DUBAI // Dawn Petrella surveys the debris of her life, dismantled, bubble-wrapped and packed into dozens of neat cardboard boxes.
"When I moved here, the sky was the limit," she says. "What a difference a year makes."
As she carefully stows decorations, books and odds and ends - soon to be unpacked more than 12,000 kilometres away in her native Florida - and desperately tries to sell unwanted furniture, she reflects on the enormity of a move she did not anticipate making this soon.
Ms Petrella is not alone. Like thousands of other parents, she moved to the UAE in a spirit of optimism, at a time when the economy and industry were still booming.
But like numerous other expatriates with families she is part of an exodus of people - no one knows exactly how many since there are no official figures - leaving behind their lives in the sun this summer because of the credit crunch, which has triggered waves of job cuts.
Only the importance of allowing their children to finish the school year has kept them here until now - but with term officially over, the coming weeks will see thousands packing their bags for good.
Ms Petrella, 49, was supposed to leave the Emirates in December to return to the US headquarters of her marine engineering firm when it first felt the financial pinch. Instead, she hung on so her 17-year-old daughter Monica could complete her year at Emirates International School.
Although her firm, US-based Applied Technology and Management, has laid off roughly half its 25-strong Dubai workforce, many of the employees with families were given leeway to see out the school year or offered loans to help cover their rent until the summer.
Ms Petrella, the firm's chief financial officer, moved to Dubai in August last year, expecting to stay at least a year to help set up the company's operation in a country where marina development was flourishing.
By December, circumstances had changed dramatically. "We made a decision because of the collapse of the economy and the expense of being in Dubai that it would be best to go back home," she says.
"When I took office, the sky was the limit and Dubai was the important place to be. We could not hire people fast enough.
"Now we have lost more than half our workforce, including people who had children in schools. It is so disruptive taking them out of school in the middle of a year that many have waited until now.
"I would have left sooner, probably in December, but waited another six months so Monica could finish her year."
The exodus has left her company with another problem: how to off-load the rented apartments and furniture provided for its staff.
While Ms Petrella was able to negotiate a Dh42,000 (US$11,430) discount on her Dh350,000 four-bedroom apartment in Dubai Marina in March, at least two of the paid-for company apartments, vacated by staff who were made redundant, are sitting empty because alternative tenants cannot be found.
And the executive's attempts to get rid of her unwanted furniture before she leaves the country on Monday have failed miserably.
"Because everyone is leaving and no one is coming in, I am going to end up donating my furniture to the church," she says. "My company paid for furniture but because no one is replacing us, we need to get rid of it. Since advertising it, I have had one phone call from a person who did not show up.
"In one of the company apartments, I have got furniture worth Dh30,000 and custom-made drapery worth Dh9,000. I have them marked at 50 per cent off but I am just not selling it."
The UAE has been bracing itself for a significant fall in population. A report from the investment bank UBS said up to eight per cent of Dubai residents could leave this year.
The Pakistani Embassy said up to 30,000 nationals were thought to have returned to their homeland, mainly labourers made redundant by the stalling of construction projects, while one travel firm, Alpha Travel and Tours, said it had made 3,000 one-way bookings to India and Pakistan.
Meanwhile, the Philippines Business Group in Dubai reported that up to 4,000 of the 320,000 Filipinos in the UAE had left.
Elias Sayah, the vice president of the American Business Group in Abu Dhabi, said he knew of 200 families who were planning to leave once schools closed.
"They had their contracts terminated and decided to leave but wanted to limit the disruption to their children," he said.
"Some are leaving on the same day as schools close. Another factor is the increase in the cost of living. It is making the UAE a less attractive place to live."
Some schools, such as the Universal American School and The Philippine School in Dubai, as well as Deira International School, have seen up to one in 10 pupils leaving.
Others reported "better than expected" new registrations - but warned it may not become apparent until September how many will actually take them up as a negligible deposit of Dh500 is enough to reserve a place until then under rules set down by the Knowledge and Human Development Authority.
When Shahenda Abdelbar, 40, and her husband Zhia Ghanem, 47, lost their jobs they did everything in their power to remain in Dubai to minimise the disruption to their children's education.
Shortly after Ms Abdelbar lost her post as head of human resources and training at Empost last October, her husband's property company collapsed.
They went from earning Dh30,000 each a month to having to live off their savings. As they hunted for new jobs, Ms Abdelbar was even forced to sell her gold wedding jewellery for Dh15,000 and a Dh22,000 Volkswagen Golf bought four years earlier, for just Dh3,000.
"It has been very stressful," said the mother of two, who waited until her son Shazi, 11, and daughter Sarah, nine, finished their school term before returning to her native Tunisia last month, after 18 years in Dubai.
"We did not want to disrupt their education, plus we had paid each of their Dh33,000 annual school fees and our Dh75,000 rent until the summer. We would have lost that money if we left earlier."
* Additional reporting by Tom Spender and Charlie Hamilton
tyaqoob@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Tailors and retailers miss out on back-to-school rush
Tailors and retailers across the city said it was an ominous start to what is usually a busy season for sales.
With many parents opting to continue home learning for their children, the usual rush to buy school uniforms was muted this year.
“So far we have taken about 70 to 80 orders for items like shirts and trousers,” said Vikram Attrai, manager at Stallion Bespoke Tailors in Dubai.
“Last year in the same period we had about 200 orders and lots of demand.
“We custom fit uniform pieces and use materials such as cotton, wool and cashmere.
“Depending on size, a white shirt with logo is priced at about Dh100 to Dh150 and shorts, trousers, skirts and dresses cost between Dh150 to Dh250 a piece.”
A spokesman for Threads, a uniform shop based in Times Square Centre Dubai, said customer footfall had slowed down dramatically over the past few months.
“Now parents have the option to keep children doing online learning they don’t need uniforms so it has quietened down.”
Fourth Arab Economic and Social Development Summit
As he spoke, Mr Aboul Gheit repeatedly referred to the need to tackle issues affecting the welfare of people across the region both in terms of preventing conflict and in pushing development.
Lebanon is scheduled to host the fourth Arab Economic and Social Development Summit in January that will see regional leaders gather to tackle the challenges facing the Middle East. The last such summit was held in 2013. Assistant Secretary-General Hossam Zaki told The National that the Beirut Summit “will be an opportunity for Arab leaders to discuss solely economic and social issues, the conference will not focus on political concerns such as Palestine, Syria or Libya". He added that its slogan will be “the individual is at the heart of development”, adding that it will focus on all elements of human capital.
Friday's schedule at the Etihad Airways Abu Dhabi Grand Prix
GP3 qualifying, 10:15am
Formula 2, practice 11:30am
Formula 1, first practice, 1pm
GP3 qualifying session, 3.10pm
Formula 1 second practice, 5pm
Formula 2 qualifying, 7pm
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
