Dubai economy to be hit hard by expat repatriation

Dubai’s expat exodus will bring bad news for the emirate’s economy.

It seems the worldwide coronavirus pandemic and its curtailment of human rights are focusing expats’ minds on what’s really important for their physical and mental health. It’s a similar story across almost all favourite expat career hubs, with compulsory isolation and downtime to consider priorities leading to large numbers of long-stay expat professionals considering either relocation or repatriation.

Even the luxury hub of Dubai is seeing many of its expat population heading for the nearest exit. Those to whom a well-paid career in an exotic location was the ultimate dream are taking off their rose-coloured glasses and seeing reality as it is – unsafe and very expensive. Home countries equipped with top quality healthcare, medical insurance at reasonable rates and free schooling for the family are proving tempting enough to leave the glittering city and head back to the ultimate comfort zone. Literally millions of expats in the Gulf States are facing this dilemma and many have already left, with even more booking flights leaving in the near future.

The ultra-wealthy Arab monarchies have traditionally depended on foreign labour to build their sleepy villages into giant cosmopolitan cities, with many of the original workers never leaving and now with children and grandchildren stuck in a time warp. There’s no route to becoming a permanent resident or acquiring citizenship, and no benefits are paid during times of hardship. For example, Dubai’s demographics clearly state 90 per cent of the population are incomers, with doomsayers expected job losses of around 900,000. Worse still, Dubai’s famous and much-envied expat professional way of life is now struggling to survive the twin shocks of the pandemic and the crash in oil prices.

The emirate is in a perpetual growth situation and the loss of high-earning and high-spending expats as well as huge numbers of workers doing jobs Emiratis wouldn’t touch is projected to cause a great deal of pain. Private clinics, international schools, luxury goods stores, high-end restaurants and other similar services will all experience hard knocks to their profit margins once the expat professional community shrinks. It’s not as if the route taken by Kuwait as regards getting rid of expats would work in Dubai, as the city is a global hub for business, trade and tourism.

The city built its international reputation as a mostly unregulated tax haven, but its present-day lack of affordability is its biggest enemy as regards growth. Although the choice of expat-aimed international and private schools is expanding, so have the costs charged to parents, with many now seeking cheaper options or returning to Western countries where decent, free education is considered a human right.

Dubai’s previous expat exodus occurred as a result of the 2008 financial crash, with many leaving vowing never to return. Its economy straightened out to a degree by 2014, only to have to cope with that year’s oil price crash. Now the pandemic has put paid to Expo 2020, with no announcement as yet having been made as to when the massive exhibition will run. Meanwhile, cargo and packing companies are enjoying a boom in business as more and more expats decide enough’s enough and head home.