Will the city of Gold glitter again?
Dubai has always been a hunting ground for skilled and semi-skilled professionals from Indian sub-continent, South East Asia, Africa, various Arab countries as well as Europe and America. However nobody expected to see or experience what they are going through for past one year, including myself!
The coffee table discussions have changed from “how much increment you expect this year?” to “How many laid off from your company?” In real sense Dubai has started bleeding from the recession blows; however there are still arguments whether Dubai is yet to hit by recession.
A brief outlook on recent incidents:
1. More than 100,000 expats from India, Sri Lanka and Bangladesh have left UAE in past 3 months; similar figures can be expected for other nationalities too.
2. There are no or meager increments, people are getting for their efforts put last
year.
3. The tourist visit was almost less by 30% this year compared to last year during
Dubai Shopping Festival.
4. Thousands of Transfer applications are lying with Embassy and schools for those who want to send their families or kids back to home country after end of their school exams.
5. The banks, financial institutions and realty developers have reduced their work force in the range of 20-30% from across the verticals.
6. More than half of development projects have been put on hold, postponed or
cancelled due to lack of funds.
7. The banks are either not issuing any loans and credit cards or following very strict criteria for issuing them.
8. Property rates have gone down by as low as 40% including the rentals market. (Palm Jumeirah Island prices gone down by 50 %!)
9. The money flow in the market is less.
10. The shopping malls and markets are nearly empty.
11. Hotels are running on approx 60-70% occupancy as against 80-90% till last year.
12. Instead of focusing on increasing the revenues and profitability of the company, everyone is stressing more on finding ways of cost cutting and reducing the expenses.
13. Luxury cars, monstrous 4Wheels, and super bikes, which were considered ultimate symbol of being WEALTHY, are now left abandoned in parking lots. As per a recent news, more than 3000 cars were found in parking areas of Dubai International Airport with keys and apology note left for banks and police informing their inability to pay back the car loans and loss of job etc.
14. Approximately 1500 Visas getting canceled everyday for past couple of months.
15. Luxury spending reduced by 25% amongst UAE expatriates.
16. The friendly “Khan Bhai” taxi drivers are earning 50-60% fares against what they used to earn till last year.
Are people still skeptical and wondering if Dubai is yet to face recession?
My company adopted a new strategy of cost cutting, shifting the regional office from UAE to Lebanon without firing anyone. So the new option came up is “accept 25% salary and shift to Lebanon or else QUIT”. Interesting proposition! I like to challenge myself with new projects, but there is always a difference between CALCULATED RISK and IDIOTIC RISK. My entry in Dubai was a calculated risk, and rest is history!
At a time after completing more than a year’s service with my organization and expecting an INCREMENT, 25% deduction surely came as a blow below the belt!. Be it Recession or Appreciation, hundreds of economists as well as theories have always advocated a controlled economic growth, which results in creating evenly balanced crests and troughs on a trend graph!. But when upward curve goes very steep and
disproportionately faster than time, a quick downfall is also inevitable and dangerously at alarming rate; which is bound to leave common man bleeding. (PS: no one is common in Dubai; everyone is unique in their own way)
Dubai converted a common man into a filthy rich family owning a flat in Dubai and a house in homeland within no time. The money was not there, capacity was not there but ownership of flat was surely there along with a PRADO or Mercedes parked outside? Courtesy; the generosity of our banks and financial institutions and their eagle like desire to make every human being in Dubai a millionaire through issuing more and more personal loans, car loans, credit cards etc.
This virtual money which created WEALTH amongst the expatriates has unfortunately became one of the biggest the reasons for the downfall of this gold city.When something which never existed is believed upon, the reality is bound to come out entirely different!
Recently the government had pumped in approx AED 31.1 Dirham to rekindle and provide some support to the falling economy, but the pit created is too deep to be filled up so soon and so easily. One thing the Government surely must have understood from this recent economic massacre is that, giving impetus to tax benefits and infrastructural support to attract investments is surely a successful strategy to develop an economy at a faster pace. But needs to keep enough checks and balances to make sure that; wealth of the country, as well as income of expatriates doesn’t get affected and any economic slump should not result in turning WEALTHY EXPATRIATES into Homeless Refugees.
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