Abu Dhabi no place for low income groups

The study, conducted by Abu Dhabi Chamber of Commerce and Industry (ADCCI), indicated that there has been a significant rise in the monthly expenditures of the UAE national families as well as expatriate families, due to rampant inflation, caused by euro-dollar differential, rise in fuel prices and other factors, as against their average monthly incomes.

This has created a gap which needs corrective measures by the government, so that socio-economic complications are avoided, the study has noted.

Abu Dhabi is characterised by its diversity and increasing economic base and non-dependence on a single source of revenue.

“The continuous price spiral, the constant increase in house rents, the uncontrollable prices of daily used commodities have forced families and individuals in the emirates to resort heavily to taking bank loans and seeking a way out at special assistance funds and welfare societies,” the study stated.

It said that this is highlighted by the increasing expenditure on consumer goods and services, whereby 87 per cent of UAE imports from Euroland are priced in euro.

About 92 per cent of the country’s exports earning comes in US dollars, at a time when the greenback value is fluctuating in the global markets, and as a result its parity differentials are creating complex fixations of imported goods and services.

“All these things are negatively reflecting on the consumption behaviour and trends, as well as on prices, while income levels of the majority remained unchanged,” said the study.

The expenditure of one family in Abu Dhabi emirate, UAE national or expatriate, constitutes about Dh16,943 compared to the family income which stands at Dh15,575, reflecting a gap of nine per cent. The total income of an expat family in 2004 was Dh9,890 against an expenditure of Dh10,866 in the year 2004 and these expenditure further escalated to Dh11,377 in year 2005.

In the year 2004 income of a UAE national family was Dh30,199 while its expenditure was Dh29,253 giving little respite. But during the current year the expenditure superseded the income level by Dh428.

The income of a UAE national family and of an expatriate family income, varies. The monthly expenditure for a UAE national family is estimated at Dh30,628 for the year 2005 comparing with Dh24,380 in year 2000, which shows that there was an increase in expenditure during 2000-2005 by 26 per cent.

The monthly expenditures are estimated at about Dh30,628 with the monthly income of a UAE family well above Dh30,199. There is an increase in expenditure of about one per cent of the monthly income for the year 2005. The expenditure decreased by three per cent against the monthly income for the year 2004 and in 2000, when the income was higher than expenditure by 19 per cent.

The monthly income of an expatriate family is estimated at Dh9,890 against the expenditure it incurred of Dh11,377 in 2005.

There is an increase in the monthly expenditure over the income by 15 per cent, whereas the monthly income in 2000 is estimated at Dh9,890.

In 2004, the expenditure increased by 10 per cent of the total family income, showing an increase in the expenditure over the income by 26 per cent during 2000 -2005.

About 70 per cent of families living in Abu Dhabi solely rely on salaries, as a source of income; while remaining 30 per cent have various sources such as agriculture, businesses, bank interests, dividends from bonds and shares, pensions, financial assistance from government and money transfers.

However, the level of monthly income varied among Abu Dhabi based national families, who have different sources of income which constitute 41 per cent of total income sources, making their average monthly income at estimated Dh30,199.

The earnings of an expatriate family comes from one source only — the salaries. This is a normal situation since a majority of expatriates in the emirate work against salaries, in both the public and private sectors. Remaining have other sources of income, but this group is indeed very small.

However, the total expatriate family’s monthly income is estimated at Dh9,759, while the average monthly income of both national and expatriate families is Dh15,575.

Meanwhile, the year 2004 witnessed a phenomenal rise in prices, and the current indices show its continuation in 2005 also.

For its needs, the UAE depends on imported goods, the percentage of which is as high as 85 per cent. Hence, prices are controlled by importers, external factors, economic situation and currency rates.

The ADCCI report has recommended increase in salaries of public and private sectors’ employees in a way which is compatible to the price hikes and rising inflation.

It calls for pro-active role of institutions responsible in monitoring markets and following up of prices of commodities; a periodical mechanism to explore the prices and inflation, and linking them to salaries in the private and public sectors.

It has also asked for encouraging citizens to diversify their incomes, through the active government support and adopting projects to enhance their sources of income; provision of accommodation for government and private sector employees; development of domestic industries and reduction of dependency on exports, in order to avoid fluctuations in currencies and their ill-effects on incomes; support and expansion of small and medium businesses and extend industrial loans; and emiratisation of the commercial sector and encouragement of nationals to engage in business.

FACTFILE

87 per cent of UAE imports from Euroland are priced in euro.

About 92 per cent of the country’s export earnings come in US dollars, parity differentials create complex fixation of imported goods and services.

Expenditure of a family in Abu Dhabi, national or expatriate, constitutes about Dh16,943 compared to a family income of Dh15,575, reflecting gap of nine per cent.

Total income of an expat family in 2004 was Dh9,890 against expenditure of Dh10,866 in 2004, which further escalated to Dh11,377 in 2005.

In 2004, income of a national family was Dh30,199 against an expenditure of Dh29,253, but in 2005, expenditure was higher than income by Dh428.

About 70 per cent of families solely rely on salaries, remaining 30 per cent have other sources like agriculture, business, bank interests, dividends, pensions, etc.

In 2004, expenditure increased by 10 per cent of the total family income, indicating increase in expenditure over income by 26 per cent during 2000-2005.