Weak dirham at root of labour unrest

Abu Dhabi's Al Jaber Group is losing "a lot of money" as the dollar-pegged dirham declines against the world's major currencies and is concerned about possible labour unrest, the chief operating officer said.

"We are losing a lot of money," Fatima al-Jaber said on Sunday. "The dirham is very weak."

Al Jaber, which employs about 30,000 construction workers, is pressing the Abu Dhabi government to help it stave off disquiet as the declining dollar makes it more expensive for workers to buy currencies such as the Indian rupee in which they save.

"It is concerning," Jaber said at an investment conference in Abu Dhabi organised by London-based Middle East Economic Digest, when asked about labour unrest in neighbouring Dubai. "You need to tackle this very seriously," she said.

Jaber, with businesses ranging from contracting to industry, is pressing the Abu Dhabi government to provide land to build permanent workers' homes, she said. The government owns most land in the emirate.

Central Bank Governor Sultan Nasser al-Suweidi told Reuters last week the UAE was under mounting social and economic pressure to unshackle its dirham from the tumbling dollar and track a currency basket including the euro to contain inflation.

"Communities and companies" were pressing for change, he said.

The dollar's slide is hurting most expatriate workers in the United Arab Emirates, where foreigners make up about 80 percent of the population.

Migrant construction workers downed tools and rioted in Dubai this month to demand a pay hike to make up for lost savings. They only returned to work after their employer, Arabtec Holding, agreed to a pay hike for up to 35,000 strikers.

Arabtec, the largest United Arab Emirates construction firm by market value, declined to say how much more it would pay.

Contractors had agreed to pay as much as 20 percent more after the strikes, the Middle East Economic Digest reported on Friday. (Reuters)

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