Making ends meet; the other frontlines

As uncertainty continues, financial responsibilities such as rent, school fees and sending money home become increasing worries for expats in the Gulf, who have been hit the hardest by the financial blows of the virus on multiple fronts.

What is the situation like right now, and what steps can residents take for some financial relief?

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Salaries

These are not ordinary times. Pre-Covid-19 Gulf economies were looking for ways to diversify and get out of an oil crisis corner. Airlines and tourism, for example, were cornerstones in those visions.

But 2020 has other plans, businesses took a hit with the spread the virus leading to a complete lockdown of daily life outside. Airlines are cutting salaries and laying off hundreds of employees. Governments have released relief packages to public and private sectors, but mostly geared towards businesses and own citizens, to deter companies from layoffs.

Qatar announced that it will cover salaries of both nationals and expats working in the private sector. The UAE has allowed private sector businesses to revise contracts with mutual agreement with expatriate employees in light of the new circumstances, to grant both paid and unpaid leave, and to temporarily or permanently reduce salaries.

For most foreigners working in the Gulf, sending money home falls under the top of the list of responsibilities. As the second and third biggest source of remittance in the world, Saudi Arabia and UAE have seen a decline in remittance during the last month, as job uncertainties grow.

Some measure to provide financial relief for residents include:

• Saudi Arabia postponed monthly installments on any outstanding loans for healthcare workers for three months. More here.
• UAE banks are offering repayment holidays, ATM charges-refund, and refund on canceled travel bookings. More here
• Bahrain revealed a stimulus package that will cover electricity and water bills for individuals and businesses for three months. More here.

Rent

Residents and business owners are in negotiations with their landlords to help lift some of the financial pressure. Experts say now is the time to go through your lease and invoke any “force majeure” clauses that require special amendments to the contract.

For residents

Private landlords in the UAE are waiving penalties for those who had to up and leave the country suddenly without given notice, some are also agreeing to smaller installments of monthly cheques instead of quarterly and yearly cheques.

In Saudi, more than 3000 buildings linked to the Ministry of Education will be used as alternate housing and shelters for workers living in overcrowded sites, to limit the spread of the virus.

“It’s very Obvious that Landlords need to be flexible with their tenants, I’ve seen More UAE landlords offer three-month rent-free incentives.” Fakhreddin Minooeifa, founder and chairman of a UAE real estate firm.

If you’re currently in the middle of negotiating your rent, here’s what the law says.

LinkedIn members also shared how their negotiations with landlords are going, and how they’re dealing with rent dues from their tenants here:

For businesses

As UAE malls turn off the lights, major developers are starting to waive rent for their retail tenants. Dubai-Holding-Meraas announced a Dh1 billion package to support their commercial tenants in different Dubai areas. Majid Al Futtaim in UAE, Edamah in Bahrain, and Doha Festival City in Qatar are among those waiving rent for retail tenants in their establishments during the lockdown.

However, as some industries get rent relief, such as food and beverages outlets which are being refunded 20% of their rent, some say the bigger strike on businesses will come from overhead expenses.

School fees

The back and forth between schools and parents is still going in some cases. Parents see the need for schools to refund and cut tuition fees while schools are suspended, school administrations say they need the money to pay teachers.

Some schools are reducing fees by up to 50% in the UAE, and/or offering special packages for families that have been impacted by Covid-19 economic aftermath. A new relief measure applied 20% of the third term fees as credit towards the first term of school year 2020-2021. Some universities are following suit with similar measures.

What happens to the teachers now?

From their side, schools are appealing to parents saying that tuition allows them to pay teachers’ salaries. Now that e-learning has been extended, costs have increased to carry out digital training for teachers and purchase e-learning platform licenses.

Resources:

Whether or not your job and salary are safe, here’s some advice from financial experts on how to manage your finances during this time.

If you are job searching in the UAE, two of the industries facing increasing demand are now hiring. See who’s hiring in healthcare and retail.

How are you managing your finances during this time? Got any tips for fellow expats in the Gulf? Share your thoughts in the comments below using #ThatExpatLife.