Labor woes in the Middle East, Part II
The global credit crisis is ripping through economies in the Middle East, forcing companies to announce hefty job cuts. Nowhere, not even the Gulf, has been spared.
December 15, 2008 6:20 by kippreport
In the Gulf, those who can expect the biggest jolt from the economic slowdown are expatriate white-collar staff. Their pay rates and fringe benefits are endangered both by companies wanting to shave costs, and from a new wave of economic migrants who are arriving in the Gulf looking for jobs like theirs. One example is construction project managers from countries such as Spain and Britain, who are escaping the property-building slump back home.
“These guys are coming in a lot cheaper,” says one English project manager who works for the Dubai-based developer Nakheel. “They weren’t given the same benefits, like car allowance or school fees paid. If the downturn goes on for another year or 18 months, then a lot of people ending their present contracts in Dubai may have to sign up again under the new terms. There’s plenty of supply, and the companies have got their hands in the sweet tin.”
Another example is investment bankers in the City of London and Wall Street, who face mass redundancies. Thousands of are sending their resumes to private equity firms and banks in the Gulf. “We’ve seen a six- to 10-fold increase in enquiries from job applicants – particularly from London,” says Peter Greaves of Dubai-based headhunters McArthur Murray. “And we haven’t yet seen the mass-culling which happened in the city in previous recessions. But either before or after Christmas, I expect that to happen, and then we’ll see a flood of enquiries.”
“These are highly-skilled people,” says Kitchen of EFG Hermes. “But there’s likely to be a surfeit of them, and that will depress salaries in the industry.”
It’s difficult to equate how any suffering expatriate fund manager in Dubai feels, compared with the plight of a Moroccan worker laid off from a factory in Spain and sent back to a jobless future. But for the Gulf’s white-collar expatriates, who have so far enjoyed tax-free pay with plenty of perquisites, the party is beginning to wind up, and there’s little to draw them back home.
First seen in Trends magazine.