Sheikh Khalifa bin Zayed al-Nayhan told London-based Asharq Al-Awsat he was aware of "the seriousness of the imbalance" in the oil-rich Gulf state where foreigners make up some 80 percent of the four-million population.
The solution was a "progressive" nationalisation of the workforce with local, qualified workers taking over from non-Emiratis, he said.
The president called for the economy to be restructured in a way that would cut down on "the mass of unqualified foreign workers who account for the biggest factor in the demographic imbalance".
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Foreign labourers, mostly from the Indian sub-continent, have been powering the UAE's construction boom but their working conditions have been a regular target of criticism by rights groups.
Sheikh Khalifa, however, said they "can not be classified as immigrant workers as they work here on a provisional basis under fixed term contracts.
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"As a result, the standing laws on immigration in Western countries can not apply fully to these workers