Bloomberg agency explained that the departure of many foreign expatriates to the emirate of Dubai constitutes bad news for the economy in conjunction with the outbreak of the Corona virus and the procedures imposed by it, and the abolition of thousands of jobs due to the cessation of economic and commercial activity, noting that the impact of Corona is blatantly reflected in the emirate whose economic model is based on arrivals Who make up 90% of the population.
Bloomberg saw that the return of expatriates to their countries is an option facing millions of foreigners in the Gulf countries due to the implications of Corona and the drop in oil prices, which in turn imposes financial and economic adjustments. Like the emirate of Dubai, explaining that many foreign residents in the Gulf countries created families in it, but with no way to obtain the nationalities of the Gulf countries or permanent residency and no benefits or benefits in difficult times or crises, which constitutes a presence fraught with financial and social risks for thousands of expatriates in the region.
According to the agency, it took Sarah Sison (39 years) less than a month to end her presence in Dubai for 25 years to return to her motherland Australia last month with her husband and son; She had come to live in Dubai when she was a teenager with her father who worked as a pilot for Emirates Airlines.
Sison, who owned a small cafe in Dubai and worked as an independent human resources consultant, said: “Dubai is the home for me, but life is very expensive and I can no longer afford the financial costs there. There is not a lot of job security in the emirate, but my move to Australia will guarantee me to The least I have and my family have free health insurance and education for my children. ”
Loss of jobs
Oxford Economics estimates that the UAE may lose 900,000 jobs, which is burdensome for the country of 9.6 million people. The World Foundation expects the Gulf country to witness a 10% drop in its population after thousands of expatriates return to their homes.
Bloomberg referred to several press reports that talk about the departure of thousands of Indian, Pakistani and Afghan workers to their homes, but the departure of high-income employees may have painful economic effects for the country, because it is the main category for any potential economic growth, as it has a major share in consumption and purchasing power Alia, pointing out that, due to the global economic turmoil, the decision to leave is not clear to many foreigners in Dubai, knowing that the International Labor Organization expected that more than one billion workers worldwide are at great risk of reducing their wages or losing their jobs due to the Corona virus.
It quoted Ryan Paul, Middle East analyst at Stratfor, as saying: “The return of middle-class employees in the UAE to their country may frustrate economic activity, and sectors that depend on the expenses of these professionals and their families will suffer after they leave, such as restaurants, luxury goods, schools, and medical clinics.” He added: “ Without government support for these services, workers in them will also face the fate of those who preceded them to their home countries and create more waves of adverse migration. ”
Bloomberg mentioned that some Gulf officials, such as the Kuwaiti Prime Minister, encourage foreigners to leave in conjunction with their concern about providing new jobs for citizens, but Dubai's accounts (whose economy depends on its role as a global center for trade, tourism and business) are different.
The agency expected that the current economic crisis will accelerate the efforts of the UAE to allow expatriates in it to obtain permanent residency in conjunction with continuing to give citizens the great advantages that they used to obtain since the discovery of oil in the country.
Bloomberg said: “The UAE is currently granting automatic extensions to residents whose work permits have expired and has also suspended work permit fees and some fines, which encourages employment from unemployed people recently and pushes banks in the country to provide interest-free loans and extend installment payments periods for families and troubled companies.”
She added: “The main challenge for foreigners in Dubai is their ability to bear the high costs, as the emirate has become an increasingly expensive place for companies and residents alike.” And she added: “Dubai’s economy has never returned to the high rate it was enjoying before the global financial crisis in 2008 that prompted many foreigners to return to their homes, but the Dubai economy returned to growth again after the beginning of the drop in oil prices in 2014, but the emirate, which was counting on Expo 2020, which was expected to attract 25 million visitors, was postponed because of Corona » .
Bloomberg stressed that weak demand means that the economic recovery in the UAE will take some time, explaining that, unlike some countries in the region, the UAE does not witness the re-emergence of the Corona infection during the reopening of economic activity, but the country's dependence on external flows of investment and retail means that it is vulnerable to economic turmoil The world is more than others, and the agency quoted a shipping company in Dubai that it receives about 7 calls per day from residents wishing to send their items to their countries, compared to two or three calls per week in the same period last year.
UAE economy will shrink 3.6%
The Emirates Central Bank said yesterday (Wednesday) that the country's economy will likely shrink 3.6 percent this year after the slowdown in economic activity due to the Corona virus pandemic.
In the first quarter of this year, the UAE economy contracted by one percent on an annual basis, as non-oil GDP fell 3 percent, unlike the GDP of the oil and gas sector, which increased by 3.7 percent on an annual basis.
The central bank said in a report for the first quarter that while the decline in economic activity is expected to be followed by a sharp contraction in the following quarters of the year, it is expected that the contraction of growth other than the energy sector will be 4.1 percent in 2020.
He said that the total output of the oil and gas sector is expected to shrink 2.4 percent this year.
He continued that the recovery of economic activity is expected to start in the second half of the year, but the recovery of economic sentiment will depend on the support measures, referring to stimulus programs from the central bank itself and the UAE and federal governments.
The central bank expects employment activity to decrease in the second and third quarters, and then recover in the fourth quarter of the year. (Reuters)
SOURCE : ALQABAS