Working and Living in Dubai – Is all that glitters gold

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Dubai, the shining light of the Middle East, is going gangbusters. It has enjoyed two decades of rapid growth, going from a small desert city to a western society representation of the riches the Arab world has to offer. The economic growth has fueled strong demand for foreign workers and they have been coming in troves to this Desert oasis in the pursuit of (tax free) wealth and a pampered lifestyle. Of late there has been a strong influx of Americans drawn to the regions high paying jobs, as the US economy and employment slows. Most expat jobs come with perks like housing allowances, international schools for the kids and home help. However, like all things that look too good to be true there are also various drawbacks to living and working Dubai. Here I examine both sides of the argument – the pro-Dubai side and why the place may be over rated.

The best of both worlds

Here are some compelling reasons and examples of why Dubai is the place to work and live:

- Dubai’s rapid economic growth will continue to drive the country forward and reward those who with participate in the boom. As salaries in the western world stagnate or are eaten up by inflation, they are booming in Dubai. Best of all, the income is tax free.

- Brad Dennis, an accountant from Chicago, more than doubled his salary by leaving the country. He came to Dubai two years ago after being headhunted by a global firm. He now makes $250,000 a year and drives a Mercedes-Benz provided by his company. At night, he gets past the velvet rope at some of Dubai’s hottest clubs, each time accompanied by a different woman. Among the new expats is Mare Elston, who was one of the few Americans in Dubai 10 years ago but who left and returned again recently. She works as a specialist in communications and event planning, and while she wouldn’t reveal her salary, it’s likely she takes home at least twice what she would earn in a comparable job back home in the U.S.

- “Dubai has become a magnet for ambitious young people who want an environment where they can make a lot of money and also have fun,” says Kashif Arbab, a Briton of Pakistani origin who trades for equities firm Killik & Co. in Dubai. As Dubai’s profile in the grows and more Multinational companies open offices here—oil-industry-­services company Halliburton, for one, relocated its global headquarters from Texas to Dubai in 2007. In order to attract those professionals, firms in Dubai are paying top dollar. According to one C.E.O. of a major bank in Dubai, the average compensation package for an expat working at his bank is around $150,000, and he expects that number to grow in the coming years as competition for employees increases. In addition, firms typically give housing allowances of up to $10,000 per month to their top executives, in addition to transportation budgets of another $5,000 per month. Further sweetening the deal is the fact that none of that income is taxed in Dubai.

- A wide range of industries in Dubai are hiring, especially those being hardest hit in the U.S. and Europe. New sovereign wealth funds are being created, real estate companies are expanding, financial-services firms are sprouting like palm trees, international banks seem to be opening branches here almost daily, and the hospitality industry is growing exponentially. That means more midlevel and upper-management executives are needed in the United Arab Emirates, particularly in Dubai, which has been exploding at warp speed. “The region has a shortage of qualified executives,” says Patrick Satamian, head of Kraft Foods in the Middle East. “Companies are continually looking for talent.”

- There are miles of shopping malls with stores representing every major luxury brand. There are long waiting lists for Ferraris and Lamborghinis—even Gulfstream jets. There is nothing that you get in the western world, or Asian for that matter, which you cannot get in Dubai. From Starbucks coffee to the latest Indian fashions, it’s all available here.

- Dubai is the most moderate of the United Arab Emirates in terms of the way of life Western expats can enjoy. You can drink alcohol in your own homes and in some hotel bars and restaurants for example, women can work and most western oriented living and working zones are safe.

Everything that shines isn’t golden

Living in Dubai may not be as wonderful and glamorous, as many would have you believe. Here are some reasons why:

- Dubai’s 1.3-million person population is set to explode, with an anticipated doubling by the year 2010. As thousands of retirees, expatriates and holidaymakers pour into the country, many are eyeing the property market and its boom, wondering how anyone can actually afford to live in Dubai. If you think Los Angeles or New York are expensive, you should check out some of the real estate prices in Dubai, where $5 million plus properties are quite common.

- High salaries and rapid growth also mean a high cost of living. Even if you earn $10,000 p/month (with allowances), the cost of an average home (most are apartments) is $3000 – $4000 p/month. The only thing cheaper here is labor. Yes, you can have a maid – but a bag of washed lettuce will cost you almost $10. So living costs quickly eat up those big salaries and allowances. If you have a family, add on the high costs of schooling. Further, as there is not much else to do apart from travelling, dining out or shopping – entertainment costs are much higher than average.

- Some expats have commented that, Dubai will never feel like home – “It has spectacular beaches, but it is not the Gold Coast”, said an expat Australian. Some have said that living in Dubai is like a vacation to Los Vegas, that is good for only a few days before you get sick of it. A few miles out of Dubai is like going to a different world where “western society” rules no longer apply and you are back to strict Shariah laws. This can be a big culture shock for those not prepared and a timely reminder that this ain’t home.

- So many people have been attracted by high income, low tax job offers and the thought of living in a playground in the sun that there are overcrowding issues plaguing the emirate and causing some expats to regret their relocation. If you’re thinking of moving to live in the UAE, factor in that Dubai may be a great place to work but a terrible place to live. Some reports claim that the congestion in Dubai rivals that of Los Angeles or London during rush hour.

- You do not have the freedom of rights enjoyed in western countries. The government blocks all web sites that it deems “offensive” to the “religious, moral, and cultural values” of the UAE. Simple services like VOIP are banned – so no cheap internet phone calls back home.

- The weather – it is really hot in Summer! It can get as hot as 120 degrees (F) with nearly 100% humidity. Do not look to the wind for relief. This is the equivalent of pointing a hairdryer on full blast directly at your face. Pour fine moon dust-like sand over your head as you do this and you get the picture.

- Others complain life is too materialistic in Dubai. With shiny 7 star hotels, expensive cars and designer shops, its focus is on satisfying the more affluent population’s material needs. A lot of the working labour class are from neighbouring low cost Asian countries (Pakistan, India and Bangladesh) and live in “slums” with hardly any worker rights. People who move here from western countries are shocked when they see this dark underbelly of Dubai.

Conclusion:

So, there are certainly downsides to living in such a fast expanding community. But then you can negate at least some of these issues with the attractive (tax free) salaries many of those working in Dubai enjoy. I think it depends on who you are, what you want out of life and the elements of your family, work and social life that make you tick as to whether you see Dubai as an all work and no play location in which a high salary comes at a high cost, or whether you see Dubai as a fantastic party town where you can work hard, play harder and really get a lot out of life.

If you are looking at moving to Dubai then make sure you weigh the pro’s and con’s carefully like I have done in the list above. Right now it is enjoying a massive boom and is potrayed very positively in the media, but the winds of fortune can change quickly.

There are hundreds of websites and forums about Dubai that can give you much more insight into day to day living and working over there, but to really know the place you have to go there and experience it for yourself.

[Click here to see an update to this post - "Is Dubai still the place to be?", based on the recent global financial crisis]

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