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Life gets tougher for expatriate professionals in Dubai
| Published: | 19 Nov at 6 PM |
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The recent and continuing expatriate exodus is hitting Dubai where it hurts – in the pocket.
Once top of the expat wish list for huge tax-free salaries, a glittering lifestyle and every possible amenity, Dubai isn’t what it used to be. The famed city in the desert is fading fast as the expatriate exodus expands, although its massive retail and commercial construction projects continue apace. No-one in charge is asking who’s going to buy the executive mansions or lease the acres of retail and office spaces as expats and their international employers pack up and move on to the next career-oriented dream destination.
The cost of doing business in the emirate is soaring, along with the cost of living, although third-quarter profits are heading in a decidedly downward direction. At an April meeting of 100 executives called by ruler Sheikh Mohammed bin Rashid, CEOs brought up issues related to the effect of high government fees on their businesses, with the strict visa rules also on the agenda. A flurry of decisions was the result, but most are still languishing somewhere in the emirate’s stifling bureaucracy. Another reason for Dubai’s present-day woes is that big-spenders hard hit by the 2014 oil price slump aren’t arriving in their droves and are being replaced by price-conscious Chinese and Indian tourists.
Behind the obvious reasons for the emirate’s waning popularity, there’s a hard truth in that it’s now fully involved via the UAE in the Middle East’s traditional, warring and often violent rivalries, thus denting its reputation for stability. First hit were UAE-based American businesses headquartered in Dubai and serving the entire region, with those exporting to Qatar being forced to pick sides in the still full-on, so-called ‘diplomatic blockade’. Closeness to Saudi Arabia with its controversial Crown Prince isn’t helping, with expat investors especially concerned at the UAE government’s request for information on transactions in the bank accounts of Saudi royals and business people held during MBS’s ‘crackdown on corruption’.
As always, the base line for expats is their salaries versus the cost of living for their luxury lifestyles. Some, including one South African expat bond trader, have or are planning to repatriate to their home countries, taking their wealth and spending power with them. Nowadays, the emirate is extremely expensive for expatriate professionals with families, especially when everything has to be paid for upfront. Massive layoffs by major retail and energy corporations have reduced the number of expat jobs available, and most firms aren’t about to accelerate their hiring strategies.
The retail and wholesale trade, responsible for 33 per cent of Dubai’s GDP, is now flat-lining, with the government reluctant to fill the gap by increasing its spend. The only bright spark on the horizon seems to be the 2020 World Expo Fair, now almost an end in itself but, given the overall and projected state of the first world economy, who know whether the miracle will actually occur?
Once top of the expat wish list for huge tax-free salaries, a glittering lifestyle and every possible amenity, Dubai isn’t what it used to be. The famed city in the desert is fading fast as the expatriate exodus expands, although its massive retail and commercial construction projects continue apace. No-one in charge is asking who’s going to buy the executive mansions or lease the acres of retail and office spaces as expats and their international employers pack up and move on to the next career-oriented dream destination.
The cost of doing business in the emirate is soaring, along with the cost of living, although third-quarter profits are heading in a decidedly downward direction. At an April meeting of 100 executives called by ruler Sheikh Mohammed bin Rashid, CEOs brought up issues related to the effect of high government fees on their businesses, with the strict visa rules also on the agenda. A flurry of decisions was the result, but most are still languishing somewhere in the emirate’s stifling bureaucracy. Another reason for Dubai’s present-day woes is that big-spenders hard hit by the 2014 oil price slump aren’t arriving in their droves and are being replaced by price-conscious Chinese and Indian tourists.
Behind the obvious reasons for the emirate’s waning popularity, there’s a hard truth in that it’s now fully involved via the UAE in the Middle East’s traditional, warring and often violent rivalries, thus denting its reputation for stability. First hit were UAE-based American businesses headquartered in Dubai and serving the entire region, with those exporting to Qatar being forced to pick sides in the still full-on, so-called ‘diplomatic blockade’. Closeness to Saudi Arabia with its controversial Crown Prince isn’t helping, with expat investors especially concerned at the UAE government’s request for information on transactions in the bank accounts of Saudi royals and business people held during MBS’s ‘crackdown on corruption’.
As always, the base line for expats is their salaries versus the cost of living for their luxury lifestyles. Some, including one South African expat bond trader, have or are planning to repatriate to their home countries, taking their wealth and spending power with them. Nowadays, the emirate is extremely expensive for expatriate professionals with families, especially when everything has to be paid for upfront. Massive layoffs by major retail and energy corporations have reduced the number of expat jobs available, and most firms aren’t about to accelerate their hiring strategies.
The retail and wholesale trade, responsible for 33 per cent of Dubai’s GDP, is now flat-lining, with the government reluctant to fill the gap by increasing its spend. The only bright spark on the horizon seems to be the 2020 World Expo Fair, now almost an end in itself but, given the overall and projected state of the first world economy, who know whether the miracle will actually occur?
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