UAE Economy Could Be In Big Trouble
Expats are leaving Dubai due to a lack of benefits and no formal route to citizenship.
Dubai's entire economic model was formed on the presence of foreign residents. "Oxford Economics estimates the United Arab Emirates, of which Dubai is a part, could lose 900,000 jobs -- eye-watering for a country of 9.6 million -- and see 10% of its residents uproot". Many of those leaving are very wealthy sparking fears over the future of the economy. "Sectors that relied on those professionals and their families such as restaurants, luxury goods, schools and clinics will all suffer as people leave".
For many the decision to leave is very difficult as several other countries have their own employment crises. "The international Labor Organization says more than 1 billion workers globally are at high risk of pay cuts or job losses because of the coronavirus". Many politicians in the area are not concerned about people leaving as it will help them to provide jobs for locals.
"The crisis will likely accelerate the UAE's efforts to allow residents to remain permanently, balanced against the status of citizens accustomed to receiving extensive benefits since the discovery of oil. For now, the UAE is granting automatic extensions to people with expiring residence permits and has suspended work-permit fees and some fines." A spokesperson for the Dubai government said they will do everything they can to be able to welcome back those who have recently left.
The cost of living in Dubai has increased rapidly over the last decade. "In 2013, Dubai ranked as the 90th most expensive place for expatriates, according to New York-based consultant Mercer. It's now 23rd, making it the priciest city in the Middle East, though it slipped from 21st place in 2019 as rents declined due to oversupply." This high cost of living includes education and schooling prices which has been a deciding factor to leave for many.
"The economy never returned to the frenetic pace it enjoyed before the 2008 global credit crunch prompted the last bout of expatriate departures. Then, just as it turned a corner, the 2014 plunge in oil prices set growth back again." While the UAE has not seen a second wave of COVID-19, its reliance on movement of people and goods has left the economy very weak since the onset of the Coronavirus. "Emirates Group, the world's largest long-haul carrier, is laying off employees as it weighs slashing some 30,000 jobs".