Reverse Osmosis - remember that thing in biology where the particles who had traveled through osmosis to one side of a membrane would start traveling the other side - seems to be setting in for UAE and the rest of the Gulf states. MenaFN reported the rising of India as the 'Third Largest Economy' according to the World Bank. Talking about the projects initiate by WB and the government the WB spokesperson said,
"Over the past five years, these projects have supported more than half a million self-help groups and 910 federations, covering eight million households in over 29,000 villages. The coverage works out to 90 percent of all poor rural households in the state, Wheeler said and added that he was truly impressed with his first interaction with self-help groups." Which means a lot of opportunities are being created inside the country.
So lets see if UAE which is already pushing out intellectuals and the strong workforce with its rising inflation and expense cost is ready to handle a situation where they start to walk out by choice leaving the economic veins of Dubai dry.
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13 comments:
Hahahahaha Is this a joke or something?
Could someone tell me if it's April yet?
let's see who will walk away from the life of luxury, healthcare, sanitation etc....
which luxury which healthcare what are u talking about .. UAE or Dubai isnt ranked amongst the top places to live in anyway nor the top places to do business in also ..
will india is, so go there.
at least, here u can drink the water without thinking twice if ur guts will get wrenched. you get ur vaccinations without thinking twice if you'll catch ur own death.
Anonymous @ 20:09
As much as I agree with your post, your choice of words says a lot about you.
Great way to shoot yourself in the leg and destroying your credibility by using profanity.
anon @ 19:08
here u can drink the water without thinking twice if ur guts will get wrenched
Hmm so I guess you live in Dubai. Do you drink water from the tap? Am guessing not.
So did you get the runs while you were in India? When was that?
mr poo ur name says a lot about u
I think braindrains happen in places where the local talent tends to migrate out. No matter what happens in India or elsewhere, there is no reason for the local population to migrate out of the UAE. Even if people stop coming in from one country, say India, there will still be countless people with talent and skills from other countries ready to fill the void.
On the other hand, Dubai will loose its competitive edge if the cost of living and doing business continues to rise.
Finding another angle isn't that easy. Dubai has been working at the current angle--property dev., tourism, shopping--for several years now with measurable success. It's only in the past couple of years that cost of living have started getting out of hand. It's still a fixable problem. No need to throw out the baby with the bathwater.
True, some businesses will be more or less affected than others. Let's take a news org in Media City, for example. Perhaps they don't want to house their staff in labour/staff accommodation of the Al Quoz sort. What is their option? Pay staff an allowance, but the best 3 or 4 thousand dirham per month will get them is a room in a villa which they share (the bathroom, kitchen, etc.) with others. That same allowance in other places, say Atlanta Georgia (headquaters of CNN International), will get them a one or two-bedroom apartment.
Now the staff can swallow the bullet and put up in the villa for a while. But sooner or later they'll wonder what they're doing in Dubai. If they just have to be located in the region, then why not try Manama, Doha or someplace else that could meet their requirments.
This is just one example and just one of a company's expenses, but I think you can get my drift.
Assuming, of course, BD, that the company is paying.
As it happens, that may be true in respect of some multinational companies operating here, or some of the really top-notch local ones. Even so, it may not apply to staff at all levels of the heirarchy.
Top management (not all companies): most likely.
Labourers: already provided (the conditions of which are well known).
Well, that leaves the rest.
Meaning the other 80% (rough figure). All other non-multinationals and smaller local companies. Who do not provide accomodation. And the Dh 3000 - 4000 figure you mentioned actually represents the entire salary, not housing allowance, of middle level and clerical grade staff.
Some have made the prudent decision to send their families back and turn themselves into bachelors. Others continue to doggedly hang on, in the process mortgaging themselves to about three or four banks at least. As one personal loan pays for another (as well as the groceries), two credit cards come in to take over the first one, which then begins recovering momentum; meanwhile two others come in to take care of the second two. At some point the whole machine is going to grind to a halt.
Why? Consider this hypothetical scenario (much closer to reality than you may care to think):
Person: Accountant.
Salary: Dh 4000
Wife: Not working, or if somewhat qualified, drawing about Dh 2000 as a receptionist/secretary/clerk at some construction company or "educational institute" in the back streets of Karama.
Expenses:
Room: Single room in dilapdated villa in Satwa, long ago condemned for demolition, but kept going for greed. Shared kitchen. Husband, wife and 2 kids use the one room for living, eating, sleeping and whatever else. Cost: Dh 2500 to 3000.
Electricity: Dh 400 (one A/C).
Water: Dh 200.
Telephone (fixed line) and internet: Dh 150
Wasel cards (for 2 users): Dh 80
School fees (2 kids around 10 - 12 years): Dh 900.
Bus fees (2 kids): Dh 290.
Car payment: (if he has one): Dh 1200.
Petrol: Dh 300.
If no car, transportation to and from work for self, wife to work (if working) and weekly shopping: Dh 500 to 600.
Groceries: Dh 1200 (very basic).
Bank loan repayment: Dh 1250 (typical).
Credit card a) minimum payment: Dh 300
Credit card b) minimum payment: Dh 300
Credit card c) minimum payment: Dh 300
Credit card d) minimum payment: Dh 300.
Support for parents back home: Dh 250.
Entertainment: Dh 20 (public parks only).
Medical cards for family: Dh 0 (no funds available).
Family visa fees etc: We'll see when the time comes.
Now if you do the math, you'll see it doesn't add up. That's where the banks come in and that's why you see some of those figures up there (eating up a good half of the monthly salary). Whatever can be charged to the cards will be charged, including school fees, groceries and petrol, telephone and internet costs, etc.
Does this sound like somebody is bitching? Whining? No sir, just a cool, calm, dispassionate look at something happening all around us. They look normal, they smile at their colleagues, they tell nice jokes. It looks like their finances are all under control. Who notices that the floor they're standing on is actually a very thin sheet of ice? Under which is a very large hole, that will literally take many years to fill?
And we say that it will go on, because it must go on.
Except that a pragmatic few are asking: "How is it possible?"
(Note re: the comment above comparing accomodation costs between Dubai and Atlanta, GA. This will not be relevant unless clerical level slaries in the two cities are also compared.)
So is the Dubai formula still workable?
Groceries for Dh 1200 = Dh 40 per day.
In this scenario, it's 2 adults + 2 kids to be fed.
Dh 10 per person, including everything, seems a bit too much to you, I accept.
Let's see: Breakfast @ Dh 2.00--would that be OTT? Perhaps.
Lunch at Dh 3 per person? OTT as well, I guess.
Dinner at Dh 3. Same.
School snack (break time): Dh 0.50 might be too much.
Glass of milk? No way. We're up to Dh 8.50 already. A single banana might tip the balance, and we may not be able to afford that pack of Glucose biscuits. Don't forget "groceries" includes cooking gas.
It's obvious we're getting a bit too extravagant here.
So let's cut that to half: Dh. 600 for a family of four (Dh 5 per day) and re-do the math.
This analysis, flawed as it is, considers income level rises as observed over a typical cross section of long term Dubai residents...not spectacular individual examples.
(If they all kept their eyes on the ball, typical clerical grade staff with over 10 years service should be drawing about Dh. 20,000 apiece--pity they didn't...)
The point of all this is to examine whether current conditions in Dubai are sustainable--or whether drastic change--somewhere--is called for.
"Get off your ass, get a second job, think of a better way to make money.. get out there!"
I bet you get a good kick out of going to Depression Groups and announcing to the teary-eyed participants that they should "suck it up and deal".
Second Job? Illegal. Getting caught means jail time and deportation.
Better way to make money? Hmm, good idea. Maybe I'll start a business. Ok, time to use all that capital I saved. Oh wait, all of it got WIPED OUT by rent/school fees/tea increases.
"If you are a clerk and have not been able to better youself in 5 years..." So there's no place in your merit based economy for clerks (who incidentally are often the oil of any good business)? Dubai doesn't believe in salary increases for menial positions, even if they are superclerk or whatever. But they're still valuable enough to the company that they won't let them go easily.
I guess only the strong survive, eh?
Entreprenuer: thanks for the views. Everyone's viewpoint counts, I guess.
I would just like to point out that the family I tried to describe is not a specific family, but a typical one. I believe there was a point being made in the original post, to which my comment was intended to serve as an adjunct...for a clearer understanding of yet another aspect that Dubai, in its momentous growth, needs to come to terms with.
When we speak of the need for change, we do not mean that the entire world should change while we ourselves do not; what we mean is that perhaps it is time for archaic laws relating to sponsorship, part-time work, freelancing, employment bans--indeed anything that suffocates a spirit of initiative and "entrepreneurship", to be reviewed, put under a microscope, and measured against what is being done in the rest of the world, especially the regions Dubai is trying to emulate.
I trust you are getting the point. To be frank, I really doubt it, especially when I see sentences like:
"When I say 'you' here, I don't refer to you personally...I'm just addressing those in the situations you describe."
Dear Mr Dubai Entrepreneur: you are addressing about 80% of the country's working population.
Perhaps you should take the "Dubai" out of your screen name and replace it with "Rotorua", "Timbuctoo" or something like that? (Just kidding.)
DE: we understand your point as well, but honestly (and this is my last reply on this subject) this_is_not_about_individuals.
It is not about complacency versus entrepreneurship. It is not about laziness versus intiative. We are speaking of a major social problem which would be attended to in any other country but not here because the affected parties are not nationals of the country. It is about greed (part of it), the stupidity of greed (a bright shining goose was killed) and the general, but sadly unforgivable, stupidity in running a country. Do we have to spell it out for you?
50,000 people in jail doesn't help the bank stay open (use the grey cells now). As Bush would say, it's the economy, wise one. A dozen major banks could shut down because of their far-sighted lending policies, and the ostrich in Dubai Zoo still says, "I don't see any problem; what problem are you talking about?"
Complacent individuals probably wont make it...that is true in any society, it is not something unique to Dubai. Ask Mr Lal, owner of Lal's, Bhs, and about a hundred stores in total. The man drives a different Rolls Royce for each day of the week (just kidding, but he could). He could tell you that, couldn't he. Or perhaps the late Manu Chhabria, who founded Jumbo, could tell you that. But is that what the point of this discussion is? Individual success stories? You still haven't got it, have you?
Let me put it this way:
The standard and quality of life enjoyed by the mid level salaried classes is what sets apart a developed country from a developing one...by this barometer, what would you say Dubai is?
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