x Abu Dhabi, UAEThursday 20 July 2017

Proof of life in the Emirates without the expat package

The expat package might be dead, but workers have their own ideas about how to make up the shoftfall, with many insisting that life in the Emirates remains worth it.

There was a time, apparently, when expatriate workers in the Gulf had a lifestyle pretty similar to that of colonial civil servants in the days of the Raj: beachside villas, all bills and expenses picked up by the employer, servants similarly paid for, even membership of beach and sports clubs included in the package.

Remember it? No, neither do I. By the time I arrived in the UAE four years ago now, that kind of cosseting was already a thing of the past. My original package was a tempting salary, with the golden words "tax-free" attached, and the promise of an attractive bonus at the end of my stint. But all the other items - essential living expenses, really - were expected to be met from that salary.

At a stimulating half-day forum in Dubai this week, a gathering of interested parties - bankers, employers and recruitment specialists, mainly - considered the proposition: is the expat package dead? And, if so, what can expat workers do to make up the shortfall between the days-in-the-sun lifestyle of before and the realities of the post-crisis environment?

The event, sponsored by HSBC and run by the communications company Gulf Intelligence, was an eye-opener on many levels. Not the least was that, despite all that has happened in the region, and in Dubai in particular, over the past couple of years, most expats are still extremely satisfied with their lifestyle in the emirate.

On a show of hands, nearly all the 100 or so people in the audience thought Dubai was the best place to live in the region, gainsaying a subsequent and rather more scientific survey that put Abu Dhabi in the top slot.

And in a "happiness survey", along the lines of what David Cameron, the British prime minister, wants to introduce in the UK, the vast majority were more than satisfied with their lives here, while a big chunk were "very happy".

The survey, conducted by a market research firm called Insight Discovery, showed that most people did not have what is normally defined as an expat package: a basic salary with housing allowance, schooling and relocation allowance.

Some 57 per cent did not enjoy such largesse, and the survey further showed that the expat package was a declining phenomenon: some 28 per cent of respondents had previously had one but had lost it in the recent past.

Some still enjoyed the package, but for many it was not what it used to be: some 41 per cent said it was less generous than before. The value of expat benefits has certainly not improved since the crisis hit in 2008.

Most also thought employers in the region were now more likely to hire single-status expats, without the need for expensive family-status provisions such as schooling and bigger housing.

What emerged from the forum was that the expat package was not dead but was certainly on the decline and was more likely to be provided by international rather than regional employers; and that individuals felt a greater sense of responsibility than before to make up for missing elements such as life insurance, pensions and schooling.

In the round-table discussions that followed, a variety of views emerged that gave some substance to the survey's findings. The participants, on the whole, were pretty content to swap "perks for cash" - to move from an all-embracing package to a salary-based one - as long as they had a wider choice about how to use the extra cash. More investment opportunities were required.

There was a general feeling that the banks and other financial service companies should do more in the way of making up the difference, with packages tailored more closely to expats' needs in the region. To be fair, the man from HSBC did point out that many of the services that expats were asking for were already available.

People were also insistent that they needed more statutory regulation to protect them, in the areas of pensions and gratuity provision, and property regulation in particular.

Given the problems in the property market in the past two years, you might have expected that expats would want no more to do with it, but the reverse was true. There was an overwhelming call for reform and modernisation of property laws, but also a desire for an expansion of the areas where expats can buy property.

"We don't want to be shunted off to some patch of desert miles from the city," was how one person expressed it.

The biggest surprise of all came when we discussed taxation. There was a general acceptance that some form of income tax was certain to be introduced in the UAE in the future, and a surprising reaction that this was not such a bad thing. Nobody said they would pack their bags the moment it was introduced. A level of taxation between 10 and 15 per cent was regarded as acceptable.

In exchange for giving up the tax-free lifestyle, expats want one thing that only the Government can provide: the right to long-term residency, regardless of employment. But that is a very thorny issue indeed.

fkane@thenational.ae