The Gulf Pastures No More Greener

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“Sometimes I long to forget…It is painful to be conscious of two worlds.”

                                                                                                                     – Eva Hoffman,

Sumera B Reshi 


Since 2008 when the oil prices dropped and the world witnessed international banking crisis, the labor market in the UAE also felt the tremors.  The downturn had has ripple effects across the Gulf, hitting the job market and causing living costs to skyward. For many people who crossed salty waters and reached to the Gulf to cash in on its abundant resources, felt bogged down. Now the land of safaris and opportunities no longer entice them to stay. Home is where the heart is and heart is where your meta needs satisfy your basic needs. In present scenario, expats feel sandwich between home and the destination country.

For the expats, the country offered a tax-free salary, plenty job opportunities and fairly high standard of living, and however, with the introduction of Value Added Tax (VAT) laborers are worried. Besides VAT has brought volatility and uncertainty in the property sector and which according to a broker JJL Mena is expected to decline in 2018.

According to an in-depth market research done by arabianbusiness.com, regardless of the UAE standard of living and being the most liberal country in the Gulf, high wage rates, yet countless expats are leaving the UAE by choice or otherwise, amid increasing economic uncertainty. The reason for this sendoff is the steep rise in living costs, increased efforts to nationalize the workforce and persistent low oil prices.

Actually, the entire region is in plunge and panic. Expats are leaving because the stay in the UAE has become too expensive added by job insecurity. The situation is such that companies recruit employers who demand low. Gone are the days of big salaries, rather most of the companies are downsizing.

Further, as per the report compiled by the arabianbusiness.com, IMF had demoted the country’s growth forecast from 3.9 per cent in 2015 to 2.4 per cent in 2016. Although the growth rate of the UAE is still higher than other Gulf countries which heavily depend on oil. For instance, Saudi Arabia’s GDP growth was expected to be just 0.8 per cent in the year 2016. This knock –on the impact of the regional economic slowdown is taking its toll in the whole Gulf region and the UAE is no exception.

Most of the highly skilled expats who worked in oil and gas, banking or finance sector, the job market is now honky-tonk. Once the job is lost, it is very difficult to get a new one in a jiffy. Approximately, there are more than four million foreign laborers that work in around 260, 000 private institutions.

 

This large inflow of foreign workers can be attributed to the high economic growth sponsored by the increasing oil revenues since the early 70’s. The oil boom led to the excess demand for labor that can’t be met by domestic workers. Over the years this economic growth continues to rely largely on the non-oil sector on low-cost foreign workers who have low wages and these workers are from Asian countries which have an excess supply of labor.

Over the past few decades, the United Arab Emirates (UAE) has become the popular destination for temporary labor migrants seeking job opportunities and looking for higher standards of living. According to United Nations (UN) estimates in 2013, UAE had the fifth largest international migrant stock in the world with 7.8 migrants out of a total population of 9.2 million, with Emiratis making up just 11 percent of the total.

Mainly these migrant workers are from India, Bangladesh, Pakistan, Philippines, Sri Lanka and Nepal. These migrants comprise 90 per cent of the UAE’s private workforce. Due to its economic appeal, relative political stability and modern infrastructure, UAE attract both low and high-skilled migrant workers.

UAE is profoundly reliant on foreign labor to sustain its economic growth.  Laborers in the past were lured to the UAE due to high wages and high standard of living. In the early 70’s when oil markets were booming and petrodollars ruled the economic markets, the UAE government introduced a temporary guest worker program called the Kafala Sponsorship System, which allowed nationals, expatriates and companies to hire migrant workers.  Under the Kafala (sponsorship) system used in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (collectively, the Gulf Co-operation Council or GCC), migrant workers are tied to their employers. They may not switch jobs or, in some cases, leave the country without their employer’s permission. Many have their passports confiscated, though this is illegal.

Despite a staggering downfall in the job market, each day scores of people come to the UAE to try their luck. Favorite destination for numerous people – Persian Gulf has now lost its sheen. The times have changed. Companies are hiring people who demand less and work more. If not you then someone else will be hired on just peanuts. Thus, once a dream destination of the score of expats (skilled /unskilled), UAE no longer looks appealing, rather it has lost all the gleam. These laborers/expat works who left everything behind to try something better in the far-off Persian Gulf now feel completely disappointed. Unable to make both ends meet and soaring prices of commodities, expats are leaving their dream destination. Though there are no official figures published which give the exact statistics of the expat arrivals and departures, Fragomen, an immigration services firm indicated an overall increase in residency visa cancellations between 2015 and 2016. According to the firm’s figures, visa cancellations accounted for 31 per cent in July 2015 compared to 48 percent in July 2016.

The firm’s study signifies that the UAE market is dull and stale with an increase in people leaving some industries but the number of new arrivals generally holds up. Moreover, recruitment market growth stagnated at around 2 per cent in first half of 2016, however, it was expected to elevate to 2-3 per cent in 2017 if oil prices recover to their forecast $55 /barrel.

Termination in oil and gas sectors have already begun. The UAE’s oil workforce has diminished by around 50-60 per cent over the past two years but relative services have taken a stroke in the past year. Not only this but the UAE’s banking workforce has shrunk by around 10-15 per cent in 2016 and manufacturing and other oil and gas services have seen a workforce reduction of around 2 -3 per cent. Nonetheless, the food, farming, aeronautical and technology sectors are doing well according to Murphy ads, an advertising agency operating in the UAE.

 

Over the past few years, oil and gas, construction and related industries have been especially hit hard. Abu Dhabi’s state-owned National Oil Co (ADNOC) planned to slash 5,000 of its 55,000 staff by the end of the year 2016. In Qatar, state-run Qatar Petroleum dismissed 1,000 foreign workers this year as part of the restructuring, while pan-Arab TV news station Al Jazeera closed its American channel in April and terminated around 500 staff, most of them in Doha.

The job market in the UAE is shrinking and dwindling yet companies are hiring foreign workers and the trend is consistent.  A survey conducted by the Bayt.com, a recruitment website said that the 26 per cent of UAE responded to the Consumer Confidence Index survey and said that country’s economy had improved in 2016, with 48 per cent believed that it would continue to improve.

In addition, some market experts believe that Dubai Expo 2020 holds the key and is a major driving force that could boom the job market again. This much-talked event is expected to amplify developmental projects in UAE, thus help create more than 277,000 new jobs.

However, there are the people who don’t believe in ‘expat exoduses. One among them is the founder of a lobby group, Detained in Dubai, Radha Stirling. According to Stirling, her group hasn’t received any such information from expats wanting to leave the UAE. People won’t leave the UAE because back home the situations are even worst, she said. To some extent Sterling is right. The job prospects back home are not rosy either but the fight goes on and only those survive and endure win the race, simple Darwinian principle.

No doubt UAE offers a relatively sound and safe security for all the people residing there, however, job insecurity is the one barriers which has plagued people minds, especially expats. Today is gone but there is a strange uneasiness about tomorrow.

“I have very happy here. I have company accommodation and a good saving but who knows about tomorrow. They can fire me anytime and hire a new one,” said an expat working in a company in the UAE on the conditions of anonymity.

Sara Khan leaves home every day wearing a formal dress, unclipped hair and good make up which of course is a job requisite. She earns handsomely and is happy with her job in the UAE. However, she doesn’t know about the coming days. “Each day is a new day for me. At 3.30 pm, I feel satisfied because I am in and I am safe. But the nightmare of being sacked next day lurks close to me always like my shadow. I know back home, I have meagre job opportunities,” said Sara Khan with a strange fear in her eyes.

Despite all the uncertainties’, medical profession appears to be somewhat stable from the economic slowdown. According to Kaneez Nabijee, CEO of the recruitment and licensing body Doctors in Dubai, her client base has seen a surge by 50 per cent between 2014 and 2016. The reason for such a surge is that the government is heavily investing in the healthcare industry by building new hospitals and clinics. UAE offers an attractive salary and other perks to doctors from the UK, the US and India as well.

Moreover, more people from India want to set up businesses in the UAE. As per Kulwant Singh, president of the Indian Business and Professional Council (IBPC), UAE is an endpoint for many Indian businessmen and membership has risen by 10-20 per cent in 2016. “I know the economy is struggling but this is a global problem. If you run away from one country, you could find yourself in a worse situation somewhere else,” he said while talking to arabianbusiness.com.

Despite all the difficulties and volatile job market, expat laborers both skilled and skilled still visit the land of opportunities a la thirsty crow once upon a time flew to a garden to quench his thirst. Situations in the Gulf are different now, uncertainty in oil prices and Emiratization has made expats vulnerable to job insecurities. It has ruined their dreams and insisted them to return back where they belong to.

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