Covid-hit expats to return to UAE, thanks to government reforms

The UAE will see scores of expatriates returning due to recently announced reforms, a research institute has said. The impact of Covid-19 on expats leaving the country has not been as severe as estimated earlier at the peak of the pandemic, Oxford Economics said.

In May 2020, it had predicted that expat population in some Gulf countries could drop by as much as 10 per cent due to job losses.

The study foresees a quick rebound in population numbers in the UAE, Bahrain and Saudi Arabia.

“The UAE has been implementing reforms to encourage expat participation in the economy. So we expect a strong rebound as the recovery from the impact of the Covid-19 pandemic continues,” said Scott Livermore, chief economist at Oxford Economics Middle East.

The UAE has announced a number of initiatives such as extending the list of people eligible for 10-year Golden Visa and introduction of a retirement visa to attract foreign talent to the country.

In May, Oxford Economics had predicted that around 900,000 people from the UAE and 1.7 million in Saudi Arabia could be directly impacted by lockdowns in the GCC. Overall, employment across the GCC could fall by around 13 per cent, it was predicted.

As the UAE and other Gulf countries begin to roll out Covid-19 vaccines for mass use, this will boost confidence and expedite economic recovery, hence creating more jobs in the region.

Covid impact

“There has been much recent discussion about the impact of the Covid-19 pandemic on the expat population in the GCC, particularly whether it will lead to a large exodus. Our updated analysis suggests that the impact will be pronounced, albeit lower in most GCC countries than we estimated in May,” Oxford Economics said in its latest note.

“One reason for the lower estimate of expat exodus is that some of the main economies ... seem to have performed more robustly than expected. In addition, the impact on jobs of the declines in non-oil GDP has been smaller than anticipated. And finally, travel restrictions and the use of furlough or unpaid leave have weakened the link between expats losing their jobs and returning to their home country,” said Livermore.

Since the summer, Oxford Economics said, the impact on the GCC economies and labour markets seems to have become more differentiated across the region and this is likely to also be reflected in the expat exodus. Given the dependence on expats in the GCC, this will have “significant impacts” on total population, it said.

The decline in Saudi expat jobs has been much less than anticipated at 3.8 per cent, excluding domestic workers who account for 55 per cent of expat workers.

Similarly, the impact in Bahrain is probably smaller than expected, given an expat employment decline estimated at 4 per cent in Q2.

waheedabbas@khaleejtimes.com

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