Expats feel the pinch of weak currencies and soaring prices - Emirates24|7

Expats feel the pinch of weak currencies and soaring prices

(AFP)  

 

 

Foreign workers making up the bulk of the labour force in the Gulf economies are feeling the crunch of rocketing prices and weak currencies. Some are even questioning the point of staying.


“A segment of workers is considering leaving, particularly those from countries that are seeing strong economic growth,” said Yasser Hatami, managing director of regional recruitment agency GulfTalent, referring to Indian professionals who are getting better deals at home.

The six Gulf Co-operation Council (GCC) states have traditionally been a major destination for migrant workers from neighbouring South Asian and Arab countries, while Westerners are also attracted by tax breaks and the lifestyle.

But despite impressive economic growth fed by an oil windfall, expatriates in GCC nations face surging inflation, while the value of their remittances has dropped as most GCC currencies are pegged to the tumbling dollar.

“It is becoming much harder to persuade professionals – bankers and engineers, for example – in India to leave,” Hatami said, adding that GCC-based firms now look for fresh graduates who are more willing to come.

Laveen Melwani is an Indian banker who moved to Dubai straight after graduating over four years ago. Despite salary increases, he now has second thoughts about being in the region’s business hub.
 
“The higher value of money that is not taxable and career opportunity [brought me to Dubai]. Now, I am constantly thinking about the point of being here,” said the 27-year-old customer relations manager.

“The economy is growing in India, offering higher pay and maybe better opportunities,” he said, lamenting that his remittances have depreciated by 17 per cent over a year due to the Indian rupee surging against the dollar.

In Qatar and the UAE, both of which registered double-digit inflation in 2007, the cost of housing alone amounted to 35 per cent and 31 per cent of household income, respectively, according to a study by Dubai-based GulfTalent.

“Many people I know had to send their families back home because they cannot afford the higher cost of living, especially housing,” said Adel Ayoub, an Egyptian labourer in Qatar.

However, many foreign workers appear to be staying in the Gulf simply because the situation back home is not any better.

“I found out that the increase in the cost of living in Saudi Arabia is still lower than in Jordan and other Arab countries,” said Jordanian Ali Abu Hashem, who has lived in Kuwait for several years.

“I do not save as before, but at least in the past years I managed to save enough to buy a house back home… If I go back I would not find a good job,” he said.

The traditionally stagnant inflation in world’s biggest oil exporter Saudi Arabia increased to more than four per cent last year, and climbed to 8.7 per cent in February.

The private sector is, meanwhile, compelled to increase salaries to keep foreign professionals content, according to Hatami.

Asian professionals, who are usually paid less than others, enjoyed the highest salary increases in 2007, followed by their Arab counterparts, he said.


For some professionals, the GCC has also become a good place for work experience, Hatami said.

“It used to be a good place to save, but it could potentially dent your career, coming from the West… Now, it looks good on your resume,” he said, underscoring Dubai’s appeal to professionals despite being financially the less attractive due to the high cost of living. (AFP)

 
The number

About 35 per cent  of the household income is spent on housing costs in Qatar, according to a study by Dubai-based GulfTalent. In the UAE, the figure is 31 per cent
 
 
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