- Title: UAE: Financial downfall cripples Dubai's once-booming construction industry
- Date: 8th January 2009
- Summary: DUBAI, UNITED ARAB EMIRATES (RECENT) (REUTERS) BUILDING AND CRANE VARIOUS OF MIGRANT WORKERS IN CONSTRUCTION SITE CONSTRUCTION SITE (SOUNDBITE) (English) UNIDENTIFIED MIGRANT WORKER, SAYING: "Money this (is used) for children to school, this for eating, anything. All this with money." SIGN READING "CITYSCAPE" OUTSIDE EXHIBITION HALL VARIOUS OF DELAYED PROJECT NAKHEEL TOWE
- Embargoed: 23rd January 2009 12:00
- Keywords:
- Topics: Industry
- Reuters ID: LVAAITTZANY1F929AZ2S3V5F80H4
- Story Text: The effects of the global financial meltdown combined with low oil prices has brought many ambitious construction projects in Dubai to a grinding halt and left many migrant workers worried about the future.
Dubai, a glitzy trade and tourism hub in the Middle East, has astonished many in the world with creative and hugely ambitious projects such as man-made islands and the world's tallest building.
But a hard-hitting economic slowdown mixed with low oil prices has slowed construction in the rapidly developing city, affecting the livelihood of many foreign labourers in the country. Some of the ambitious projects have been delayed whilst others have just been cancelled outright.
The Gulf has long been a prime destination for unskilled workers, many of whom spend hours braving immense heat on dusty construction sites, live in cramped labour camps in the desert and earn a modest wage.
Millions of labourers, mostly from South Asia, swarm over construction zones, building the city's world-famous landmarks such as the Burj Dubai, the tallest building in the world, and its seemingly endless high-rises.
In return, they make a wage that offers a better standard of living for families back home or a chance to put away savings.
"This (money) for children to school, this for eating, anything.
All this with money," said one migrant worker.
The World Bank predicts remittances, the lifeblood for millions in South Asia and the developing world, would fall this year as the financial crisis takes a toll. Global remittance flows stood at 283 billion U.S. dollars last year, up 7 percent from the year before.
But the fallout from the crisis -- lost jobs, slowing economic growth and cautious or curtailed expansion plans -- means fewer funds will be sent home.
The vice-president of research at Shuaa Capital Roy Cherry said more labourers can expect to face the axe.
"I think as we go forward if we see a higher rate of cancellations, and cancellations that are closer to home, closer to 2010, 2009, then we're going to start seeing also redundancies there (unskilled labour). Before, I mean six months ago, the mentality among the contractors and the environment we were living in was a labour-scarce environment. There was a shortage of labour and contractors were aggressive in trying to gain that labour, to train it, and bring it here. Today, they won't have to do that. Going forward, they might have to cut back on labour," he said.
But some labourers like Bitpo seemed unfazed by the threat of possible redundancy.
"I don't worry. Our company has work. I'm working, but if there is no work and they are sending (us) I'll go to another company, or another country also. No problem," he said.
Even before the financial crisis rattled Gulf Arab economies last fall, the world's biggest oil-exporting region faced a decline in crude prices that only became steeper by year-end.
Hatem Farah, the CEO and founder of an Engineering company acknowledged the difficulty of the financial situation but said some consequences may ultimately have a positive impact.
"Now the volume of work that was in Dubai in particular, it will shrink. I don't know, nobody can tell until now, we don't have statistics on how much the number of projects will be reduced. Now all of the workers which were oversupplied, they will have to go back. Maybe, this is also good for us because the workers whom are not good will go, but the workers who are good, everybody will keep them," he said.
And the prospects are not too bright as the UAE is poised for a more abrupt slowdown in economic growth, according to analysts, than its neighbours as job cuts batter demand in the property and service industries. - Copyright Holder: REUTERS
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