Abu Dhabi employees in fix over losing Dubai life

Many sign temporary contracts & continue to live in Dubai

Precise figures for the number of Abu Dhabi government employees living outside the emirate have not been released, but analysts have estimated it at 15,000-20,000.

Precise figures for the number of Abu Dhabi government employees living outside the emirate have not been released, but analysts have estimated it at 15,000-20,000.

When American Stephen Perry lost his job at a bank in Dubai following the emirate's debt crisis in 2009, he was lucky to be hired by one of neighbouring Abu Dhabi's government firms.

He didn't move house, so it didn't disrupt his wife's job or the kids' schooling, despite the daily 130-km (80 mile) commute each way.

That was still better than the nearly 200kms he used to put up with in the United States, and he considered it a price worth paying to keep the liberal, cosmopolitan lifestyle in Dubai.

But now Perry is in a dilemma and might not be able to manage the commute after all.

Last September, Abu Dhabi, the capital of the United Arab Emirates, a federation of seven Gulf emirates, told state employees that if they lived outside its city limits they would not be eligible for housing allowance, which accounts for about a third of their salaries.

The government has said the new rule was aimed at cutting traffic and road accidents, a nod to the risk of commuting on the busy desert highway between Abu Dhabi and Dubai.

But analysts and industry experts say the policy is designed to help absorb a glut of new high-end homes in Abu Dhabi and revive state developers such as bailed-out Aldar.

"Many new units have come up in Abu Dhabi, reaching the peak of its development cycle. The move is to create new demand and make sure the vacancy rates don't reach high levels," said Matthew Green, research head at property consultancy CB Richard Ellis in Dubai.

The Abu Dhabi government declined to comment on the ruling's implications for the property market.

About 10,000 new houses are expected to hit the market by the end of the year, with a further 43,000 by the end of 2015.

With Dubai's property market still yet to fully recover from the crisis, Abu Dhabi's attempt to boost its own struggling real estate sector once again highlights the competition and shifting dynamics between the two sheikhdoms.

Oil-rich Abu Dhabi is keen to keep more of the wealth it generates, rather than having to support its flashy neighbour.

Dubai's passion for tall towers and fancy hotels landed the emirate with massive debts, forcing Abu Dhabi to step in with a $20 billion bailout.

Home to the world's largest shopping mall, the tallest building and a palm-shaped artificial island, Dubai, the Middle East's party capital, has a 90-percent expatriate population.

"Dubai has something for everyone, and for an expatriate like me it is home; I don't feel out of place.

"I think I am echoing the sentiments of many expatriates," said Sandra Haddad, a Lebanese national who works in Abu Dhabi's aviation sector.

While Abu Dhabi is trying to shake off its more staid image by hosting an annual Formula One race and developing branches of the Louvre and Guggenheim museums, Dubai remains a bigger draw for shoppers and tourists.

Dubai's restaurants, hotels and nightclubs have helped it stage a gradual recovery, in contrast to Abu Dhabi, which is still struggling to emerge from the crisis.

Lower rents, better schools and hospitals make Dubai more expat-friendly, and thousands commute from there to Abu Dhabi for work.

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Posted by: winston goldfinger

Abudhabi government has been very generous in handing out Housing Allowances to all expatriates. They pay over the market rate in terms of these allowances. The non- written verbal understanding being that this allowance will be filtered back into its own local economy.
Beyond this generous housing allowance you are free to do as you please with your salary

Posted by: david

@M.Mathew. The reasons that certain expats command high salaries is that they have the right qualifications and experience to get a job done and done properly without months of prevarification, dithering or underhand dealings. They are paid for their skills. They have no obligation at all to the host country as to what they do with their money, it is THEIRS, they earned it. On the basis of your argument they should also only fly with Etihad, only shop for food in Abu Dhabi, buy their fashion accessories in Abu Dhabi, spend all their weekends in Abu Dhabi, buy their cars in Abu Dhabi and send their children to Abu Dhabi schools and Universities! I understand why Abu Dhabi are enforcing this rule, I don't agree with it one bit but it's not my call. By the way, before you say anything, I DO live in Abu Dhabi, always have done and love it!

Posted by: Sushil


That's quite a BIG generalization. While proportionately a higher number of Asians may lack the qualities you mentioned there is certainly a HUGE number of Asian expats with equally good (or better) skill set, undermined due to their nationality which is what instigated Mr. Mathew's post.

Also, if AD wants its expats to spend in AD and not in a nearby country, it cannot be criticized for this. Every country does things that hurts other economies or citizens but benefits its own economy and citizens. A recent example would be the US which is rolling back its quantitative easing regardless of the pain that the developing markets are feeling. There are a number of countries who take similar steps to help their economy. The only thing I believe should have been done is enforcing this in a phased manner so that it makes easier for expats to make the transition.

Thank you,


Posted by: m.matthew

Western expats earn the highest salaries and get the maximum persks in AD and the GCC. It's therefore only a matter of courtesy and obligation that they should live in the emirate which gives them their bread and butter.

As for their complaints about or their dread of how "staid" the capital of the UAE is supposed to be, they should also realise that AD's rulers have been generous towards the whole country, and that they are accomodating and reasonable people.

If the lack of entertainment and flashy hot spots is the issue for expats who have to move to AD, then please remember that once upon a time, Dubai had a similar 'problem'.

Demand for such 'conveniences' in AD just hasn't been there until recently. So, let's wait and see.

Posted by: Ramesh

This effort by AD could directly ease the skyrocketing rents in Dubai. Bad news for some AD employees could become a good news for Dubai residents.

Posted by: Eddy

That can be solved by forcing people working in Dubai to live in Dubai and not Sharjah. That way not only will rents rise, traffic will also reduce and fuel wastage will be less. There is no point in people living in Sharjah and driving 50 km to Jebel Ali every day and back

Posted by: Mick

There is a much easier fix for all of this. Why not make AUH more appetising to live in. I could never live there. Regardless of a good grid road system that I wish DXB had, the buildings in the city are always filthy, the parking is deplorable (too much double parking with no consideration for people being blocked in), the driving in AUH...well, that's a WHOLE different topic. There doesn't need to be flashy nightclubs or a little Vegas area but to have expats "want" to live in AUH, perhaps a little more contribution to a social life that it has very little outlets for. Just very little to do. The main thoroughfares are littered with thousands of little dusty shops with rotting and sun-faded signs. It could use a face lift. Mind you, I have seen improvements in the past 5 years and Sheikh Zayed mosque is a beautiful sight and breathtaking when I first laid eyes on it but maybe more Emirati/Gulf Arab flavours in its architecture to make it stand alone in its character.

Posted by: Bemused

AUH is an airport, not a city or emirate. I may agree in large part with the sentiments, but not with the laziness of how it is expressed.

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