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Do Gulf expats secretly want their home countries to suffer?

Do Gulf expats secretly want their home countries to suffer?

Why would you wish for an economic downturn in your own country? Because you want better forex rates, of course.

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March 3, 2010 1:20 by



Kipp overheard a surprising comment the other day. “The British economy is in big trouble. And that’s great news,” said a man in a bar. “Can I buy you a drink?”

The fact that someone was rejoicing at the UK’s looming economic disaster was not particularly surprising. What was surprising, however, was that the person speaking was himself British.

The UK economy is extremely shaky. The ballooning budget deficit, political uncertainty, and the falling value of the pound have left analysts wondering whether the UK may ‘do a Greece’.

So it is even more shocking that someone would wish harm on the economy of their own country.

In the case of the man quoted above, the motivation was pure greed. The Brit, an expatriate living in the Gulf, is paid in a local dollar-pegged currency. The reason he was pleased about the UK’s economic woes is that the falling value of sterling means he gets more British pounds when he transfers money home.

Considering the pure mathematics, it is easy to see why he was pleased. A few years ago, you needed to earn 7.5 UAE dirhams to buy one British pound. Now, a mere AED5.5 will buy you GBP1. If our British expat was to transfer his entire salary back to the UK at the current rate, he has had, in effect, a 36 percent salary increase – all thanks to mere forex rates.

Given the sheer scale of remittances by Gulf expatriates, the issue of currency exchange rates is obviously an emotive one. Back in 2008, it even led to riots in the UAE: A group of Indian workers caused a disturbance over pay, in a situation exacerbated by the rupee’s rise against the dirham, which meant that they could send less money home.

But is it right to wish for a downturn in your own country’s economy, in the hope of better forex rates? After all, if the UK ‘did a Greece’, some Gulf expats may benefit. But if it ‘did an Argentina’, no one would.



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4 Comments

  1. Christopher Davidson on March 3, 2010 2:27 pm

    Another thought-provoking Kipp piece. It’s worth noting that while this British expat may enjoy a temporary filip from the increased value of his remittances, any economic problems in core economies such as the UK will sooner or later wash up on the shores of peripheral/dependent economies.

     
  2. Andrew on March 4, 2010 9:20 am

    No.

    I originally liked the UAE simply because there was so few Brits, and whilst the recession has forced many of the now sizeable British community to leave, the continued economic problems encourage even more to try their hand out here.

    Bah, humbug.

     
  3. Miss Anne Thropic on March 7, 2010 12:43 pm

    Dubai has become the new Hong Kong with the Failed In London, Try Hong Kong FILTH types now coming out here. And there are some failed Australians here too – FIST’D – Failed In Sydney, Try Dubai…

     
  4. Adam on March 9, 2010 6:27 am

    Very thought provoking and up to a point I am guilty of it. Do I wish the British economy harm ? Certainly not. Will I take advantage of the exchange rates if they are favourable ? Of course I will and in that sense I’m happy when they are. After all, one (but not the only) objectives of my time here was to save as much as possible to allow me to retire when I go home.

     

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