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Gusher peters out for Egyptians in Persian Gulf

For decades Egyptians facing low wages and unemployment have migrated to the oil-rich Persian Gulf states to support relatives at home. But the economic downturn has reversed that flow.

August 13, 2009|Amro Hassan

CAIRO — The job that Ahmed Amin thought came with a lifetime warranty is gone.

Like millions of Egyptians over the decades, Amin left his native land to work in the Persian Gulf. In 2005, he was hired as a construction engineer in Dubai, the boisterous and glittering financial hub of the United Arab Emirates. But when the global financial crisis hit hard this year, skyscrapers stood unfinished and Amin was fired.

"The last four months have changed the face of my whole life. I had a job that I was more than content with. I was making plans for my and my kids' future and I simply thought it was going to last forever," said Amin, 29, who has returned to Cairo with his wife and two children. "Unfortunately, I was wrong."

At least 75,000 Egyptian expatriate workers have returned home from Saudi Arabia, Kuwait and other Persian Gulf countries since October, according to a report by the Egyptian Education, Training and Employment Observatory, which tracks how the worldwide downturn is affecting the job market.

Despite massive cash reserves, the gulf nations have felt the sting as oil prices dipped to less than $45 a barrel in January after reaching highs of more than $140. That has suppressed cash flows as well as downsized dreams.

Khaled Badrawi, an Egyptian business school graduate working in Kuwait, has not been laid off from his brokerage firm, but he feels increasingly uneasy.

"We go to work every day with the fear of getting sacked, but I will hang on until the final breath," said Badrawi, who was recently informed that he may have to quit or return to his firm's Cairo affiliate if things don't improve. "I have many financial commitments, like my children's education, car and apartment installments, which won't ever be fulfilled if I work in Egypt."

Working abroad has long been part of life's trajectory for many Egyptians. Facing low-paying jobs or unemployment at home, for decades many have worked abroad as laborers, taxi drivers, engineers or doctors, wiring money to their families or returning with it on occasional visits. Such sprawling middle-class neighborhoods as Heliopolis and Nasr City were largely built on paychecks earned in foreign lands, and many older Egyptians wax nostalgic over tea about their years navigating different cultures.

Egypt has an estimated 5 million workers abroad, including 1.5 million based in the gulf region. Remittances from those in the United States, Europe and the Persian Gulf are a key source of foreign currency for Egypt. Egyptians sent home $8.56 billion in remittances in the 2007-08 fiscal year, up from $6.32 billion a year earlier. But remittances in the third-quarter of fiscal year 2008-09 dropped 24% from the same period a year earlier.

"Business firms in the [Persian Gulf] always financed real estate projects using bank loans," said Sherif Kamal, an Egyptian building engineer forced to relocate from Dubai to Qatar. "They hired contracting companies to carry out those projects using the same loan money. Eventually, most people willing to invest in those newly built projects did that by taking out other loans.

"Now nearly all banks stopped lending to investors due to the crisis, and that was the main shock to the real estate system."

Many gulf firms have been "compelled to either reduce their working force or cut down salaries," Amin said. "They paid me 20% less than my original salary for two months before they told me they couldn't afford to keep me anymore. Now most of the Egyptians who are surviving this crisis are not making enough money to send back home."

For most of his four years in Dubai, Amin worked on building projects, watching the city's skyline grow crowded with steel and glass, and earning double what he would have made in Cairo. But now he's home and has yet to find a stable job. Making matters worse, Egypt's unemployment rate is officially 9.4% and is expected to rise to 10% -- though unofficial estimates put the actual rate much higher.

Amin said he used to get paid $5,445 a month, spending about $2,175 on living expenses and transferring the rest to Egypt. "But since my return, I could only find very limited working opportunities, and most of those would earn me less than half of what I got paid in Dubai."

Egyptians working in the gulf were once considered heroes by their friends and families. But many of those who left the country are returning disappointed and bitter.

"All my family and friends totally understand that I was let go because of the crisis," Amin said. "However, I was still so ashamed to return without fully achieving what I went there for. Now I need to start all over again."

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Hassan is in The Times' Cairo Bureau. Times staff writer Jeffrey Fleishman contributed to this report.

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