Expat exodus from UAE threatens regional economic stability

Expat exodus from UAE threatens regional economic stability

Expat exodus from UAE threatens regional economic stability

If you’ve been planning your expat life around a job in the UAE, you may be too late.

According to reports on the region, the entire Middle East including the UAE is now heading full tilt towards an economic downturn even more devastating than those which followed the 2008 financial crisis and 2014/2015. The reason is the double whammy of the coronavirus pandemic and the dramatic fall in oil prices to an all-time low. At the same time, popular TV talk-shows in Saudi Arabia are warning privately-owned businesses they have a duty to sack expats rather than local labour in order to prevent expatriate domination over the Saudi workforce.

As the move towards total Saudisation by any means ramps up, expats are faced with a dilemma – should they stay or should they leave and take their talent and experience where they’d be more appreciated. The Saudi government’s moves are intended to protect their own people during an unprecedented event which took the entire world by surprise, but is this a good or bad thing? Pundits believe the expat exodus will be far larger than those following the financial crisis and the 2015/2015 oil price crash, both of which severely restricted the emirates’ economic growth.

The present issue is different in that a large number of expats are now trapped in the UAE without financial safety nets or reliable ways to get back home. The majority of those with no apparent way out are low-income blue collar workers from Asia, India and Pakistan whose risk of contracting the virus is high due to crowded living conditions. Expat professional lives are being put on hold for similar reasons, with many finding their new jobs are no longer viable or even available, and those who’re employed are being placed on unpaid leave for as long as six months. Many don’t have the financial backup to self-finance for that length of time and are joining the queues waiting for repatriation flights to the home country.

All the above will result in even more economic woes for the UAE, with deflation and secondary job losses on the cards. Scholars are reminding host countries that expats aren’t just a cog in the machine of commerce as they recycle capital in a manner which supports and sustains the economies of the Gulf States as a whole. VAT, taxes, fees and actual spending were important sources of government incomes prior to the pandemic outbreak, and will be sadly missed should the region turn its back on its expat presence.

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