Could citizenship for foreigners and talented investors be a game-changer for the GCC?
DUBAI: Foreign migrant workers make up nearly 90% of the population of the seven emirates of the UAE, making it one of the most ethnically and culturally diverse countries in the world. But expats have never had the opportunity to apply for citizenship or have shown them a path to citizenship.
Now, legal reforms adopted by UAE leaders that reverse this long-standing practice are being hailed as a potentially transformative development for the country’s future.
Given the similarities in the policy-making processes of the Arab Gulf countries, some experts question whether the UAE’s decision could become an indicator for other GCC countries trying to diversify their economies and struggling with challenges. identical demographic. In a tweet, Kuwaiti investor and advisor Ali Al-Salim called the offer of Emirati citizenship a “game changer for the Gulf.”
All eyes will certainly be on how the UAE manages the risks and benefits of the new approach. In any case, it is expected that only a select group of foreigners living in the country will be eligible for Emirati citizenship. Lawmakers believe that granting citizenship to investors as well as talented and innovative people will benefit the economy at large and give expats a real stake in the country’s future.
“We have passed amendments to the law that allow UAE citizenship to be granted to investors, skilled talent and professionals, including scientists, doctors, engineers, artists, authors and their families.” Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum said in a Jan.30 tweet. “The new guidelines aim to attract talent that contributes to our development journey.”
For decades, foreign migrant workers have been the mainstay of the UAE economy, in everything from the service sector to core occupations. The vast majority are workers from South and Southeast Asia, who send their wages home in the form of remittances.
However, the residency of this segment of the population has remained largely dependent on their employment visas. Even children born to foreign parents in the UAE are not entitled to Emirati citizenship.
Under the new law, the cabinet, executive councils and local courts will begin to nominate those eligible for citizenship according to strictly defined criteria. According to a statement released by the state-run Emirates news agency, investors, doctors, scientists and people in the creative industries will be among the first to be considered.
“The UAE is on the way to becoming a multi-ethnic, multi-religious and multi-cultural country and it is certainly taking all the necessary steps to achieve this,” Nasser Saidi, Lebanese politician and economist who was previously Minister of Economy and Industry, said said Arab News.
“The new citizenship law goes in the same direction. Previously you were just a visitor here in one form or another. You were employed, you invested, but you did not have a long-term stake in the country. UAE citizenship for foreigners means that you now have a long term interest in the country. “
Then there is the impending demographic challenge of the Gulf region. A study funded by the Bill and Melinda Gates Foundation of the Department of Health Measurement Sciences at the University of Washington in Seattle last year predicted that by 2050, 151 countries will not produce enough babies to support their population.
Declining fertility is already a problem in the Gulf States. In 2017, the global fertility rate was 2.37, but in the six GCC states it was on average only 1.84. Qatar, Bahrain and Oman were on the verge of failing to maintain their populations, but they were already steadily declining in Saudi Arabia, Kuwait and the United Arab Emirates.
By 2100, the situation in those countries is expected to be even worse, with fertility rates falling to between 1.32 and 1.39 children in Saudi Arabia and between 1.23 and 1.27 in the UAE.
For GCC states, there is an additional problem: they seek to diversify their economies and, at the same time, replace foreign workers in key roles with their own citizens.
It is impossible to go back in time and reverse the progress made on gender equality in the workplace and in society in general. Likewise, any attempt to persuade women to have more children against their will is not a viable solution.
For high-income countries with shrinking local populations, researchers at the University of Washington saw only one way out: “The optimal strategy for economic growth, fiscal stability, and geopolitical security is immigration. liberal with effective assimilation in these societies. “
For now, however, only certain foreigners and professionals can aspire to obtain a UAE passport. Investors seeking citizenship must own property in the UAE, have obtained one or more patents approved by the UAE Ministry of Economics or other reputable international body, in addition to a letter of recommendation from the ministry, the statement said. .
Doctors should specialize in a scientific discipline that is unique or in high demand in the UAE, while scientists should be active researchers in a university, research center or the private sector with at least 10 years of practical experience in the field. same domain. .
Intellectuals and artists, on the other hand, should be considered pioneers in their field and have ideally won one or more international awards. Letters of recommendation from relevant government entities are also required.
A particularly attractive aspect of the policy is that it allows new UAE passport applicants to retain their existing citizenship as well.
“You can keep the citizenship of your own home country, which is very important to many people,” Saidi said. “There is a big advantage from this point of view. Economically, what this means is that it allows you to be a leader in the country. It will attract and maintain human capital. “
Prior to the announcement of the citizenship law change, the UAE unveiled a series of measures to shake up its foreign property laws to make the country more investor-friendly by removing the need for business to have Emirati shareholders.
In 2019, the UAE announced plans to grant extended visas to wealthy real estate investors, entrepreneurs, and ‘specialist talents and researchers’. At the end of 2020, the government expanded the “golden” visa program and started offering five-year retirement visas to people above a certain income level. Subsequently, it introduced a remote worker visa allowing one-year stays for people with a job abroad provided they meet a minimum wage requirement.
“The first benefit is that you create a much more diverse, multi-skilled workforce by reaching new people of other nationalities,” Saidi said, referring to the UAE’s liberalized residency rules.
“Second, the idea is to move away from the UAE’s past economic model, which is a ‘build it and they will come’ type model, to a model based more on knowledge and the development of industries. technology-driven. Fourth, you retain talent, and fifth, you increase foreign direct investment in the country. “
Experts see many of the changes to the UAE’s visa policies as a response to sluggish economic growth, low oil prices and financial shocks caused by the COVID-19 pandemic.
“Since 2015 you have seen ups and downs in oil prices, which means that continuing with the model where you are not diversified is becoming an increasingly risky proposition, especially in times of climate change where countries around the world are striving to reduce their carbon footprint, ”Saidi said.
“The oil market has shrunk over time as countries move towards greater energy efficiency and renewable energy. When you think about reducing the risk of your fossil fuel assets, you are doing what Saudi Arabia did with Aramco. Everyone wants to reduce risk now, which means more diversification and moving away from energy intensive activities. And that has happened over the past three to four years.
In order to diversify, UAE lawmakers hope that attracting skilled workers and big investors will insulate its economy from future oil shocks and prepare it for a carbon neutral world. The hope is that, in the process, the UAE will also evolve into an active and multi-ethnic society.
“From a business perspective, there is nothing that will encourage people to be freer with their money in our country than the idea that they have a safe and sustainable home here,” Mishal Kanoo, male UAE affairs and Kanoo group vice president, Arab News said.
“The idea is to encourage the best and brightest in their fields from all over the world to come and live here and contribute to the economy, which will lead to changes not only in the economy, but also in new ideas. for growth and development. “
Emirati public intellectuals believe change will not happen overnight and that there will be some concern in a young country of only a million full citizens.
“A law has been announced, but between when it is announced and when it is implemented, a lot will need to be checked and rechecked,” Kanoo said.
“Any change creates a fear factor. The best way to overcome any fear is to dive in and see what it looks like.