ewers, “From Knowledge Transfer to Learning”, p. 131.

56 Papademetriou and Sumption, The Role of Immigration in Fostering Competitiveness in the United States, p. 4.

57 Govt of Dubai, Prime Minister’s Office, “Vision 2021 / National Agenda” (2017).

58 Hvidt, “The State and the Knowledge Economy in the Gulf”, p. 43.

59 Ewers, “From Knowledge Transfer to Learning”, p. 132.