Job Discussion Forums

[TABING]

http://www.fastcompany.com/magazine/138/exodus.html?page=0,0

[helenl]

I think the description of Dubai as a ghost town is an over exaggeration at best. Yes projects have been deferred or stopped and it is criminal how the GCC countries treat their expat labourers when the going gets tough (hey, its criminal how they treat them in the good economic times) but these articles, while they contain some truths are not a very accurate or complete picture of what's actually happening on the ground (except on how they treat the labourers - that's pretty accurate).

[tatsuo1]

Hi Helen,
What part of the article is not accurate? Did the journalist who wrote this article leave something out?

[MrScaramanga]

The article is obviously one-sided, but the information is accurate. If you've been to the parking lots at the Dubai airport in the last few months, you've noticed all those abandoned cars -- most of them real nice cars -- easily identified by the amount of dust covering them...

The Jumairah developments never did get live-in tenants and most of the apartment complexes there are like ghost towns. Sad really.

It is absolutely true that expats live in the UAE at the pleasure of Emiratis. Once they are no longer needed, the consequences on a family/individual's life can be devastating. As the article points out, once you're no longer employed, your residence visa is cancelled and, if you have debt of any kind, you must pay it back within 30 days or else... That is how long a person is allowed to stay in the country after the visa is cancelled, by law. That is also why many have chosen to quietly "escape" and fly home without cancelling their residence visas. What other alternative do they really have?

Some will undoubtedly say: "They should have known better than to invest in property there!" Or: "I never would have taken a loan/credit card there!" Well, good for you! But what if you have? Now what? Will you just say: "Told you so!" People were sold a dream, and they invested not knowing the consequences if anything went wrong. The UAE banks never informed its customers of what would happen if they defaulted on their payments. And customers never asked.

Laborers have unfortunately always been mistreated, pre- and post-economic crisis. Nothing new to them. It is the white collar expats who are now discovering some harsh realities about UAE law.

On the up side, rents have fallen! Yeah!
MrS

[MrScaramanga]

Oh, and I can certify that the sewerage story is 100% true, having lived in International City where the treatment plant is located! I can also verify the existence of the awful stench + yellowish smog that floats over IC on nights when the wind blows in from the sewerage treatment plant area...
MrS

[helenl]

So expats didn't know if they lost their jobs they would have only 30 days to pay back their credit cards/loans? None of them knew or knew of someone who had been terminated with little or no notice and had to leave the country? (yes, it happened even during the boom times). Where in the world is your job guaranteed let alone in a country where most of us are employed on limited contracts that aren't worth the paper they're written on legally? That alone should have raised some sort of internal "alarms".

Nor did they read the contracts they signed when taking the loan/credit card or making property investments? That's why the contracts and application forms specifically state, right above your signature (usually) that "I have read and understood the terms and conditions of this ....."

I know that the GCC is a "special case" in that legal recourse/redress is biased to the creditor, not the expat debtor, but isn't that part of being an informed consumer? Espcecially in a country of which you are not a citizen? Also, a lot of people got caught up in keeping up with the Jones'(or the Vargheses' or the "insert name/nationality of choice here).

Yes the banks made credit easy to get, goodness knows one can name several dozen Western/European countries' citizens who got caught up in that particular viciousness. That goes back to the governing bodies for these institutions - where were the regulations/regulators?

Sewage has also been an ongoing problem - for years. It was just never "close" to the "beautiful people" before.

So, are the highways in Dubai bereft of vehicles? No more traffic jams? No more hoards at the malls? That would be my idea of a ghost town. As for vacant apartment blocks - Sharjah had them for years during the boom times as the builders failed to take into account that they would need electricity and water hookups as opposed to now, actual people to occupy them.

So are the streets of Dubai empty with the GCC equivalent of tumbleweeds blowing along? Are the villas and condos on the Jumeirah Beach road abandoned? That's the major point of inconsistency I see with the stories cited on the website.

[MrScaramanga]

Helen, you are obviously very well informed and good for you! But most people (wrongly) assumed that they would be able to repay loans/credit cards if they moved away from the UAE. I have a credit card here and when I signed the agreement at the bank it didn't say anywhere that if I was fired I would have 30 days to repay whatever I owed. And I read before signing! Luckily I pay off my balance every month, but I must confess that I was totally unaware of UAE law before the sh*t started hitting the fan following the economic downturn.

The situation has had little effect on jobs in education and that makes it difficult for us to realize what has happened in other job sectors. And I take it you haven't noticed anything different lately? All is well...
MrS

[veiledsentiments]

Caveat Emptor... as true of buying a lifestyle as of buying anything. This was all so utterly predictable. Not the when, of course... if I could predict that, I could be wealthy. We human are basically a greedy lot and love a gamble, but this isn't a game one should play if one doesn't know the rules. And in a place like the Gulf where the rules are so opaque... yikes.

That is why I have advised against buying property since they first started selling to expats. One detail jumped out at me that I knew was going to come back and bite people... the fact that ownership of property didn't provide a visa giving you permission to stay. Not to mention that no proper re-sale market existed or seemed to be developing in a way to protect the buyers or sellers.

The same thing with credit cards. I have always advised against using local cards at all.... and to keep your cards from home to use ONLY for emergency. I always lived on a cash economy outside my own country... where I know the rules and the limitations. IMHO, the people who got in trouble financially and had to abscond in dark of night mostly caused their own financial problems. (just as thousands did in their home countries) One can't control the economy around you, but living within your means should be one's rule wherever you live.

BTW... it was common knowledge when I lived there... in the early 90s... that all loans and bills had to be paid before you left the country. That was why you had to provide your paid utility and phone bills and paid notes from the bank before you were checked out and got your final pay from your employer. (that was also true in Oman and Kuwait) The only part that came as a surprise to me was the whole debtor's prison situation. But, I guess it never came up that any teachers that I knew had got that far into debt that their final pay didn't clear it.

And MrS... now that you know what happens, have you cut up that credit card and paid it off? From this point on, there is no excuse for any professional expat to get in over their head. The poor unskilled labor pool is whole other story.

VS

[helenl]

Exactly VS, to leave the country and get all end of service payments you have to show proof of no liability from the bank, and electrical and water services etc. This is not a secret. Everyone knows it (except those who bury their heads in the sand - not difficult here I know).

It is not the bank's responsibility to tell you of these legal (national) obligations, it is the consumer's responsibility to be an informed consumer.

[MrScaramanga]

[veiledsentiments]

Glad to hear it MrS... Now I just hope that every new teacher avoids the credit cards and all of you with piled up debt start paying it off.

Pass the word everyone...

VS

[Never Ceased To Be Amazed]

VS, a question here. You have a nodding acquaintence with finance. What would be the danger of an adult who dutifully pays off his/her credit card balance every month (and has been following this responsible economic model for more that 20 years) considering that all things remain equal?

I've been thinking in getting the RAK bank card as it offers domestic and international discounts. Don't you think that if people use their credit responsibly that there's really no danger to them...even if they lose their job?

NCTBA

[veiledsentiments]

[johnslat]

Dear veiled sentiments,
Well, i did find this:

"Nearly 80 percent of American families have a credit card, and 44 percent of families carry a balance on their credit cards."

Of course, it's from the White House, so caveat emptor.


http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/

Regards,
John

[veiledsentiments]

Like I said... the sources were all over the place with the numbers, but that one looks ridiculously high. 66% of all credit cards pay their total balance every month?? Right... in their dreams...

Especially in the current economic market...

...but we digress into US economics here...

VS