Gulf cities to be 'ghost towns' this summer

Jun 30, 2009 at 07:28

Almost half respondents to new poll expect region's economy will slow dramatically as summer starts to sizzle.

Almost 50 percent of respondents to a new poll believe that business is going to fall sharply across the Gulf in the coming months as expatriates leave in droves, hit by a triple whammy of the financial crisis, summer slowdown and Ramadan.

In the poll, conducted on Maktoob Business, an overwhelming 48 percent of respondents think cities across the region are going to be "ghost towns" during July and August, while another 26 percent believe there will be a moderate drop in business activity.

Gulf residents traditionally take long summer holidays to escape soaring temperatures that stay above 40 degrees Celsius until the end of September, slowing business to a snail's pace.

However, this year those holiday makers will be joined by a throng of victims of the global financial crisis that, analysts believe, have been staying in their host countries until their children's school term finishes.

Because of the high percentage of expatriates in the region - accounting for more than 80 percent of the population in countries such as the UAE and Qatar - shifts in employment patterns have a significant impact on the total size and demographic of the population.

With the fallout of the financial crisis, the UAE’s population is expected to contract by 5.5 percent this year, with Dubai's expected to fall 17 percent, according to a March report by EFG-Hermes. The UAE government disputes the projections.

This year's summer slowdown will be exacerbated by the beginning of Ramadan at the end of August when usually the holy month starts much later in the year. Ramadan, a time of fasting in the Muslim world, is often marked by slower business activity and reduced working hours.

However, not all poll respondents expect such a marked slowdown. Fifteen percent believe any slowdown will be isolated, and that certain international cities, such as Dubai, Bahrain and Jeddah, no longer experience a slowdown during the summer or holy month.

A further 11 percent believe the summer slowdown is a thing of the past altogether. "Our business was no slower last summer. On the contrary, we kept on growing," agreed respondents.