# How is the economy?



## TallyHo (Aug 21, 2011)

From your perspective?

Lots of doom and gloom being said these days. I have noticed a general drop in the number of new posters moving to the UAE and asking questions on here. Wonder if that reflects anything or it's just anecdotal. 

Are we heading for another 2008/2009 crash this year? My company is laying off a few people but so far no real panic.


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## Sunder (Mar 11, 2014)

Even the salary/offer questions page has not a new post since last 10 days.


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## Mr Rossi (May 16, 2009)

TallyHo said:


> Are we heading for another 2008/2009 crash this year? My company is laying off a few people but so far no real panic.


I'm no economist, but last time around was a proper house of cards crash, so not really comparable to what is an proportional decline across most sectors.


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## The Rascal (Aug 6, 2014)

The UAE economy is going down the toilet, more and more people are getting their cards, companies aren't recruiting, rents and shares are down, it'll only get worse.

Just make sure you have cash behind you and no debt.

And on that cheery note....


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## pumpkins (Oct 13, 2009)

I'm not sure rents are down, though they should be. A friend has just moved from SZR due a 10% rise. What are your thoughts on savings sitting in UAE banks, safe enough? You can still get better rates here than in the UK, without the fixed term commitment.


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## zaika (Aug 2, 2015)

Everybody says it's getting worse, but in Dubai Marina more and more residential towers are being built. I can't even sleep at night sometimes, I need earbuds... 
Not mentioning the Dubai Creek Harbour project.
So these towers will be for EU/USA expats for sure, then I suppose there is a certain trust in the future (?) 

I share the OP doubts as I recently moved and would like to know what do you think 

Cheers!


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## Mr Rossi (May 16, 2009)

Some rents will go up, some will go down. It's not always a clear market indicator and there is the regional nuance to raise prices in lieu of income to make up the shortfall..

Where I'm concerned, is the last recession was caused by a bubble meaning only those that were stupidly exposed were affected. There was a natural thinning out of Dubai that was required and some sectors, such as retail and tourism, profited all through it.

This time around the UAE will require the skills and strategy of it's inhabitants to weather the storm and, being frank, in my time here I rarely see evidence of either beyond individuals or the smallest of teams.


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## twowheelsgood (Feb 21, 2013)

Rents are certainly down but the strange way the stats are produced, leaves at least a 12 month to two year lag in the numbers changing. Speaking from 'our floor' half the apartments have emptied over the last six months. No one has moved in. One person moved in under us judging by them hammering but the apartments either side of them have emptied out.

Across in an identical block to ours, work person transferred from Qatar paid 10% less than we pay for same floor, different aspect with a far higher standard of finish. Company has thus far laid off 10-15% of UAE staff last week as the pipeline of opportunities is certainly thin.

Certain large construction schemes regularly appearing in the press are going ahead (2020 and 2022) but so many other high profits developments are being kicked into the long grass with the reason being redesign after redesign. Standard residential schemes continue as there is a demand already for them and for 2020 they will need to get ahead of the curve now.

Of my wifes circle of about a dozen friends (all their husbands are in oil & gas ) only three remain and only one of them has a contract past May.

It may not be a crash like 2008, but its a controlled slide this time and the authorities seem to have a decent plan to avoid the place tanking.


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## TallyHo (Aug 21, 2011)

It's the pipeline that's intriguing and even worrisome. Government contracts aren't necessarily being cancelled in large volumes but so far I'm seeing a trend of contracts not being renewed. Tendering is extremely slow, almost non-existent in the UAE. In Qatar there's a sense of paralysis although that is partly due to yet another round of ministry restructuring putting all tendering and contract extensions on hold and not to mention payment of work done.

Oil prices have fallen sharply to now sub $30 a barrel and may keep sliding. it will have a long term impact on the country. What will the picture look like six months from now? Very, very hard to predict, harder than I'd have thought. The stubbornly high rents complicate the overall picture. 



twowheelsgood said:


> Rents are certainly down but the strange way the stats are produced, leaves at least a 12 month to two year lag in the numbers changing. Speaking from 'our floor' half the apartments have emptied over the last six months. No one has moved in. One person moved in under us judging by them hammering but the apartments either side of them have emptied out.
> 
> Across in an identical block to ours, work person transferred from Qatar paid 10% less than we pay for same floor, different aspect with a far higher standard of finish. Company has thus far laid off 10-15% of UAE staff last week as the pipeline of opportunities is certainly thin.
> 
> ...


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## XDoodlebugger (Jan 24, 2012)

TallyHo said:


> It's the pipeline that's intriguing and even worrisome. Government contracts aren't necessarily being cancelled in large volumes but so far I'm seeing a trend of contracts not being renewed. Tendering is extremely slow, almost non-existent in the UAE. In Qatar there's a sense of paralysis although that is partly due to yet another round of ministry restructuring putting all tendering and contract extensions on hold and not to mention payment of work done.
> 
> Oil prices have fallen sharply to now sub $30 a barrel and may keep sliding. it will have a long term impact on the country. What will the picture look like six months from now? Very, very hard to predict, harder than I'd have thought. The stubbornly high rents complicate the overall picture.


They cancelled the tenders for Etihad rail phase II, major Maktoom Airport earthworks were supposed to start in early 2015 but nothing happening, other awards have been made but work orders not forthcoming. Hold onto your hats unless oil gets to $50 by the end of the year.


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## twowheelsgood (Feb 21, 2013)

XDoodle****** said:


> They cancelled the tenders for Etihad rail phase II, major Maktoom Airport earthworks were supposed to start in early 2015 but nothing happening, other awards have been made but work orders not forthcoming. Hold onto your hats unless oil gets to $50 by the end of the year.


The problem with Etihad Rail was that all the decent contractors got fleeced on Phase 1, and refused to take part in Phase 2, combined with Oman being years behind and the Saudi's not really up to speed as well.

They have no funding for the Al Maktoum airport according to the papers a few months ago which is why they are looking at PFI type schemes but the law is so heavily biassed in favour of the client they can't get anyone to lend them the money.

Basically, its tick over time and my contacts say 5 years of lack of mega-projects.

Remember Mall of the World ..... ?

Dubai’s Mall of the World master plan revamped for transport system | The National

The problem for Dubai is that returns are very very low and there are better places for our hosts to invest money in - Egypt for example which needs stability and Iran which despite the political differences, will want what the Emirati experience gets you.


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## MariusvanderBank (Feb 8, 2016)

From what I read here, it does not make good sense for real estate agents to relocate to Dubai at this stage? 😳


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## Fat Bhoy Tim (Feb 28, 2013)

As long as you can keep your job (and shirt) this place is far nicer during a recession.


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## TallyHo (Aug 21, 2011)

Especially if rents drop by half! Glory days. 



Fat Bhoy Tim said:


> As long as you can keep your job (and shirt) this place is far nicer during a recession.


During the '09 recession it was a bit nerve-racking not knowing whether you'd have a job next week or next month and it was fairly stressful for about a year till things bottomed out and you were on firmer grounds. The difference was that in those days if you were sacked and had to go home, the economies back in the UK/US/Australia were also terrible. 

But these days? If I finally succumb to redundancy after avoiding it for so many years, I won't mind. Economy back home is still ticking along solidly and I'm tired of the UAE and the sheer preponderance of numpties. I'd probably take a few months to wander through SE Asia and Australia/NZ before going back to the UK, kick the tenant out of my flat and start hitting the rolodex. Can you see I'm sort of hoping this will happen


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## Mr Rossi (May 16, 2009)

TallyHo said:


> Economy back home is still ticking along solidly


From that well known leftie rag The Express - Britain's debt at £1.54 TRILLION as George Osborne blows borrowing targets | City & Business | Finance | Daily Express

I'd also worry about getting ill


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## twowheelsgood (Feb 21, 2013)

MariusvanderBank said:


> From what I read here, it does not make good sense for real estate agents to relocate to Dubai at this stage? &#55357;&#56883;


Correct. There are still too many here as it is.


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## TallyHo (Aug 21, 2011)

Don't worry, mate. What's reported in the Express is the least of my worries.

Anyway, I wouldn't mind being back in the UK in time for the referendum.



Mr Rossi said:


> From that well known leftie rag The Express - Britain's debt at £1.54 TRILLION as George Osborne blows borrowing targets | City & Business | Finance | Daily Express
> 
> I'd also worry about getting ill


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## Fat Bhoy Tim (Feb 28, 2013)

TallyHo said:


> Especially if rents drop by half! Glory days.
> 
> 
> 
> ...


As long as the "wealth adviser" knob jockeys disappear I can put up with the numpties.


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## LesFroggitts (Dec 30, 2013)

Fat Bhoy Tim said:


> As long as the "wealth adviser" knob jockeys disappear I can put up with the numpties.


And the Pension Transfer Out oikes. Just had one try it with me, asked him how far back in time they were willing to go when he asked when I last paid into a pension.

Oh, that's not a problem sir - so I asked how long he'd been doing his job, then told him I've been out of the UK longer than his whole working life.

That shut the ****** up


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## Nursemanit (Jul 10, 2015)

In the building I rent in the security guards were just told to slip notices all the way under the door so they don't show from the hallway. The management does not want to make it obvious how many units are empty.


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## Fat Bhoy Tim (Feb 28, 2013)

LesFroggitts said:


> And the Pension Transfer Out oikes. Just had one try it with me, asked him how far back in time they were willing to go when he asked when I last paid into a pension.
> 
> Oh, that's not a problem sir - so I asked how long he'd been doing his job, then told him I've been out of the UK longer than his whole working life.
> 
> That shut the ****** up


I pulled up the approved HMRC QROPS list and asked how they were licensed, when no firm in the UAE was. 

"Oh, you've just been added? How wonderful, call me back when the HRMC confirms it..."


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## Balla Boy (Jan 3, 2015)

Major regional firms are laying off people in their thousands. If it's not a crash, it will do until one gets here. With only a year under my belt, I'm considering a move to a job that will be Dubai based but EMEA focussed to reduce my risk, even though it will mean a slight reduction in salary. 

Of course the real problem here is the total absence of any independent, reliable, verifiable data. So all you here is sentiment. All in though, when your MD is putting all of his property on the market, it's a bit of a sign


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## Stuckmojo (Apr 11, 2015)

This is an interesting thread. Economic cycles are getting shorter and much deeper. I was under the impression that the UAE was better prepared for a slowdown than last time. 

Some industries are/will suffer (Oil and Gas + real estate) for sure.

Others maybe not so much.


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## TallyHo (Aug 21, 2011)

Remove O&G and real estate from the UAE economy and what are you left with?

Almost everything is exposed to O&G and real estate to some degree. 



Stuckmojo said:


> Some industries are/will suffer (Oil and Gas + real estate) for sure.
> 
> Others maybe not so much.


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## Roxtec Blue (Jan 14, 2013)

TallyHo said:


> Remove O&G and real estate from the UAE economy and what are you left with?
> 
> Almost everything is exposed to O&G and real estate to some degree.


Also O&G expat packages have typically been quite "favourable" with regard to allowances to get people to the ME. That disposable income disappears once the job goes or as in many cases the allowances are cut savagely. The fancy real estate rentals, lavish weekly brunches and premium vehicles are changed less frequently. etc etc. Doesn't seem to have affected school fees much though but your mileage may vary.


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## Mr Rossi (May 16, 2009)

TallyHo said:


> Remove O&G and real estate from the UAE economy and what are you left with?


Tourism - Will drop but there will always be a demand for year round sun or at least winter sun.

Retail - Will drop but spending never completely eradicates

Precious metal/diamond trading

Geographical position - airports, dry docks and Jebel Ali

Company formation/banking - On the alternative to the Kayman Islands scale rather than RAK SMEs

Foreign investment - oh those crazy Arabs buying up London properties and The Gherkin. Not so crazy now.


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## Fat Bhoy Tim (Feb 28, 2013)

TallyHo said:


> Remove O&G and real estate from the UAE economy and what are you left with?
> 
> Almost everything is exposed to O&G and real estate to some degree.


People talk about Dubai being diversified, without mentioning (whether intentionally or unintentionally) that almost all the new economic activity is either to support real estate, or is supported by it. 

At least oil & gas keeps pumping and moving, even if can abysmally low. Fwiw, Abu Dhabi in the mid-90s at about $8-12 a barrel was great. No one wanted to come out here, unless they really wanted to see this part of the world.


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## TallyHo (Aug 21, 2011)

But all of those are dependent on oil revenues to some degree.

Tourism was certainly driven in part by spending Saudis and visitors from other oil-rich countries in central Asia or elsewhere in the Middle East. That has dropped sharply.

Same with retail. The Saudi big spenders have disappeared (as one of my friends in retail have said - we're not talking about the British or German tourist who buys a shirt on sale at Dubai Mall but the spenders who will drop tens to hundreds of thousand AED on jewellery and high priced items. That's where the real profits come from). 

Geographical position - logistics related. Oil demand is down and surely that cuts into the demand for shipping and logistics. 

Company formation / banking. This is highly speculative. The UAE is not the Caymans as the legal / ownership structure here is quite unproven. Real estate was where much of the money laundering was happening. Most of the banking I saw in the last few years was for wealth management for regional wealth, which is still heavily dependent on oil. 

Foreign investment in the UAE was based on high consumer demand locally, whether from tourism or residents/expats. All those brands opening, for example. But once again this is dependent on spending, which once again is exposed to volatility in oil prices.

The only item on your list I know little about is precious metal/diamond trading.

This place certainly won't crash overnight or wither away to a sandpit, but the UAE economy is still heavily exposed to oil prices and in many more sectors than one might expect. 



Mr Rossi said:


> Tourism - Will drop but there will always be a demand for year round sun or at least winter sun.
> 
> Retail - Will drop but spending never completely eradicates
> 
> ...


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## LesFroggitts (Dec 30, 2013)

One benefit would be that the roads ought to be a bit quieter !


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## Balla Boy (Jan 3, 2015)

TallyHo said:


> But all of those are dependent on oil revenues to some degree.
> 
> Tourism was certainly driven in part by spending Saudis and visitors from other oil-rich countries in central Asia or elsewhere in the Middle East. That has dropped sharply.
> 
> ...



Exactly. We're obviously seeing reductions in the direct oil and gas areas. But my firm is certainly hearing that the investment banks are pretty much planning a dead year with minimal deal making, because the money that drives M&A, VC etc is basically oil money. The money that bank rolls the capital development is oil money. The money that people are spending in hotels, restaurants and shops is oil money. 

Dubai's economy is also massively exposed to the rest of the GCC. All the professional services firms based in Dubai are largely dependant on Public Sector spending in KSA and Qatar, as well as in Abu Dhabi, and those are in turn oil related. 

The diversification in economic activity is all well and good, but the root capital for all of it is basically oil and gas.


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## Mr Rossi (May 16, 2009)

I don't dispute your point that everything is tied into oil in some way but you were asking what else there was.

Tourism is down. Saudi, Russian and Chinese spend was the largest in the region for a while but that big, yellow fire thing in the sky will always be an appeal. Money will be lost, earnings perhaps not what they once were but I doubt we'll be seeing pictures of an abandoned Atlantis or Burj on Buzzfeed. The larger factor affecting this would be political instability and safety.

Retail, correct with the demographic of the big spenders and targets currently aren't being met. Most of the groups here have very deep pockets though and even after a considerable downsizing, there will still be an industry. 

Location is a lot more than oil related and everything to do with where the UAE is in relation to Europe, Africa, the far east and Australia. I'm no expert but as I understand it's one of the world's most 'best' hubs.

I think we're both in agreement then, it won't wither away.


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## Balla Boy (Jan 3, 2015)

Mr Rossi said:


> I don't dispute your point that everything is tied into oil in some way but you were asking what else there was.
> 
> Tourism is down. Saudi, Russian and Chinese spend was the largest in the region for a while but that big, yellow fire thing in the sky will always be an appeal. Money will be lost, earnings perhaps not what they once were but I doubt we'll be seeing pictures of an abandoned Atlantis or Burj on Buzzfeed. The larger factor affecting this would be political instability and safety.
> 
> ...


It may wither a fair bit for a lot of people, though. An economy focused on tourism, retail etc isn't going to support a big population of European or North American expats.


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## Mr Rossi (May 16, 2009)

Balla Boy said:


> An economy focused on tourism, retail etc isn't going to support a big population of European or North American expats.


It's not that big and it's not probably the govts concern anyway.

UAE´s population - by nationality


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## Mr Rossi (May 16, 2009)

PS - Forbes Welcome

Don't see any oil or constructions giants on there, maybe the Kochs. It's all banking, retail and tech.


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## Fat Bhoy Tim (Feb 28, 2013)

Mr Rossi said:


> PS - Forbes Welcome
> 
> Don't see any oil or constructions giants on there, maybe the Kochs. It's all banking, retail and tech.


Usually at least 2 oil & gas supermajors in the top 10 publicly traded companies for market cap. Exxon and Petro China. Include the non-publicly held ones, and the expected market cap values adds about another 5 to the list. 

Personal wealth is irrelevant.


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## Mr Rossi (May 16, 2009)

Fat Bhoy Tim said:


> Usually at least 2 oil & gas supermajors in the top 10 publicly traded companies for market cap.


Still a fairly mixed bag beyond they 10 with many companies having a vested interest here.

Forbes Welcome


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## Balla Boy (Jan 3, 2015)

Mr Rossi said:


> It's not that big and it's not probably the govts concern anyway.
> 
> UAE´s population - by nationality




Not numerically, but it's important in terms of the economic agenda of the country. And it's important to me. I mean it's great and all if Dubai keeps ticking along with a population of locals supported by people from various parts of Asia, but for most people posting here I suspect that when we talk about "the economy", we mean the parts of it that support European and North American expats.


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## Mr Rossi (May 16, 2009)

Balla Boy said:


> but for most people posting here I suspect that when we talk about "the economy", we mean the parts of it that support European and North American expats.


I know it's a presumption on this forum, but not all jobs outside of O&G or construction are done by "low paid workers from the sub continent"


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## The Rascal (Aug 6, 2014)

Mr Rossi said:


> I know it's a presumption on this forum, but not all jobs outside of O&G or construction are done by "low paid workers from the sub continent"


Too right, we employ teams of Filipinos, they're cleaner and tidier on the job.


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## Standanista (Sep 26, 2014)

DXB has got to be worth a bit as a hub for (non-O&G related) long haul given its location, but I've no idea what that contributes to the economy as a %.


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## Balla Boy (Jan 3, 2015)

Mr Rossi said:


> I know it's a presumption on this forum, but not all jobs outside of O&G or construction are done by "low paid workers from the sub continent"



Not my assumption at all - in fact the reverse. I'm talking about the people working for the banks, the big four audit firms, the strategy consultancies, the IT and systems integration firms etc etc etc.

And in turn the people teaching their kids at GEMS, the people who sell them beer in McGettigans etc. 

Oil makes up 80% of Government revenue in the UAE (or at least did in 2014). When 80% of Government revenue shrinks in price by 80%, the rest of the economy doesn't just tick along. 

Obviously the resiliance of the cash reserves will be important, and the time line to a hopefully higher oil price (though ceiling now seems to be $50-$60).

If those things don't pan out, we're not just talking about the economies of the GCC. Saudi Arabia will cease to function as a country inside a decade.


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## TallyHo (Aug 21, 2011)

Correct.

Pointing at the Fortune list of billionaires doesn't say much beyond the impressiveness of the individual billionaires. What's important to us is the economy of the UAE. 

All economies are heavily interlinked industries. In a normal, more balanced economy, when one sector goes down much of the losses can be absorbed by other sectors without too much overall loss to the economy. 

But in an economy like the UAE or Gulf economies that is heavily dependent on oil as the lifeblood underpinning the economy, when oil goes down, it drags down the rest of the economy with it. UAE government spending and Abu Dhabi have drastically cut government budgets, which hits the consultancies and contractors on just about everything from construction projects to education schemes and all the way down to small, seemingly non-oil related projects in IT. As demand dwindles, it impacts other sectors as well. A company with several government contracts cancelled will turn around and cancel their contracts to their own suppliers who can be anything from marketing/website consultants to procurements. 

The UAE won't collapse just like it didn't the last time. It's too large and too developed. Things will tick along. But on a reduced scale seems more likely till oil revenues go back up. The big question most of us face will be whether we're one of the lucky ones or the unlucky ones. Right now for many of us it's hard to see how the cards will fall in six months or a year's time. 



Balla Boy said:


> Not my assumption at all - in fact the reverse. I'm talking about the people working for the banks, the big four audit firms, the strategy consultancies, the IT and systems integration firms etc etc etc.
> 
> And in turn the people teaching their kids at GEMS, the people who sell them beer in McGettigans etc.
> 
> ...


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## Balla Boy (Jan 3, 2015)

TallyHo said:


> Correct.
> 
> Pointing at the Fortune list of billionaires doesn't say much beyond the impressiveness of the individual billionaires. What's important to us is the economy of the UAE.
> 
> ...



And that's exacerbated by the interdependence of the regional economies, and the fact that they all have similar drivers. So even if your business footprint is GCC, or even MENA, you'll see the same downturn right across the patch. 

Different businesses will respond differently. A major MNC can afford to take a hiding for 12-24 months if they believe a market will come back. An SME is a lot more exposed. 

The other problem, from an individual perspective, is a that a lot of people aren't set up here to weather a storm. With such high turnover, you have to be here some time before you can build up the sort of networks that will see you through a downturn. If you're in your first year/18 months and the business hits the wall, it's usually goodnight vienna. 

We're not cutting and running, but if this had been the picture 18 months ago I've no doubt I'd have turned down the offer to come out. It's going to be a long, tough year.


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## Mr Rossi (May 16, 2009)

TallyHo said:


> Pointing at the Fortune list of billionaires doesn't say much beyond the impressiveness of the individual billionaires


No, but it's a interesting tangent from your patronising drivel. I think most people get a low oil price has a knock on effect.

As for the other point, it depends on the individuals exposure. I think the bulk of folk have learnt from the airport exodus last time around and anyone arriving since won't have had the same lines of credit to get them into quite the same mess. 

I cant imagine companies offering the same terms they used to and clerks will be a lot less keen to put their name on company cheques.


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## OMGItIsPhil (Dec 19, 2013)

TallyHo said:


> I have noticed a general drop in the number of new posters moving to the UAE and asking questions on here.


Finally moving to Dubai this Saturday. Not working in O&G or RE, company's profits are up, on a watertight contract. Can't wait to dive into that rental market and negotiate like a motherf***er...


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## Fat Bhoy Tim (Feb 28, 2013)

Balla Boy said:


> If those things don't pan out, we're not just talking about the economies of the GCC. Saudi Arabia will cease to function as a country inside a decade.


Even with a re-budget, they're broke between mid-2018 and mid-2020 ... assuming they don't roll up all their energy subsidies, which they've started doing. Remove all of them and they could stretch it out 20 years.



Balla Boy said:


> And that's exacerbated by the interdependence of the regional economies, and the fact that they all have similar drivers. So even if your business footprint is GCC, or even MENA, you'll see the same downturn right across the patch.


Not as interdependence as you might think, in fact there's very little inter-GCC trade. They have similar crude price pressures on their federal budgets, but aside from that there's limited direct connection.


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## The Rascal (Aug 6, 2014)

OMGItIsPhil said:


> Can't wait to dive into that rental market and negotiate like a motherf***er...


Good luck with that...... The RE lot aren't generally the brightest buttons in the box, they'll walk away if you offer too little (in their view) - and that's if they turn up at all.


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## TallyHo (Aug 21, 2011)

Cool it mate, there's no need to be rude.



Mr Rossi said:


> No, but it's a interesting tangent from your patronising drivel. I think most people get a low oil price has a knock on effect.
> 
> As for the other point, it depends on the individuals exposure. I think the bulk of folk have learnt from the airport exodus last time around and anyone arriving since won't have had the same lines of credit to get them into quite the same mess.
> 
> I cant imagine companies offering the same terms they used to and clerks will be a lot less keen to put their name on company cheques.


Does anybody here work in personal banking and who can comment on the scenario surrounding levels of personal debts carried by a typical person in the UAE? I have a few friends in IT consulting, including owning their own shops, and they've all commented on the number of IT people who've fled the country recently, owing debts from their attempts to start up their own business.

Last year one of my juniors wanted to take out a personal loan of 30K to buy a car in cash. The bank turned down his application. Why? Because it wasn't large enough, their minimum loan amount was 50K. And after he took the loan he kept getting calls from the bank offering to top up the loan. 

I'm sure mechanisms were put in place following the last collapse to prevent widespread abuses of credit and loans, and while I respect your optimism and I'm also sure things won't be as bad as they were in 2009. But only time will tell.


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## The Rascal (Aug 6, 2014)

TallyHo said:


> Cool it mate, there's no need to be rude.
> 
> 
> 
> ...


I don't work in banking, however I do know that banks are pulling the plug on loans and especially overdrafts that small business have been living off, eg one guy i know owes, in loans and overdrafts AED16million, but has checks with the bank total AED25million (he's paid a good chunk off the original amount). They pulled all his banking facilities, he left the same day - and that was after 18 years of trading accounts and never been in arrears (so he says).

Banks are getting very nervous about the big ones, 50k is neither here nor there to them.


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## Fat Bhoy Tim (Feb 28, 2013)

The Rascal said:


> I don't work in banking, however I do know that banks are pulling the plug on loans and especially overdrafts that small business have been living off, eg one guy i know owes, in loans and overdrafts AED16million, but has checks with the bank total AED25million (he's paid a good chunk off the original amount). They pulled all his banking facilities, he left the same day - and that was after 18 years of trading accounts and never been in arrears (so he says).
> 
> Banks are getting very nervous about the big ones, 50k is neither here nor there to them.


Barclays restructuring middle east corporate operations and shedding jobs, Arab Bank recording massive losses, etc.


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## rsinner (Feb 3, 2009)

Fat Bhoy Tim said:


> Barclays restructuring middle east corporate operations and shedding jobs, Arab Bank recording massive losses, etc.


HSBC, FGB, Deutsche, SCB to add to the list. Obviously there are more.

Financial services is not the sector to be in at the moment in the region - on the flip side, if you are in the US right now in financial services, you will be raking in some serious moola.


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## LesFroggitts (Dec 30, 2013)

rsinner said:


> HSBC, FGB, Deutsche, SCB to add to the list. Obviously there are more.
> 
> Financial services is not the sector to be in at the moment in the region - on the flip side, if you are in the US right now in financial services, you will be raking in some serious moola.


Maybe there'll be a chance of a certain Metro Station reverting back to its more sensible original name.


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## telecompro (Apr 4, 2013)

Great thread - We also need to take into account the UAE VAT tax that would be defiantly implemented in 2018 which will have an impact onto the economy as well.


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## Fat Bhoy Tim (Feb 28, 2013)

LesFroggitts said:


> Maybe there'll be a chance of a certain Metro Station reverting back to its more sensible original name.


I can think of at least 2.


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## TallyHo (Aug 21, 2011)

The VAT is intriguing. The UAE government claims it will start at between 3-5% but who wants to bet it won't creep upwards over time? 

I don't claim to be knowledgeable on the full extent or impact of the VAT but if it means the cost of goods and services goes up, people will either switch to cheaper goods/services or drop them altogether. My guess is the former. Buh-buy luxury cars. 

VATs are usually meant to raise revenues for the government but the UAE government won't plow VAT revenues into the typical government funded programmes like state schools or health care (at least for expats, who are the clear majority of the population). So it seems like the VAT is going to be a genuine tax that won't be offset by increased or improved government benefits for the majority of the population, except perhaps more metro / bus routes and roads. 

In other words, life for expats will get more expensive. 



telecompro said:


> Great thread - We also need to take into account the UAE VAT tax that would be defiantly implemented in 2018 which will have an impact onto the economy as well.


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## QOFE (Apr 28, 2013)

The rents really have to come down. Who do they think will afford to pay these inflated rents if there are so many redundancies?
I had bookmarked some official stats pages but of course they have vanished (the pages, not bookmarks)
From what I can remember they had published salaries by various groups and I was surprised about the tiny minority actually earning proper salaries.
Abu Dhabi have been cracking down on illegal flat shares. Where do they expect people on small salaries to live then?
I wonder how many people have taken out loans to pay the ridiculous one cheque for the annual rent. 
Perhaps they should start with introducing a monthly rent payment system. That should decrease the need of taking out loans/getting into debt that so many people have to do here. 

The banks have been pushing out loans like candies the last years. Perhaps they shouldn't have had such tough sales targets and highly commission based roles done by workers without appropriate experience? Too many people treat credit cards and loans as "free money" without fully realising the cost of paying it all back with high interest rates.
What's the latest figure of private debt here? I suppose that's another hidden fact.


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## Mr Rossi (May 16, 2009)

TallyHo said:


> I don't claim to be knowledgeable on the full extent or impact of the VAT but if it means the cost of goods and services goes up, people will either switch to cheaper goods/services or drop them altogether. My guess is the former. Buh-buy luxury cars.


Mid range clothing and F&B will be affected the most. Luxury purchasers will be able to afford it while budget brands do well during hard times. As you point out, people switch to cheaper goods.

With logistics continually getting better people will increase to buy online too from other territories. 

Retailers that currently just rack clothes and over charge on the ticket price, will probably pass on VAT to the customer. They'll suffer the most. Ones that deploy various strategies should pull through but co-operation from the govt and mall owners on existing, restrictive practices could also do with being relaxed.

One worry in retail is the decrease in overall spend as sections of the population may not received their oil funded subsidies, decreasing their disposable income.


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## Fat Bhoy Tim (Feb 28, 2013)

QOFE said:


> The banks have been pushing out loans like candies the last years. Perhaps they shouldn't have had such tough sales targets and highly commission based roles done by workers without appropriate experience? Too many people treat credit cards and loans as "free money" without fully realising the cost of paying it all back with high interest rates.
> What's the latest figure of private debt here? I suppose that's another hidden fact.


When lendees start making stupid decisions: be worried

When lenders start making stupid decisions: be afraid


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## Stevesolar (Dec 21, 2012)

Hi,
VAT will obviously have an impact but the bigger impact will be when oil prices go back up again.
Before August, fuel prices were fairly steady - then we had a big increase for 1 month and a steady month on month decrease since (to below pre-August prices).
If oil prices double - then fuel prices are going to rocket upwards.
If they doubled - that would cost me another 600 AED per week on petrol, alone. Then factor in the increased costs of goods - due to increased delivery costs - and you could see another chunk of money at the supermarkets, shops, restaurants etc.
Funnily enough, I haven't seen a decrease in product costs - due to the decrease of fuel prices since September!!!
Cheers
Steve


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## spectnas (Dec 7, 2014)

A few things that happened since mid-2015:
1. A few international companies shifted their headquarters to Asia (China/India/Singapore)
2. Overall sales declines in FMCG across GCC
3. Large banks are going through improvements (less ppl and less branches). 
4. HSBC is in trouble since they service is absolutely bad compared to average in UAE. I have been banking with over 8yrs now and decided to close my accounts. It took over 3 visits to get it done since they want to drag their feet. During these 3 visits, I have seen people coming in and throwing cards to receptionist and even cursing about service. So that is a trend as well.
5. Construction is still booming and tons of new properties are on the market
6. School prices are increasing 6-10% in 2016-2017
7. New employment contracts are tighter across all industries with less benefits

And funny examples:
1. One property in Lakes: The landlord asked for 200k and agent advertised yet rented for 240k.
2. Another house in Lakes, on the same street as ours, was advertised by 3 different agent at the price of 200k, 230k and 240k. Same house and the agent rented for 230k.
3. In Springs, a friend offered 145k for a property which was advertised as 165k. And agency accepted the offer.

Overall, it feels like things are not super down but slowing down in a controlled and cautious way. However, this may affect the rental market hence the agents are artificially increasing the prices more than what landlords want. This is screwing everything.

When an agent rents the property for 200k vs 230k, they only get 1,500 AED more as agency. If they do this with 3 properties per month; they would be happy yet artificially uplift the rent market.

Overall, Dubai is number 1 tourist destination with world's busiest airport (as of end of 2014), and things will not significantly go down however it can slow down as it is across the globe.

I surely see a lot of expats leaving Meadows, Springs and Lakes area due to increase in cost of living. Even we are now considering that key services are continually increasing even at insignificant rates to begin with, but it all adds up.


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## The Rascal (Aug 6, 2014)

Whether this is true or another urban myth, however last week (allegedly) some "Asian" guys on the Metro were complaining that Dubai is Going Downhill/Going Bust/In Recession.

They were arrested under the "Dissing the UAE" Law, can't recall the proper name of it.

As mentioned, I don't know whether that's true or not, but just be aware out there folks.


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## twowheelsgood (Feb 21, 2013)

spectnas said:


> 5. Construction is still booming and tons of new properties are on the market


Construction schemes that have reached the actual digging stage are okay, but very little in the way of pipeline coming through. 



spectnas said:


> Overall, Dubai is number 1 tourist destination with world's busiest airport (as of end of 2014)


Busiest airport yes, but 80%+ are in transit and very few get off. The growth in passenger numbers is mainly in transit.

I'm not sure Dubai is the No1 destination for tourists - are you sure ?


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## Edino (Sep 22, 2013)

Stevesolar said:


> Hi,
> VAT will obviously have an impact but the bigger impact will be when oil prices go back up again.
> Before August, fuel prices were fairly steady - then we had a big increase for 1 month and a steady month on month decrease since (to below pre-August prices).
> If oil prices double - then fuel prices are going to rocket upwards.
> ...


....600aed on petrol alone.... Go and get the Prius!


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## Fat Bhoy Tim (Feb 28, 2013)

twowheelsgood said:


> Construction schemes that have reached the actual digging stage are okay, but very little in the way of pipeline coming through.
> 
> 
> 
> ...


A few years ago it was the #1 destination for British tourists on short breaks (less than 4 nights iirc), but not sure if it still is.


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## twowheelsgood (Feb 21, 2013)

Fat Bhoy Tim said:


> the #1 destination for British tourists on short breaks .


That I could believe but not the catch all #1 destination - half the year its too hot for sensible tourism and there's not much to do after on or two holidays here is there ?


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## Fat Bhoy Tim (Feb 28, 2013)

twowheelsgood said:


> That I could believe but not the catch all #1 destination - half the year its too hot for sensible tourism and there's not much to do after on or two holidays here is there ?


i.e. a lairy weekend


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## TallyHo (Aug 21, 2011)

Most people from the UK who come here for short breaks tend to be on their way elsewhere, India or Australia the top two destinations. I'd bet the vast majority of tourists are people here just for 1-2 days.


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## ownz (Jul 1, 2013)

I can feel it, salary delayed is happened frequently from my company now. so sad and bad..


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