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Slowdown in Gulf economies leaves expats trapped by debt
| Published: | 1 Jun at 6 PM |
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The slowdown in the economies of the Gulf has resulted in layoffs, stalled construction projects and cut-backs in expat employees, some of whom are trapped as they owe money to banks.
The emirates and kingdoms making up the oil-rich Gulf region have seen revenues plunging since the dramatic downturn in oil prices began last summer. Gulf countries have no bankruptcy laws, leaving expats unexpectedly unemployed trapped inside the country until they can pay what’s owed. The majority of those affected are low-waged workers, but the massive staff cuts have also involved many expat professionals working in the oil industry.
Qatar was the first to be hard hit, especially as billions were being pumped into preparations for the 2022 FIFA World Cup. Both private and public companies were affected, with state-run Qatar Petroleum shedding over 1500 workers. Other Qatari companies announcing lay-offs included Maersk Oil with 12 per cent cuts, and Vodaphone’s Qatar subsidiary announced last month it was to slash its workforce by 10 per cent.
Expat workers stuck with late wage payments were forced to get loans, and banks summarily closed accounts when regular payments failed to arrive. Those owing money were prohibited by law from leaving the country until they’d paid up in full.
American Robert Foster, former senior operations manager for Hamad Medical Corp’s ambulance fleet.was on a three year contract and hoped to extend it to six years, thus saving enough money to buy a property back home. His first wage payment didn’t arrive for three full months, forcing him to borrow from a local bank to cover living expenses and other debts.
Subsequently, he and several colleagues were let go, with his bank closing his account and putting his savings towards his outstanding loan. He was unable to leave the country as his former employer would not provide the required exit permit. Forced to sell all his belongings, he hid his remaining cash in a freezer and finally had to give the bank his own and his father’s retirement savings before he could leave the country.
Tragically, a few expat employees who had no family overseas to bail them out are known to have committed suicide, including a British engineer who hanged himself at his home in Doha. A British coroner ruled two months ago that financial worries had played a part in his death, but the case cannot be closed as Qatari authorities have not given the coroners’ court the information necessary.
The emirates and kingdoms making up the oil-rich Gulf region have seen revenues plunging since the dramatic downturn in oil prices began last summer. Gulf countries have no bankruptcy laws, leaving expats unexpectedly unemployed trapped inside the country until they can pay what’s owed. The majority of those affected are low-waged workers, but the massive staff cuts have also involved many expat professionals working in the oil industry.
Qatar was the first to be hard hit, especially as billions were being pumped into preparations for the 2022 FIFA World Cup. Both private and public companies were affected, with state-run Qatar Petroleum shedding over 1500 workers. Other Qatari companies announcing lay-offs included Maersk Oil with 12 per cent cuts, and Vodaphone’s Qatar subsidiary announced last month it was to slash its workforce by 10 per cent.
Expat workers stuck with late wage payments were forced to get loans, and banks summarily closed accounts when regular payments failed to arrive. Those owing money were prohibited by law from leaving the country until they’d paid up in full.
American Robert Foster, former senior operations manager for Hamad Medical Corp’s ambulance fleet.was on a three year contract and hoped to extend it to six years, thus saving enough money to buy a property back home. His first wage payment didn’t arrive for three full months, forcing him to borrow from a local bank to cover living expenses and other debts.
Subsequently, he and several colleagues were let go, with his bank closing his account and putting his savings towards his outstanding loan. He was unable to leave the country as his former employer would not provide the required exit permit. Forced to sell all his belongings, he hid his remaining cash in a freezer and finally had to give the bank his own and his father’s retirement savings before he could leave the country.
Tragically, a few expat employees who had no family overseas to bail them out are known to have committed suicide, including a British engineer who hanged himself at his home in Doha. A British coroner ruled two months ago that financial worries had played a part in his death, but the case cannot be closed as Qatari authorities have not given the coroners’ court the information necessary.
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