The recent Dubai Debt Debacle perhaps dispelled most doubts about the globalized nature of businesses and commercial world. It started with Dubai World asking for a six month delay in paying back its debt (to the tune of billions of dollars) and sent ripples through the global financial sector. The only silver lining was that the US markets were closed on Thursday for the Thanksgiving holiday, and some bit of sanity prevailed when markets opened on Friday.
While most analysts are looking at the 'cause' and reflecting on Dubai’s hi-flying culture of developing oasis and paradises in the desert, are we missing a link here: the role of Emiratisation in the crash?
During past decades, generations of young workers from South Aisan descended in Dubai and the Gulf states, lured by easy jobs, work-visas and promise of Petro Dollars. Yes, the majority of them were from the working class – laborers, carpenters, construction workers and the like – but many were also white-collar professionals: accountants, nurses, doctors, financial analysts, businessmen, managers and Software Professionals.
Many modern societies that attract immigrants, especially white collar professionals do so with the implicit (if not explicit) intent of paving the way for permanent residency and eventual naturalization. The US has its famous H1 and Green Card program, UK has its Tier-1 and HSMP program, Canada, Australia, Singapore and even Europe have their share of (liberal) immigration programs targeting working professes. Guest Workers are attracted by the prospect of earning in Dollars, Pounds, Euros etc and also by the prospect of permanent residency and eventual Naturalization (Citizenship) in their host country. This symbiotic relationship between Guest-workers-turned-immigrants vests them into the system and adopted societies though some may occasionally think of returning back to their native lands (Reverse Migration)The Gulf countries, Dubai included, on the other hand are perusing Emiratization, a movement by the governments to proactively employ its citizens in the public and private sectors to reduce its dependence on foreign workers. In principle, Emiratisation is not a bad idea; most nations and cultures promote opportunities for their Sons of the Soil (Ladies: I don’t intend to be sexist here). Remember the failed Immigration legislation debate in US last year when there was a proposal to legalize millions of undocumented workers? However, the restrictions on legal immigrants to western societies, especially after they land and get assimilated into the mainstream are minimal.
This is not the case with immigrants in the Gulf. Thanks to restrictions on life, liberty and pursuit of opportunities, attributable to Emiratization, many workers in Dubai and Gulf nations realize that there are few avenues to explore moving up the Maslow's hierarchy of needs
I guess the key word here is Esteem factor. When white collar immigrant workers and professionals in the Gulf interact with their cousins, friends and peers who migrated to other western nations, they realize that unlike in the west, they are unable to integrate into the mainstream of their adopted land. For instance, their kids may be able to go to good schools but will remain Indian or Pakistani. This unlike their cousins in the west who will be considered American (or Asian-American). This topic would require another blog or series of blogs, but you get the idea. Perhaps the reason scores of South Asian Immigrants migrate from Dubai to other western nations when opportunities arise (ref: recent debate in online forums on Dubai Debacle).
The point here is that unless the professionals are vested in the society, their contribution and is also going to be transient. To put it bluntly, the thinking is probably along the lines of "Why should I care about the long term interests of the business-government-society? I am just transient here in Gulf!
Cause and Effect? There are probably scores of Desis, South Asians working as advisers analysts and others in upper echelons of Dubai World and other financial institutions in the Gulf. Wonder if their ephemeral thinking of life in Dubai also permeated their decision making?
Links of interest
- My book review: Rigged: The True Story of an Ivy League Kid Who Changed the World of Oil, from Wall Street to Dubai
- Dubai tries to stem panic as financial crisis shakes investors around
- David Beckham and Brad Pitt among celebrities caught up in Dubai
- Bollywood worried over Dubai debt crisis
- The Geopolitics Of The Dubai Debt Crisis: Its Iran vs. The United States
- Dubais Debt Problems Cast Shadow Over Entire Region
- Expatriates speak of a changed Dubai
- Dubai World crisis bad for us: Kerala finance minister