The UAE announced that it would raise the salaries of civil servants and military officials by 70 percent, with such increases expected at the beginning of the New Year. But to many UAE residents, that would not apply.
With the cost of living in the UAE, the Middle East’s second-largest economy, rising steadily as the country benefits from an economic boom and rising oil prices and facing decreasing value of its dollar-pegged dirham currency, many expatriates find themselves on the outside looking in on this increase.
As reported in this paper, reactions from those not to be graced by the increase were on predictable lines. “Dubai is becoming a city for rich people,” said K.K. Kumar, a longtime resident. “I work in the private sector and my monthly salary is 12,000 dirhams. At present, I am not saving a single dirham.”
Mahmoud, a Pakistani engineer based in Dubai, said he had to send his family back home to make ends meet. “My wife was also working,” he said. “Our salaries are stagnant and increased house rents have made the situation bitter.”
“Everything has shot up,” said Basheerudheen, a resident of Dubai. “Rent, petrol, water and electricity, education, bread. Salaries are stagnant and a decent life is only a dream nowadays.”
“Increasing wages is probably intended as a means to counteract inflationary pressures, but increasing wages would essentially fuel inflation,’’ Mary Nicola, an economist for Standard Chartered Plc in Dubai, said in a telephone interview.
A survey conducted by market research leader YouGovSiraj reveals that almost half of UAE residents dedicate upward of 30 percent of their monthly salary to rent. 51 percent of Qataris reported similar rates of expenditure, confirming the recent upward trend in that country’s housing market as well.
Over 8,500 respondents from across the region participated in the online survey. The survey also covered utilities, car financing and company-paid perks. Across the region the research findings consistently show that housing expenses continue to have the largest impact on the pocket book.
Some 88 percent of UAE respondents said they lived in rented accommodation, compared to just three percent who owned their own homes.
When it comes to rent increases, Oman, Qatar and the UAE experienced the largest hikes, with 42 percent, 32 percent and 23 percent of tenants, respectively, shouldering increases of 20 percent or more.
Elsewhere in the GCC, just nine percent of Bahraini residents have witnessed a 20 percent increase or more, with the majority of respondents reporting no increase at all. Some 34 percent of Saudis say they experienced no increase in their rent either.
The survey shows Qatar and UAE as the countries with the highest rent. Compared to other countries where around 60 percent pay rent of less than $750 a month, in Qatar and UAE, a majority of 66 percent and 58 percent pay a rent higher than $750.
This increase in rents is forcing people to adopt alternative lifestyles, as more and more people share accommodation to make ends meet. Around a third of people in Qatar and the UAE said they shared accommodation with another family or individuals not from the same family.
Some speak out in frustration against this unchecked rising spiral. “Who is there to protect us?” stated a long-term Indian resident. “This country has been built on the blood, sweat and tears of people like me, but we are being rapidly forced out of this society. Is that the gratitude to expect? It just doesn’t add up.”
As Mary Nicola, an economist for Standard Chartered Plc in Dubai, stated, “Increasing wages is probably intended as a means to counteract inflationary pressures, but increasing wages would essentially fuel inflation.” This would bring little comfort to those residents already stretched beyond their means.
