Dubai, Population Outflow Intensifies Due to COVID-19... "70% of Companies at Risk of Closure Within 6 Months"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] In Dubai, United Arab Emirates (UAE), a survey revealed that 70% of companies could shut down within six months due to intensified population outflow caused by the COVID-19 pandemic. Given that the majority of the population in the UAE and other Middle Eastern countries consists of foreign workers, there are concerns that the intensified outflow of foreign laborers due to COVID-19 could lead to a collapse in overall production and consumption.

According to CNBC on the 21st (local time), the Dubai Chamber of Commerce selected 1,228 companies out of 245,000 companies in Dubai and conducted a survey targeting CEOs from the 16th to the 22nd of last month. The results showed that over 70% of companies expected to close within six months. Additionally, 27% responded that they expected to close as soon as the following month.

According to COVID-19 statistics from Johns Hopkins University in the United States, the cumulative confirmed cases in the UAE currently stand at 26,898, with 237 deaths. Compared to neighboring Middle Eastern countries such as Iran (129,341 cases), Saudi Arabia (65,077 cases), and Qatar (38,651 cases), the number is not very high. However, due to the UAE’s characteristic of having a population mostly composed of foreign workers, prolonged COVID-19 lockdown measures have intensified population outflow, further exacerbating the economic crisis.

The World Bank (WB) reported in 2017 that the total population of the UAE was approximately 9.4 million, of which only 1.08 million (11.48%) were nationals, while 8.32 million (88.52%) were expatriates. Among these, foreign workers from India (2.62 million), Pakistan (1.21 million), Bangladesh (700,000), and surrounding countries constitute the majority.

Due to the COVID-19 situation, construction sites and other workplaces have been closed for extended periods, and workers have begun returning to their home countries amid the threat of the virus, raising concerns about a rapid population decline in the UAE. It is already known that by early May, 150,000 Indian workers and 40,000 Pakistani workers, among many other foreign laborers, had left the UAE. Similarly, neighboring Middle Eastern countries such as Saudi Arabia and Jordan, where over 30% of the population consists of foreign workers, are also expected to face severe economic impacts due to rapid population decline alongside the drop in international oil prices.

This content was produced with the assistance of AI translation services.