JEDDAH, 21 May 2008 — With the US economy bordering on recession and European economies struggling to maintain their pace of growth amidst record oil prices and rising global inflation, more Westerners are heading for Saudi Arabia and the Middle East in search of jobs and a cheaper cost of living.
“My family and I have been living and working in Riyadh and Jeddah for the past seven years,” said Diana, a nurse from Hawaii who works at a government hospital. “Despite local complaints about the high cost of rent and food in the region, it is still better living here in terms of housing and utilities rates, and food and fuel costs. In the US, many people have lost their jobs due to numerous company layoffs,” she added.
According to a recent Bloomberg survey, the US unemployment rate climbed to 5.2 percent in April from 5.1 percent the previous month.
The survey also showed that the rate of economic growth has also slowed to its lowest level since 2001 in the past six months. Currently, the economic situation of the basic consumer is worsening as home foreclosures surge, gas prices approach $4 a gallon and food prices mount.
As a result, US Federal Reserve Chairman Ben Bernanke conceded for the first time that a recession is possible, while deciding to cut interest rates yet again by a quarter point increasing the rate to 2 percent.
But the United States is not the only country to suffer from an economic slowdown.
European economies are also suffering from a weak dollar, something that is contributing to the rise in global inflation. According to the UK’s Office for National Statistics, the British economy, the first of the G7 nations to report its economic performance this year, has only grown by 0.4 percent in the first three months of 2008 — a decline from 0.6 percent the previous quarter and 0.9 percent at the end of 2006.
The International Monetary Fund in its latest report on the world economic outlook forecasts growth for Britain will only amount to 1.6 percent by the year’s end — a drop by nearly half from the 3.1 percent the UK reported last year. The report also stated that the Euro area, which reported an average GDP of 2.6 percent in 2007, is expected to register an average GDP of only 1.3 percent by the end of this year, while seeing a further decrease to 1.2 percent by the end of 2009.
Anxious that they may be the next victim of job cuts, some Western employees are requesting transfers to the Middle Eastern branches of their firms to save their jobs until economic woes in their countries are resolved.
Dimitri, a British national, said, “I first moved to the Middle East two years ago as part of a relocation program I applied for with the company I currently work for. I was first sent to the UAE when they opened an office in Dubai and was then relocated to Saudi Arabia initially for one year.”
He added, “I must admit I had concerns about the standard and way of living in the Kingdom and the region. However, upon moving to Saudi Arabia I found that these worries are somewhat a myth. Having lived here for over eight months ... I would be willing to extend the duration of my contract here.”
Dimitri also added that, apart from a lack of opportunities in the West, Westerners also find the Middle East’s vast potential attractive. “For me, one of the most obvious advantages of moving from the UK was the tax benefits, which add a further 40 percent to my income,” he said.
Michelle, an American science teacher at an International School in Jeddah for the last two years, said, “I think another advantage of living in Saudi Arabia is the crime rate. Things happen from time to time here, but incidents aren’t so widespread compared to other countries.”
She said she felt the Kingdom is an ideal place to raise children. “Local schools teach religious respect and do not forget the necessity of lessons on family values that many places in the West have silently labeled as unimportant curriculum,” Michelle said.
