With the Middle East war crippling the tourism industry in Dubai, United Arab Emirates (UAE), foreign workers who have supported the city's economy are taking a direct hit to their livelihoods.
The situation in Dubai, long known as a haven for the world's billionaires, is deteriorating quickly. Major tourist venues such as five-star hotels, shopping malls, and beach bars remain quiet, and forecasts have emerged that major international events like Frieze Abu Dhabi cannot guarantee going ahead. There are also reports that foot traffic at Dubai International Airport, which once suffered a drone strike and a resulting fire, has fallen noticeably.
According to the Financial Times (FT), visitors to "The Dubai Mall," which attracts more than 100 million people annually, plunged sharply during the three weeks after the war broke out. The shopping center houses more than 1,200 stores, and at anchor tenant Bloomingdale's, visitors fell 45% from the same period a month earlier. At the nearby Mall of the Emirates, visitors to the Harvey Nichols store dropped 57%, with more than half the foot traffic disappearing.
As tourism, which accounts for 15% of the UAE's gross domestic product (GDP), declines, the damage is being passed directly to foreign workers. According to the International Labour Organization (ILO), there are about 8.7 million foreign workers living in the UAE, accounting for more than 80% of the total population. Most of them regularly remit pay to their home countries, and reduced income due to the war is pushing entire families into a livelihood crisis, critics said.
Corporations are turning to restructuring to cut expense. Mandy Couenberg, head of the Dubai hotel and food service recruitment agency Limitless, said, "The tourism industry is effectively at a standstill," adding, "Layoffs are happening, and many companies are lowering pay to save expense." Some hotels are moving furloughed staff into other roles, but that is seen as insufficient to stem the broader contraction in hiring.
With wage delays and cuts spreading, many workers are already facing hardship. A sales clerk from the Philippines told the New York Times (NYT) that immediately after the war, the person was placed on unpaid leave for a month, which was extended through June 1. Muhammad Faisal, a construction worker from Sri Lanka, said, "Overtime has disappeared, and my income has dropped sharply," adding, "I'm left to get by on lentils and rice."
Earlier last month, the international human rights group Human Rights Watch said in a report that migrant workers in the Gulf region are threatened by the war across all aspects of life and job security. Michael Page, deputy director for the Middle East and North Africa at Human Rights Watch, said, "This conflict has introduced new risks for migrant workers and exposed gaps in labor rights protections," adding, "Corporations should not pass the burden of war onto workers during an economic downturn."
Meanwhile, with the United States and Iran entering a two-week truce on the 7th, the possibility of an end to the war had emerged, but talks collapsed and tensions across the Middle East have flared again. Early this month, Abdullah bin Touq, UAE Minister of Economy and Tourism, signaled a comprehensive support plan for the institutional sector of tourism and moved to stabilize the situation by deferring payment of government fees such as the tourism tax for three months through a 1 billion dirham (about 401.7 billion won) corporations support package, but observers say recovery will be difficult if the war drags on.