Diaspora Speaks

My Experiences in Dubai* - Rajpal Rao

I am basically from Karimnagar Dist in Andhra Pradesh but did all my education in Hyderabad. It was a long time ago I dreamt of  going out of India in search of new avenues, but it was in 2002 I got a chance to go to Dubai, UAE for the first time. For  the first time in my life I was going out of India. Since I am a bit sensitive guy, the feeling that was I was leaving my  home country and loved ones was hurting me so much from inside that at one time I decided to abandon the plan, but thought of  my parents who had given me a lot and its my turn now to give them back.

The day has finally come to board the flight. Luckily, I booked my fleet on Emirates - the airlines operated partly by Dubai  Government. When, I say luckily here, one might wonder what is so lucky in it. Any airlines is the same, but my experience says its  not, though its only 2-3 times I flew, think we are diverting, will get  back to this later. With all my moody thoughts about my mom's  (parents) love towards me, the days I spent with my friends in Hyderabad, the time I spent with my relatives, those long drives to dhabas , my regular travel which generally takes 5-6 hrs to go to my native place, the greenary it has on the way, the weather, especially in winter  and rainy seasons, the fields which we come across in the course of travel, all, the feeling of missing was so horrible. While I was in these thoughts, it  suddenly happened that pilot made announcement about the take off. Since it was my first flight, I was keen to gadgets in flight around me. It had a small touch screen for entertainment. The total time to reach Dubai was  3:20 mins. Finally, the flight took off with full speed. I was a bit busy struggling with screen and entertainment stuff,  but how long can I work on that. I just took some time to take rest. Now my thoughts started wandering around my college &  professional life.

Because, I was given window seat, I could see arial view of the land before reaching Dubai, it was completely dry with little or no greenary at all, scattered houses, nothing was  looking like my home country. It was very different. I was just thinking of my new life, profession and future in Dubai,  a foreign place, the place, which I never thought I will go to, in my wildest dreams. The first thing I felt as the flight landed in Dubai was, frankly speaking, not so great I can say. It was a huge airport, donno stats of it, but it took me totally 20 mins walk on escalators, moving walkers or whatever, to  come out of the airport. While I was traveling on Dubai roads, in fact, I felt it was neat and tidy. The roads were broad  with 5-6 tracks and lane system is strictly followed. There were cameras (radars) fixed on highways and round abouts to monitor vehicles. It  was totally different feeling to be in such place. I was in Dubai for a total of 3 months but failed to secure a job. There is a lot of malayali population here. Its an unbiased fact that the major Indian diaspora in Gulf are mallus. I went back to India and joined Medical Transcription company and was there for 1 more year.  Since I made a statement here about mallus, I also need to mention that the mallus whom I met in Hyderabad while in college and my professional career were real good people, very cooperative and friendly.  I again tried second time in 2003 and landed in Dubai. This time I came in Indian Airlines, the first impression that I got was, its not more than any Hi-Tech bus that runs on road, except for the difference that this flies in air with some air hostess' in it. This time within one month I could manage to get a decent job for myself. Presently, it has been more than an year, since I am in Dubai. After I settled in job, I happen to search for Telugu related associations and in due course I found Telgugu Sravanthi - a voluntary cultural association run by UAE Telugu people, which is active in spreading the presence of Telugu language and culture in UAE.  Programs such as AksharaJyoti , NatyaJoyti and SwaraJyoti are  taken up more actively to spread awareness among younger generation.

Life here is cool with not many tensions, but otherwise, its very routine with less scope for other social activities. The first and foremost thing which took me to deep thoughts here is the situation of labor working on construction sites. Its a very strenuous job in the hot summer and they are paid very less. Some of the companies don’t even pay them continuously for 4-6 months. Its a very pathetic and trouble some situation for them. Most of them tend to work for that low salary. 

Now, let me update you on some facts about Dubai like market, real estates, industries etc....

REAL ESTATE & CONSTRUCTION SECTOR

The UAE real estate market is set to witness a mammoth growh rate and estimates to touch Dh230 billion. The contributing  factors for these investments in real estate sector are the sustained upward trend in current international oil prices, which  lead to the availability of surplus funds especially with the AGCC governments. These funds are mostly invested in  government-sponsored development projects including infrastructure. The inflow of investments in this lucrative sector have reaped higher benefits and sustained appreciation for investors. The major triggering factor for huge growth in property  market is the flexibility in local and regional property laws and regulations that have allowed foreigners and AGCC nationals  to own real estate, the freehold properties. Keeping in view the estimation in population growth to 2.1 million by the year 2010 and the rising number  of tourists visiting the UAE will trigger demand in both residential and hospitality sectors. As many as 45 new five and  four-star hotels are coming up across the Arabian Gulf region in the next three years. A well-developed infrastructure is  another factor that facilitates the business environment in Dubai and the UAE and is an added attractive feature to these  multinationals.

During the next five years, it is predicted that the cost of construction projects may amount to Dh200 billion as various  projects are in the pipeline in all the Emirates. This will eventually play a significant role in UAE's economic structure.

Various projects have been designed to transform the geographic nature of Dubai and help realize the emirate's ambitious vision to become a preferred international destination for investment, tourism, business and residence.

Market research on real estate sector indicates that the size of AGCC market may touch around $90 billion in next four years. The region has witnessed phenomenal growth in this sector which in fact saw an annual growth of 8 per cent in supply, while in Dubai specifically, has seen double-digit growth in supply.

Nakheel Properties, the major in property development company in Dubai, has 13 iconic projects currently under various stages of development which would account for a combined investment in excess of $25 billion. And, with the launch of several more landmark projects in the future, this figure would be doubled. The development plans approved by Dubai are based on building a powerful multi-activity economy that would not depend only on oil industries, it is inevitable to take the initiative and develop unconventional ideas and projects that would combine innovated designs and powerful execution in a bid to provide the infrastructure necessary for boosting these plans. The latest project announced by Nakheel is The Palm-Deira. Other projects comprise the largest man-made islands in the world, The Palm-Jumeirah, The Palm-Jebel Ali and The World Islands project. The development of The Palm-Jumeirah is expected to be completed by early 2006 and that of The Palm-Jebel Ali by the end 2007. The World Islands project, located some four kilometers off Dubai's shoreline in the Arabian Gulf waters, comprises 300 man-made islands to form the map of the world. 

EMPLOYMENT & SALARY MARKET

Soaring prices and stagnating salaries are forcing nationals to turn to bank loans to meet even day-to-day needs and expatriates to send back families home. A cross-section of people in Dubai and Sharjah are worried about skyrocketing prices and crumbling lifestyles. Rents have soared from 75% to 100% over the last two years in Dubai and Sharjah. Most of the expats feel with the depreciation of US dollar against UAE dirham, it has become impossible for them to save money and it has become worthless to work in the UAE.

The other contributing factors for depreciated lifestyle of expats in UAE are transport costs with the increase in petrol prices twice during 2004 led to a significant financial burden on family budgets. Healthcare, although, under the Federal Labor Law, employers should meet the employees healthcare costs, many companies have failed to adopt health insurance scheme or to refund the costs. Such employers were just looking to minimize operational costs and to make highest possible profits. Moreover, some establishments put the cost of issuing heath cards, a prerequisite for issuing and renewing visas, on their employees’ account. Water & power charges have also increased. Foodstuff, the increase in food prices ranging from a few fils to a few dirhams has burdened family budgets. It is said that salaries of few government employees had not increased for more than 15 years. The open market policy of the country does not allow pricing control of the food stuff. Prices of foodstuffs are determined by agents and suppliers based on the market’s supply-demand status. Salaries, the pace at which the cost of living is increasing, the salaries are not. This is forcing most of the expats to send their families back home and live alone. The hike give in some of the companies is very low or not at all. The other day I remember reading in one top news paper on this issue.

The National Human Resources Development and Employment Authority (Tanmia) is considering imposing a job quota for UAE national women in the private sector in specific professions taking into consideration the fact that women represent 75 per cent of the job-seekers registered with Tanmia. About 850 trade companies will have to meet the job emiratisation target of 2% by the year end, a survey has found. Tanmia, the agency overseeing the emiratisation efforts, which conducted the survey, said that stringent action would be taken against companies employing more than 50 hands if they failing to meet this target.

Emiratisation is the process where the government is taking steps to provide employment to the nationals, training and making them competitive and thus helping them to secure jobs.

As 70 per cent of the 25,000 nationals registered with Tanmia were women, companies were asked to provide suitable work environment. In 2001, Tanmania helped employ 124 nationals. The number increased to 559 in 2002 to 882 in 2003 and to 1,400 until the end of October 2004.

ROAD NETWORK IN DUBAI

The International Road Federation (IRF), the leading global body for the road industry worldwide, recommended UAE for the rapid growth in its road infrastructure that has registered a growth rate of 100% over the last six years. According to IRF figures, the UAE has added well over 500 km of roads since 1997.

GDP CONTRIBUTING INDUSTRIES

Eight sectors contributed about 96 per cent to Dubai's total output in 2002-2003 according to the Dubai Municipality's economic survey.

The sectors that contribute maximum to the labor and capital productivity are manufacturing (excluding handicrafts); construction; trade; hotels; transportation; communication and storage; insurance; banking and finance; real estate and business services.

The industrial sector in the UAE contributes more than 13 per cent to the Gross Domestic Product (GDP) and plays a significant role in the national economy of the country.

According to a study, the big industries such as aluminium, oil products, food and chemical fertilizer industries contributes to the GDP and made in UAE products has witnessed a steady growth since 2000 and form the major portion of the UAE industrial exports. Plastic Industries are also one of the major contributors in the industrial growth of the country. 

To further boost the industrial growth in the UAE, the government has also planned a strategy to build many industrial cities and provide necessary infrastructure to face the challenges of globalization. 

The Abu Dhabi Industrial City is one such facility and Jebel Ali Free Zone is targeting a 40-45 per cent growth in the number of companies operating from the zone by 2006.

The UAE’s GDP last year (2003) reached Dh284.5 billion as compared to Dh6.5 billion in 1972 at the beginning of the union. The 13 per cent annual growth rate in GDP reflects the soundness of government policies that aimed at diversification of the sources of national income through decreasing dependency on oil and increasing the share of the non-oil sectors.

Official figures showed that the GDP share for non-oil sectors roared up from Dh2.3 billion in 1972 to Dh199.2 billion last year, with 15.5 per cent annual growth rate. The utilization of oil proceeds and revenue for development and the adoption of free market system and policies resulted in attaining high rates of growth for the national economy of the country. As the productive sector emerged as a cornerstone in the process of national development during 1972 -2003. GDP for oil sectors increased from Dh4.1 billion in 1972 to Dh84.9 billion last year, growing at the rate of 10.3 per cent.

As for the manufacturing sector, the share in GDP went up from Dh178 million in 1972 to Dh39.7 billion last year, scoring 18.5 per cent growth rate, while the share of agriculture increased from Dh116 million to Dh9.3 billion during the same period of time. Electricity and water sector grew by 13.8 per cent, registering an increase from Dh84 million at the beginning of the union to Dh5.5 billion last year.

The industrial production value went up from Dh425 million in 1972 to Dh76 billion in 2003, while the value of agricultural production rose from Dh154 million to Dh11.8 billion for the same period. Electricity and water production value witnessed an increase from Dh108 million to Dh10 billion during 1972-2003.

The UAE government has pumped more than $8 billion into its manufacturing sector as part of its economic diversification plans. The investments covered a wide variety of products, but chemicals and metals took the lion’s share of the funds invested.

By the end of 2002, public and private industrial investment in the UAE totaled nearly Dh30 billion — more than double the level 10 years ago. Official data showed that such investments made the UAE the third industrial power in the region after Saudi Arabia and Egypt.

The UAE’s march towards economic diversification through rapid industrialization gathered pace in the year 2003, with investment in industry posting an increase of more than 40 per cent. The total investment in the year 2003 was Dh43.62 billion, recording a growth of 43 per cent over the previous year.

Abu Dhabi, which has been attracting several capital-intensive industries at its industrial cities, saw Dh15.61 billion invested in its various industries, while Dubai was close behind with investments totaling Dh14.32 billion. Sharjah was next with Dh3.52 billion last year.

The number of industrial units in the country totaled 2,795 at the end of last year, compared to 2,500 units in 2002. Dubai led the field with 1,058, followed by Sharjah with 879, Ajman with 360 and Abu Dhabi with 258. 

Abu Dhabi government continued to lead the way in privatization. It expects local and foreign investors to pump in at least Dh365 billion into its emerging industrial zones.

Around $1.36 billion had already been invested in the emirate’s first major industrial city in Musaffah, just outside the capital. Abu Dhabi has ambitious plans to stimulate its economy by attracting capital and building an industrial base that will diversify its sources of income and offset volatile oil sales. Abu Dhabi is also conducting a study to set up a major complex for companies involved in the servicing of onshore and offshore oil and gas fields. The complex is expected to be a nucleus for one of the largest industrial centers of its kind in the region.

Two of the emirates, Dubai and Sharjah, house 68 per cent of the factories in the country, according to a report by National Bank of Dubai.

Metal and chemical sectors account for a substantial chunk of the factories. Among the various manufacturing industries, basic and fabricated metals form the largest in the UAE. 

FOREIGN TRADE IN DUBAI

Dubai’s foreign trade is projected to cross the value of Dh250 billion in year 2010, according to Dubai Chamber of Commerce and Industry (DCCI).

Based on vigorous economic diversification policy set by the government of Dubai, other major economic sectors such as manufacturing, construction, transport storage and communication and financial services will also witness substantial growth to meet local requirements for goods and services.

RETAIL SECTOR

The retail industry in the Middle East is moving at a frantic pace to touch Dh30 billion mark, representing fourth largest contributor to the UAE’s GDP, according to a report in local media.

Current projected high demand growth areas for franchising in the Middle East include restaurant and fast-food outlets, quick printing, laundry and dry cleaning, temporary office services, retail and convenience stores.

This is in addition to other identifiable high growth sectors like automotive, apparel, education, beauty, IT, hotels, car rentals, retail goods, food products and much more.

ARAB WORLD AND DIGITAL DIVIDE

Considering that two-thirds of the world's oil supply a major source of economic wealth comes from Arab region, its surprising that economically the Arab nations rank poorly in terms of overall competitiveness; only six out of 22 Arab countries appearing in the 2004 World Economic Forum report ranked within the top 20. With information and communication technology [ICT] becoming the tool for further growth, it becomes imperative for any country to have sufficient human capital base to use ICT for growth.

The economic foundations of Arab society and civilization will be gravely threatened once resources are depleted, taking into consideration the narrow resources that are focused on oil or tourism. The main economic focus is on selling oil and gas resources, and these may not last for very much longer unless immediate and effective measures are taken to address the situation.

What were once considered the prime engines of growth and wealth creation are, to a large extent, no longer so. The richest people in the world were once those who owned commodities like land, oil or capital. Today, the richest persons in the world are those who own systems, processes and technology. This shift in the drivers of growth and wealth creation from commodities to knowledge has profound implications for the economic and commercial strategies of all nations.

The importance of knowledge as a vital asset to the political, economic and social wellbeing of a nation. At present, more than 50 per cent of the GDP in major OECD economies is based on the production and distribution of knowledge.

During the period 1960 to 1985, the Arab region surpassed all other regions except East Asia in terms of income growth. There was massive foreign investment, infrastructure development and expansion of education and health facilities. Poverty rates were reduced to the lowest levels in the world. The Arab world therefore achieved remarkable progress in the human development during this period. The price of oil reached unprecedented heights, and functioned as the primary engine of growth and human development. This growth, however, could no longer be sustained. Once the oil prices began to fall or the resources get depleted, and together with other factors lead to the decline of productivity and growth in the region.

Further sustainable growth could only be possible through major economic and social reforms, and central to them was the need to seek new engines of growth.

NOTE: The content in the above article is taken from the local newspapers and other statistical sources

* Article originally published at his website >>. All comments can be sent to Rajpal Rao Miryala at <rajpal_9999@yahoo.com>