Dubai crisis raises migrant worker fears

Posted by admin on Dec 8th, 2009

By Magdi Abdelhadi, BBC News, Dubai, December 8 2009

The large numbers of migrant workers in Dubai from Asia and the Middle East are likely to bear the brunt of the emirate’s severe credit problems. For them Dubai had offered an escape from poverty in their home countries. Mohammed is from Bangladesh. He has heard about the financial crisis from newspapers, he tells me. Two of his friends have already lost their jobs. Dubai’s construction sector still bears the scars left by the recent global financial crisis. It had been enjoying a boom, financed by borrowed money. But Mohammed says he has heard of thousands of workers made redundant in one big company alone.

And now that one of Dubai’s biggest government owned companies, Dubai World, is having trouble paying back its debt, there is renewed fear that more migrant workers could be sent home.

Mohammed is concerned. His brothers and sisters back home depend on the money he makes in Dubai for their survival.

His story echoes that of hundreds of thousands of migrant workers from Asia and the Middle East.

They built Dubai – they continue to clean its streets and keep most of its institutions running – and in return, remittances earned there have helped them survive or climb out of the grinding poverty in their home countries.

“ Find me someone who is not worried about what will come next ”
Egyptian waiter

But in Dubai, residency depends on having a job or having a big bank account. If you don’t have either, you can be sent home.

There are many people like Mohammed, but they are often afraid to talk to the media. Those who are caught can be accused of tarnishing Dubai’s image and be thrown out of the country.

“Find me someone who is not worried about what will come next,” whispers a waiter from Egypt working in a Lebanese restaurant, when I ask him whether he is worried.

That feeling seems to be pervasive.


While everyone was scratching their heads trying to find out the likely impact if Dubai World defaults on debt repayment due on 14 December, Dubai itself was putting on an extravagant show to mark the United Arab Emirates National Day.

The flags were being flown everywhere. Even women in traditional black dresses had the colours embroidered on their headscarves.

With the party in the background, I came across a group of Pakistani workers repairing the facade of a building, even though it was Friday and a public holiday.

One of them began to talk about unpaid salaries and colleagues who had lost their jobs.

But as soon as he suspected a security guard was approaching he changed his tune. “Dubai very happy, Dubai no problem, no problem,” he said in pidgin English.

At the other end of the social scale, Farah Agha, a Pakistani property investor who lives in Dubai, is angry. But for completely different reasons.

She lives in a spacious and luxurious apartment in the heart of Dubai’s financial district.


From her window on the ninth floor you can see the palace of Sheikh Mohamed Bin Rashid Al Maktoum, the ruler of Dubai, and the man widely credited with transforming it into a brand name, a financial centre and a tourist resort in record time.

Ms Agha has seen the value of her investment plummet because of the global financial troubles and then the Dubai World crisis.

She accuses the authorities in Dubai of making the rules up as they go along.

“We have seen over this space of time, even the rules and regulations are changing. And sadly it has always been at the detriment of the investor,” she argues.

“If they feel that new investors will come even though the old ones are not satisfied, it’s not going to happen, because they need to have a stable set of laws and regulations that govern the UAE, especially Dubai.”

The Dubai government has made it clear that it will not bail out its debt-stricken companies, insisting that although Dubai World is owned by the government, legally it is a separate business entity.

The next few days will see febrile negotiations between creditors and the Dubai government over how to settle this dispute.

One thing is certain though, says one analyst. Whatever the outcome of the negotiations, affected companies in Dubai will have to downsize – a euphemism, in this case, for laying off more foreign workers.

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