The Liberalization of the UAE Labor Market: Towards a Progressive and Inclusive Economy

This paper examines the UAE’s labor market liberalization, highlighting its pivotal role in fostering a knowledge-based economy through enhanced labor mobility, global talent attraction, and alignment with innovation-driven policy frameworks central to the UAE’s economic diversification goals. Central to this transformation is dismantling the Kafala system and introducing the Golden Card Visa Program, which has enhanced labor mobility, attracted global talent, and aligned labor policies with international standards. These initiatives support Vision 2021 and UAE Centennial Plan 2071, aiming to foster a knowledge-based economy through education, vocational training, and entrepreneurial support. The study explores the economic diversification these reforms drive, strengthening human capital and providing a competitive edge in attracting skilled professionals. Despite challenges like private sector hesitance, skill mismatches, and regulatory adherence issues, especially for small and medium enterprises, the UAE’s labor market liberalization offers a pragmatic model for other Gulf economies. The paper synthesizes empirical observations and theoretical analysis to propose a framework for future policy enhancements, ensuring the UAE’s sustained leadership in labor market adaptability and economic innovation.