Oil price crash threatens Qatar economy and expat jobs

Published:  16 Sep at 6 PM
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Tagged: USA, Jobs, Euro
The effects of last year’s dramatic fall in energy prices are now threatening to change the face of Qatar and the lives of both locals and expat workers.

Qatar’s formerly thriving economy relied on its position as the world’s largest exporter of liquefied natural gas until lower oil prices kicked in due to a surplus of the ‘black gold’. The emirate has attempted to boost its revenues by increasing utility bills and severely restricting spending, but the inflationary effects of this strategy are now being felt across the entire economy.

From major international companies to local small businesses, the pinch is being felt and is reflected in closures, shortening or terminating of contracts, salary freezes and sweeping cuts in both private and public company budgets. Expats form the bulk of the emirate’s population and many are leaving for fresh fields and pastures new, taking with them their purchasing power.

The situation is expected to widen the gulf between wealthy Qataris and the Asian blue-collar workers at the bottom of the heap. In addition, the many businesses aimed at the tax-free salaries of expat professionals are expected to struggle to keep going. International schools, new car dealerships, luxury shopping malls and upscale restaurants may be forced to downsize or even close.

Expat professions in the emirate come mainly from Europe and the USA, and include lawyers, consultants, engineers and other experts. According to Reuters news agency, job cuts are now widespread and include white collar workers, with tens of thousands losing their jobs over the past two years. Amazingly, the tiny country once famous for its massive wealth per capita is now running a $13 billion dollar deficit in its economy.

One indication of the emerging demographic crisis is that the only construction work now
taking place involves a number of huge, luxury malls catering for the fabulously wealthy Qatari elite. At least a dozen of these ultra-upmarket shopping centres are being built, although several have now delayed their opening dates and others are slashing rents to attract tenants.

At the same time, the expat exodus is a bonus business opportunity for Doha’s second- hand car dealers. The lucrative trade involves buying luxury cars from expats in a hurry to leave and shipping them almost immediately to Asian markets. Nearly-new Mercedes, Porsches, Bentleys and other luxury toys for the boys are proving extremely popular in Asia’s developing economies.
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