There was a buzz…..now its more like a rumble!! There is a general consensus that the recession is having a sustained impact on the Middle East region, which of course manifests itself in the behavior and attitudes of professionals living and working here. As we all know, the recession naturally leads to a dearth in liquidity, which is made very clear by the fact that so many residents in the region have limited their spending and are also leaving the shores.
Recently, I went through a study termed ‘Surviving the Recession’ that was conducted in the Middle Eastern countries to gauge consumers’ opinions on their struggles during the global economic recession, to understand the impact the recession has had on a personal level and how it has impacted consumer spending and savings. The study asked the respondents about their financial health both before and during the recession to ascertain how many professionals felt their financial position has changed.
Prior to the recession, 36% of all respondents felt they were better off than their peers, 39% felt they were the same, and 12% felt they were worse off. During the recession, respondents generally felt their position had worsened: only 25% of all respondents feel better off than their peers, 39% feel their financial position is the same as their peers, and 22% feel it is worse. In the UAE, the figures changed considerably. Before the recession, an overwhelming 41% of respondents felt financially better off than their peers, while only a quarter of respondents feel better off during the recession. When asked about the reason for this change in their financial health – almost half of respondents in the UAE – 48%, cited it was due to job loss, and 23% stated it was due to a salary cut. According to the study, job losses featured most strongly in the UAE, suggesting that redundancies have been much more widespread in the Emirates. The effects of the recession on financial health have also spilled over into respondents’ investments. 21% of all respondents expect to sell investments to support themselves or their families during the recession: this jumped up to 24% in the UAE.
The study also went on to elaborate that the most unaffected were respondents in Bahrain; 56% stated they do not foresee having to sell any assets, closely followed by Saudi Arabia and Algeria’s respondents, of whom, 48% each agreed their position would not reach a point where they had to sell.
Aside from cutting down on expenses, seeking employment in a different country is a popular option among all respondents during the recession; a quarter stated they have moved away. Physical health was also found to be an issue during the recession; 27% stated it has personally caused them health concerns or issues including stress, and 13% stated that a family member’s health had been affected.