Labourers win 20% wage hike

Contractors in Dubai have raised wages of labourers by up to 20% following strikes this month over salaries linked to the declining dollar, the Middle East Economic Digest (MEED) reported on Friday.

"We assessed the rate of inflation and exchange rate fluctuations and took the decision to raise wages by 20% with immediate effect," one unnamed contractor was quoted as saying by MEED.

The United Arab Emirates dirham is pegged to the dollar, which has hit record lows against the euro and a basket of major currencies this month, reducing the amount of money labourers could send home.

Arabtec Holding, one of the contractors building the Burj Dubai project that includes the world's tallest skyscraper, reached a settlement last week after up to 35,000 workers protested for 10 days over wages.

It did not disclose the details of the settlement, which included a wage increase, but said it expected the settlement would increase its costs by 1%.

"After repeated calls for the government to impose a minimum wage, a group of contractors ... have decided to deal with the issue by agreeing to increase workers' wages to compensate for rising living costs and currency depreciation," MEED said.

South Asian labour, mainly from India and Pakistan, is the backbone of the construction industry in Dubai, the Arab world's commercial hub and one of seven emirates comprising the UAE federation.

UAE Central Bank Governor Sultan Nasser al-Suweidi said on Thursday the country is under mounting social and economic pressure to unshackle its dirham from the dollar to contain inflation, which hit a 19-year high of 9.3% last year.