Exodus of low-income expat families is likely

ABU DHABI - The country may well see an exodus of families with limited income in the coming years, if one were to go by the results of a survey conducted by the Abu Dhabi Chamber of Commerce and Industry (ADCCI).

By A Staff Reporter

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Published: Sun 17 Jul 2005, 12:13 AM

Last updated: Thu 2 Apr 2015, 7:43 PM

With prices of consumer goods rising astronomically despite the best efforts of the authorities, there are fears that the 'fringe' families may opt for leaving the country if the economic situation is not corrected, which, in the longer run, may lead to complex sociological problems, the survey warned.

The survey has linked the recent price rise phenomenon to various global as well as domestic factors which are beyond control, like rise in fuel prices which has had a severe impact on transportation cost of imported goods; the weakening of the US dollar against euro; and the increase in rents of residential as well as commercial premises. All these have had an impact on the overall economy, forcing traders and businessmen to pass on the additional input costs to consumers.

The increase in cost of living in the past one year, the survey results reveal, have eroded the saving capacity of the middle and lower income families. Feeling the pinch of the price hike, these families have been forced to look for alternatives to quality goods, and are generally more vulnerable now to shocks, both economically and socially.

Stating that inflation in the country had touched 4.5 per cent in 2004, the study said the government had tried its best to control the situation from escalating, adopting innovative methods so that the more weaker sections in society are shielded from the negative impact of price hike.

Apart from having an impact on savings in the country, the price hike also has repercussions on individuals, leading to psychological problems which in turn affect their productivity and output.

Since many vulnerable families from the middle and lower income groups have not been able to absorb the changing scenario where it is difficult to make both ends meet, it is quite likely they would have no option but to leave the country, the report warned, adding that there could be psychological and economic pressures on families and individuals who would exert more time in workplace to make both ends meet. This could lead to family problems, low productivity and delayed marriages or avoiding marriage because of the inability to bear financial obligations.

The survey attributed the increase in divorce rates to financial instability of families and inability of the breadwinner to cover expenses because of continuing high prices.

The results of the questionnaire showed that steps should be taken to curb the phenomenon of high prices through the enactment of legislation by the authorities concerned to correct the market and create consumer awareness through special campaigns and programmes.

Legislation, according to the survey, should also be enacted to monitor the market and create a balance which was necessary to enable the salaried class to cope.

It said encouragement should be given to local industries and the use of modern technology in the production process, and called for price caps and better mechanism to protect consumers against fraudulent practices. "There should be a balance between the interests of consumers and traders, and cooperative societies should be supported by giving them necessary facilities," the survey said.

The survey also recommended linking of salary scales to inflation rates to reduce the impact of inflation on living standards.

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