MIDDLE EAST MOLE: Ridiculous labour laws are hampering the Gulf's growth

If the more sensationalist headlines are to be believed, when the Dubai bubble burst two years ago, it made one hell of a mess. Unemployed expats fleeing in their hundreds simply dumped their cars at the airport, leaving behind a mountain of bad debt, while others (who did no more than write a rubber cheque) found themselves doing time.

Such events are certainly not the norm, nor do they apply to the vast majority of more well-heeled people in the financial sector. But what has been the trend for out-of-luck financial services professionals and what are the implications for our region?

It's not just redundancy that causes people problems. I know more than one Lebanese young gun committed to massive monthly repayments on 911 Turbo Cabs and rent on beach-side villas - in these instances the absence of a large bonus has sent some over the default edge, even if they haven't lost their jobs.

Life after redundancy

But if you are given marching orders by your boss, your visa is cancelled and you have just 30 days to find another job or you need to get out of the country. The former is still highly unlikely given the sheer volume of redundancies versus new jobs and the ever-more stringent recruitment policies of regional employers.

For the older professional, debts are often less of a concern, and it's simply a case of pulling the kids out of school, sending them and the wife home, packing the bags and waving goodbye.

It's different for the junior and mid-level guys, though. At one end of the spectrum, there has been the odd jail term for being unable to settle debt before leaving the country, usually due to a false hope of landing a new job quickly. Most pay their debts and pack their bags, and look for work back home to avoid the impunity of the GCC's treatment of the unemployed.

The international turn-off

This is not new, but these policies have long-term implications for the financial industry and the region as a whole. For a start, there's the perception of the GCC in the eyes of the international talent pool. It is no secret that prospective employees from the region are of dubious quality and have a poor ethic, which is why historically we have had to rely on 'importing' expats to do the value-add and intellectually-challenging jobs.

This is just a fact of life in frontier markets, especially those that historically have depended on commodities rather than home-grown industries to drive the economy. Importantly, it is something we have accepted but also still require in order to eventually have our own home-grown high calibre professionals.

However, the combination of similar pay packages to the West (rather than eye-popping tax free fortune makers), the lack of good career opportunities available to expat bankers - Gulf experience isn't a particularly valuable addition to a bankers' CV - and the personal risk following redundancy have meant that a move to the region is now seen as a last resort rather than a road to success by most financial services professionals.

Long-term implications

Ultimately, this will be detrimental to our economies. All societies thrive on cultural diversity, which can only flourish by welcoming and respecting those individuals who choose to make our region a home for them and their families. If anything, this is becoming more important in light of our progressively lower attractiveness as a place to live and work.

We live in a global economy, and have to accept that the Gulf is competing for an increasingly internationally mobile workforce against other frontier and emerging markets, where labour laws are not so punitive. It's time that we not only come up to par, but also excel if we are to have any chance of attracting this talent pool and, ultimately, creating a self-sufficient society we can be proud of.

Jamal Bahir (a pseudonym) is seasoned senior private equity and investment management industry veteran based in the Middle East and Europe. He is an advisor to several ruling and trading families from the Middle East, as well as select European governments and private equity funds, advising on their investment, financial and regional political strategy. The author may be reached on jamal.bahir@gmail.com.