by Ali Khalil

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DUBAI, Sept 6, 2007 (AFP) - The departure of tens of thousands of illegal foreign workers from the United Arab Emirates under an amnesty has created a labour shortage in the country's booming construction sector.

"It is creating an impact on construction sites... About 300,000 workers have evaporated from the market," said Mike Cairney, director of EC Harris construction consultancy firm in Dubai.

"A lot of workers who have taken advantage of the amnesty have been working in construction," he told AFP, and said that complaints about a lack of workers have already been heard on building sites.

The UAE said this week that nearly 279,000 illegal labourers had taken advantage of a three-month amnesty to either formalise their status or leave the country.

Some 185,000 of those were based in Dubai, which is currently undergoing a construction frenzy.

Illegal workers seeking to quit the oil-rich Gulf country have now been given a deadline of another two months to leave.

"There is definitely a pressure in the labour market due to an ongoing shortage of skilled labour... In the short term this is being compounded by the departure of illegal workers," said Sana Kapadia, equity analyst at EFG Hermes investment bank in Dubai.

The booming construction sector absorbs most of the hundreds of thousands of low-paid workers who come primarily from India, Pakistan and Bangladesh and who can earn as little as 200 dollars a month.

But as many began heading home, the local press reported a shortage of labour in various construction jobs including skilled plumbers, electricians and masons.

"At one time we had 500 employees on sites. Now we have only 80," the daily Emirates Today quoted one contractor as saying.

The shortage is now expected to trigger an increase in wages aimed at luring back workers who have had to leave.

"Wages in construction will have to increase for both skilled and unskilled labour," said Kapadia, adding that UAE firms now face the extra cost of training unqualified workers.

Cairney agreed that the shortage will lead to an increase in labour costs, in order to convince South Asian workers to return.

"They would not come back for the same money," he said. An Indian worker might now prefer to stay home where the construction sector is also booming, he added.

Meanwhile, workers who have decided to regularise their status in the UAE are now in a better position to demand more money and better working conditions when signing new contracts.

Workers are also becoming increasingly vocal in demanding that their poor working conditions improve, with some staging sit-ins and demonstrations even though public protests and unions are banned in the UAE.

On Monday hundreds of construction workers gathered near a building site in Dubai demanding better pay and protesting at not receiving annual air tickets to fly home, as they should under UAE labour law.

The mainly South Asian protesters had planned to march from their living compound to the labour ministry but were persuaded to cancel their protest after receiving assurances of better terms, the Gulf News daily reported.

Human rights organisations have slammed the UAE in the past over alleged abuse of blue-collar workers. The federation of seven emirates has since taken steps to crack down on such abuses.

The recent amnesty is seen as a step towards eliminating the exploitation of workers and improving their conditions, and the shortage of labour is expected to be temporary during the transition to better market regulation.

"It is a short-term adjustment, but it is for the benefit in the long term... It (aims) to look after people properly," Cairney said.

He added that most of the exploitation of illegal workers in construction had been by manpower agencies rather than by the contractors that employed them.

Kapadia said construction projects in Dubai which already face delays in delivery are bound to be further delayed because of the labour shortage and other capacity constraints.

Under UAE law expatriates working illegally can be jailed for 10 years and then deported. Those employing illegal workers face one month in prison and a fine of 50,000 dirhams (13,600 dollars).

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