Dubai, famed for its real estate and luxury hotels, has sought to promote itself as the world's leading real estate investment location.Properties in Dubai are now being bought by investment companies and individuals and benefit from low entry prices, high yields, generous mortgage offers and year round rental opportunities.
Dig a little deeper, however, and you will find in the heart of the UAE, an upsurge in labour strikes and riots in the construction industry as the thousands of migrant workers who are building this investors' paradise in the desert protest against low pay and harsh conditions.
This week has seen the latest in a series of strikes, with hundreds of labourers protesting in Sharjah. Indian, Afghan and Bangladeshi workers blocked a main road and began attacking police. After riot police were brought in from neighbouring cities, over 600 of the protesters were arrested.
The strikes - which are illegal in the UAE - are occurring against the backdrop of an unprecedented economic boom in the Gulf states since the Gulf War, due in large part to rising oil prices.
Jobs in Dubai are highly sought by workers from the Indian subcontinent, who are paid in the local currency, the dirham, which is pegged to the US dollar. As the dollar has depreciated in value, the real value of workers' salaries - which are regularly sent home to families in South Asia - has plummeted.
Two weeks ago, Sharjah police arrested 1,000 workers protesting low wages and their forced residence on their construction site in sub-standard housing.
The recent disturbances have been by workers from Dubai based Tiger Contracting, founded by a member of the ruling family, and a leading player in the real estate investment boom in Dubai. The basic pay rate for Tiger construction workers is approximately 800 dirhams per month ($230) - equivalent to about $7.50 a day. Tiger Contracting recently announced the opening of its new multi-million dollar Marine Residences - the tallest building in the Dubai Marina development (pictured). Three-bedroom apartments in the complex start at £765,000. The tower is dwarfed, however, by the Burj Dubai, which when finished will be the world's tallest building.
Other strikes and recent labour disturbances in the area have included:
- Around 200 workers of Bhatia Contracting held a sit-down protest in front of the Dubai Courts to demand a wage rise and to protest alleged unfair employment practices. The workers claim the company was deducting money from their wages as "water provision fee" and would not allow them holidays.
- Police were called this week to control 400 workers from an Ajman engineering company in a dispute over wages. Eye-witnesses report rioters attacking company buildings and vehicles.
- Around 1,500 striking labourers were involved in a riot which rocked Sharjah last month, during which they set fire to management offices, real estate and vehicles.
The enclosed video from Al-Jazeera highlights the experiences of low paid workers from the Indian subcontinent who are often charged up to two years' wages by local recruiters to find jobs in Dubai and other countries along the Gulf shores, where living conditions are poor and work-related accidents common.
For some, the pressure of the work and conditions proves too much. The Indian embassy in Dubai reported that in 2006, 109 Indian labourers committed suicide in the UAE. Figures for suicides among other nationals are not currently available.
For some, the pressure of the work and conditions proves too much. The Indian embassy in Dubai reported that in 2006, 109 Indian labourers committed suicide in the UAE. Figures for suicides among other nationals are not currently available.
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2 comments:
Hi atlanticwriter,
A few weeks ago you (or someone using your logname) left a comment on one of my blog diary posts:
"Thankfully house prices are heading back up again according to the latest figures published today.
Cheers!"
I was surprised at the time that somebody could be so optimistic about property investment, considering the unfolding credit crunch situation, unless you were just playing it for comedy? :-)
If not, I was wondering after HBOS's prediction of a 5% fall in UK house prices, and the IMF's prediction of a 10% fall in UK house prices, whether you might have a second response to the post as I would be particularly interested in where you think UK house prices are going to go in the next 12 months (as I know virtually nothing about property investment, except that it has a high risk/reward profile and high transaction costs)?
Here's the address of the article:
http://angloaustria.blogspot.com/2008/02/its-worse-than-that-darling.html
Hi Jack,
Sorry I couldn't find the specific post you mentioned and, yes, it was me who posted the comment.
My view, for what it's worth, is that sale prices of houses in the UK will fall by about 5% year on year during 2008 and will regain their pre-slump value by the end of the year or the early part of 2009.
The figures I was alluding to in my comment were from Right Move who say that sellers putting properties for sale in Feb of this year were asking more for them than they were in December or January. This does not mean, of course, that they will sell for those prices but they are an indicator that it is not entirely a buyer's market.
It's also worth remembering that the final sale prices that we see in the press are about two months behind the date the property actually completed. The headline prices we see houses selling for now were completed in February or March (and put on the market in November) when the economic news was all doom and gloom. In the same way, rising completion prices will not show on the figures till later on in the year or the start of next year.
My reasons for taking this view of house prices are as follows:
1. The supply of housing stock in the UK continues to lag seriously behind the demand of a growing population.
2. The credit crunch has not hit Britain in the same way as it has America. Its effects are more short term, in my view.
3. Recent moves by the bank of England to inject cash into the banking sector (£50 billion) will, I think, enable banks to lend more to house seekers, thus oiling the wheels of the property market. Much of the current slow down has been caused by buyers being unable to obtain mortgages at the last minute, not to a reduction in demand.
Thanks for reading and commenting!
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