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UAE’s middle class more financially secure than their Mideast counterparts

Saturday, May 12, 2012

Gulf News

Dubai People in the UAE are in a much better state financially than their counterparts in many parts of the Middle East and North Africa, where economic prospects remain grim.

Industry experts said the UAE’s middle class are able to earn and save more than most of the households in the region because living standards and job prospects in the country are better than in places like Egypt or Morocco.

The imposition of fuel subsidies and fewer taxes in the UAE, the availability of better employment opportunities, as well as the presence of better infrastructure and transport systems, have also made people feel a lot more positive.

“The economy in Dubai specifically is stable due to it becoming the ever increasingly major hub of the Middle East region. Many wealthy businessmen have moved to Dubai since the Arab Spring and have brought jobs for all levels with them,” Ewan Walton, principal at executive search firm Pederson and Partners, told Gulf News.

Steve Gregory, managing partner at Holborn Assets, added: “The UAE’s residents are better off than most, and part of the reason is the visa system. For expatriates, the old, unemployed and sick cannot stay here indefinitely. As a population, we are therefore significantly better off in our expectations, standards, hopes and aspirations.”

A study conducted by Booz and Company showed that many middle-class people in the Middle East and North Africa are not happy about their current economic prospects, as well as their personal finances. The global management consulting company, which surveyed about 1,450 middle-class people in Egypt, Saudi Arabia and Morocco, found that residents in the region are generally upbeat about the road ahead, but many people feel their living standards have not improved since their parents’ time.

Inflation

Among those who are not happy about they way they live, 53 per cent cited inflation as the chief concern, followed by a scarcity of jobs.

Many respondents (44 per cent) said they have to cut back on spending to stretch their income, with Moroccans leading the pack at 54 per cent. More than half are struggling to save money for their future needs. The trend is remarkably high in Saudi Arabia, where the majority of middle-class residents (58 per cent) expressed trouble saving money.

About 65 per cent admitted that they get by with only one income, while 57 per cent said they are able to meet their basic needs with little left over for extras. Only a few of them (34 per cent) can afford to pay for medical treatment.

spending

Food takes up major chunk of expenditure

Food inflation remains a major concern for residents in Arab countries. The middle class in Egypt, Morocco and Saudi Arabia spend most of their monthly household income (30 per cent) on food, beverages, tobacco and personal care, according to Booz and Company. While food accounts for the greatest spending, expenses on housing, education and footwear take up only 8 per cent, 7 per cent and 6 per cent of the monthly budget respectively, among middle-class Egyptians, Moroccans and Saudis.

— C.M.

By Cleofe Maceda?Senior Reporter

© Gulf News 2012. All rights reserved.

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