Published on People Move

Dune bashing in Dubai...with a hawaladar!

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Dubai is a must for any one working on migration and remittances. One of the seven Emirates, but one that depends more on trade, finance and real estate than oil and gas, Dubai is a wonder in the desert. It has a large – perhaps the largest – migrant population relative to natives (no pun intended) in the world. If you ask me which is the most developed Indian city, I would say Dubai!


   Photo © Curt Carnemark / World Bank

For sure, Dubai has some of the best Indian food. (As an aside, London used to be the city with the best Indian food. I was there a couple of weeks ago, and was a bit disappointed with the Indian (actually Bangladeshi) restaurants. Perhaps the recent visa restriction on hiring cooks from other countries is beginning to have an impact!)

With all the photos in the media of migrants leaving Dubai (abandoning cars on the airport parking lot), I was forced to visit Dubai in April, and once more after that. The level of activity seemed to me as high as the skyscrapers, although the locals reported a slowing down in the pace of construction. I visited a few embassies and remittance service providers. Dubai is slowing, but only for a while, and not all sectors are affected the same way by the crisis. For example construction workers are more affected than hotel workers. Migrants from Kerala (India) and Bangladesh are more affected than those from Nepal and the Philippines. Pakistani drivers are also affected, not the least because rising house prices in Dubai has forced many of them to send their wives and children home. It occurred to me that this could be a reason for the surge in remittance flows to such separated families in South Asia.

Money transfer companies - many of which are also exchange houses and employers of registered hawaladars - were doing brisk business. Remittances to South Asia seemed to be booming.

A highlight of the Dubai trip was a ride to the desert. Sanket and I went dune bashing with a hawaladar/money transmitter friend!

As the Egyptian driver and his companion manuevered a 4X4 (tires deflated to increase traction) on the contours of the dunes, and the lilting Arabic music unfolded like the slopes ahead that were sometimes visible and sometimes not, I held on to the reinforced roof of the vehicle with all my strength. As the vehicle started sliding down a dune, sideways, at an angle of about 45 degrees, I was trying my best not to fall over my hawaladar friend sitting next to me. But it is precisely then - about 7:30 in the evening - that his cell phone rang. "Hello," he screamed, holding the cell phone in the right hand, while stretching his feet and left hand to stay in place. "A hundred thousand pounds? For tomorrow morning ten o’ clock? OK, no problem. Nine thirty? No, no way. Ten o clock then. Done. Thank you!"

While remittances to South Asia and East Asia have held up because of the Gulf Cooperation Council (GCC) money, there is a risk in the near-term that the slowdown in the construction sector in the GCC countries might slow remittance flows with a time lag, especially if the global crisis lasts longer than expected. Even a 7 or 10 percent fall in remittances can mean the difference between solvency and default in some countries that depend heavily on remittances and have an external financing gap.

In the long-term, however, migration to the GCC countries will continue to increase as these countries go about with their long-term infrastructure and housing development. I was told the UAE wanted to have 10 million people by 2010. They have about 5-6 million people now. They need a lot of migrants! This is good news for the labor sending countries of Asia and increasingly Africa.

Georges Collinet has just produced a podcast on dune bashing and remittances recounting this story.


Dilip Ratha

Lead Economist and Economic Adviser to the Vice President of Operations, Multilateral Investment Guarantee Agency, World Bank

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