With increase in redundancies in Dubai, which is struggling to contain a property market slowdown, the foreign workers in Dubai would be welcomed by its neighbouring emirate Abu Dhabi, say leading analysts in the region.
Abu Dhabi will lure White collar foreign workers from its neighbouring emirate Dubai, which is worst hit among all the other emirates in terms of job cuts, as it relies heavily on banking and property industries, said Mahdi Mattar, Chief Economist, Shuaa Capital.
Mattar expects that Abu Dhabi located 100kms along the Arabian Gulf Coast from Dubai will absorb workers who are laid off from Dubai, as, unlike Dubai, Abu Dhabi relies on its vast oil wealth to sustain growth during the global economic crisis.
One of the largest employers in Dubai, Nakheel has already laid off 15% of its workforce due to the decrease in demand for real estate. Other major investment banks such as Goldman Sachs Group, Morgan Stanley, and Credit Suisse Group have all shed workers in Dubai last month, which had further added to the gloom.
About 30 percent of Dubai’s economy is contributed by property sector and the sector is now suffering its first downturn in six years, with the emirate permitting foreigners to own homes for the first time. Due to shortage of oil, unlike its other Gulf neighbours, Dubai has had to attract foreign companies and skilled western workers with tax-free business parks and luxury hotels, which has transformed Dubai into a commercial hub in the region.
However, companies in Abu Dhabi can continue to grow withstanding downturn, as they are sheltered by the oil wealth of the emirate. Abu Dhabi, has the credit of owning the fifth largest oil reserves in the world.
As per the law in UAE, foreign workers are required to leave the country within a month of losing their jobs. Hence, these expats when they lose their job, need to find a new sponsor quickly, as they can obtain a residency visa only through their employer or government sponsor.
The Chief Economist at HSBC Holdings-Middle East, Simon Williams, expects more expat workers to move into Abu Dhabi in search of employment, while Dubai’s economy weakens.
According to Sundus Management Consultancy, the Abu Dhabi-based employment firm, increasing numbers of Dubai expatriates are now seeking opportunities elsewhere before a further slump in the emirate’s economy. About 50 percent of workers in Dubai are now seeking fresh employment opportunities, the company said.
According to a consultant at the Sundus Constultancy, about 35 resumes are received per day from people in Dubai, seeking opportunities in Abu Dhabi, due to the bad market conditions prevailing in Dubai, and about 70 percent of the Abu Dhabi clients of the agency, plan to recruit new employees during first quarter of next year. Posted on 8/12/2008
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