16% of total jobs in the United Arab Emirates (UAE) have been eliminated during just the last 12 months, according to the Wall Street Journal. This is because government companies are the largest employers, mostly in construction, and property companies such as the infamous Nakheel are reeling.
One wonders what the longer term effects of such a sharp jobs destruction might be.
‘Luckily’, for the UAE, many of these workers can just be sent home. They won’t have to deal with mobs of unemployed with nowhere to go. So perhaps their serfdom model of construction employment could pay off of the country.
There are even more job losses to come.
WSJ: Last month, Deyaar Development PJSC (DEYAAR.DFM), Dubai’s second-largest developer, laid off around 60 people, or 20% of its workforce. Dubai World has cut its global workforce by 15% to just under 70,000, with the deepest cuts in the U.A.E. Last November, Nakheel cut 500 jobs, or 15% of its workforce.
A further reduction of the emirate’s working foreign population could weigh on an economy already hit by a 50% fall in real-estate prices over the last year. Oil sales account for less than 5% of the sheikdom’s economy, with the majority of its income coming from service industries, retail, trade and tourism.
Of those expatriate workers who were laid off, most returned home, the survey said, while others relocated to neighbouring Abu Dhabi or other Gulf countries such as Qatar and Saudi Arabia. Gulf Talent said among expatriates living in Dubai, the percentage who work in Abu Dhabi has tripled over the last year to 3% from 1%.
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