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Dubai Economic Slowdown Leaves Foreign Workers Stranded

For the last decade or so Dubai became a true boomtown. With unparalleled growth in both real estate and tourism, the city became one of the most popular destinations in the Middle East and was developing a reputation as a playground for the rich and famous on the Persian Gulf. As the global economic slowdown hits the region, all that is changing.

In recent years, development was constantly increasing. Resorts, luxury Dubai hotels, sports and entertainment venues, high rise apartments, and countless restaurants and shops were built or under construction to support the influx of both residents and tourists. The UAE’s support of foreign business saw an increase in business travelers as well.

A large number of those employed to build these projects were foreign workers. Construction workers from all over the Middle East and Southeast Asia flocked to the area’s booming job market. A majority of the now unemployed workers come from Pakistan and India and they don’t have the money or the ability to return home. Many companies are holding workers passports hostage in order to ensure that they have a ready-made workforce once the economy swings back up.

Over half of the UAE‘s development projects are on hold. This represents $582USD billion of investment. While a handful of the projects are moving forward with help from the recent $10 billion Abu Dhabi bailout, most projects are at a standstil, leaving all those foreign workers stranded.

Groups such as the UN International Labor Organization estimate that hundreds of thousands of unskilled foreign workers are now unemployed in the Gulf region. Lured by the promise of the building heydey, they are now forced to cram into tiny apartments with dozens of other men and hope for the best. The corporate practice of keeping worker passports prevents them from finding work with other companies in the area as well as from returning to their homelands to look for work.

Some experts are hopeful that the economy can stabilize following the bailout as well as an influx of $20 billion to the sovereign bond program. There is also the chance that oil prices will rebound. However, the effects of these changes will take time to trickle down and whether some foreign workers will ever be rehired remains a big question.

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Tags: dubai, ILO, luxury hotel, UAE

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