Business | Economy

Gulf loses Dh21.3b in GDP due to reduced work hours

One week's economic productivity lost during Ramadan, new study says

  • By Derek Baldwin, Senior Reporter
  • Published: 00:00 August 30, 2011
  • Gulf News

Gulf loses Dh21.3b in GDP due to reduced work hours
  • Image Credit: Ahmed Ramzan/Gulf News
  • A majority of respondents in the new study believe their companies were holding up well despite fewer hours logged by employees.
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Dubai: The UAE loses an estimated $1.4 billion (Dh5.14 billion) in gross domestic product (GDP) due to reduced daily work hours during Ramadan, suggests a new study.

In the Gulf region, only Saudi Arabia loses more in terms of productivity during Ramadan at $2.4 billion (Dh8.81 billion), states the report, Productivity in Ramadan, Strategies for the Modern Muslim Work Environment.

Conducted by UK-based firm Productive Muslim in partnership with New York-based Muslim business media firm Dinar Standard, the study found that countries in the region which mandate a six-hour working day during Ramadan witnessed falling productivity.

Overall, the six GCC countries lost a combined $5.8 billion (Dh21.3 billion) in GDP due to reduced work hours. Estimates are based upon the last recorded annual GDP per country.

Mohammad Faris, founder and CEO of Productive Muslim, told Gulf News yesterday that the survey is believed to be the first of its kind and may help workers and businesses find a better balance between personal and professional life during Ramadan.

"I believe the most important lesson learnt is that on an individual level Muslim workers are keen to maintain their productivity throughout Ramadan, however, employers and governments need to play a bigger role in helping the individual Muslim worker maintain productivity," he said.

"For those countries who average two-hour workday reduction (GCC, Pakistan, Egypt), the total hours lost are approximately 40, which is essentially equivalent to one week of economic productivity. Percentage-wise, this averages to a 7.7 per cent loss in such a country's monthly GDP value," the study stated. "This assessment does not consider end of Ramadan Eid holidays."

The study, based upon 1,524 Muslims surveyed around the globe, said that loss of productivity was not due to a lack of performance by workers who were observing Ramadan.

The survey reported that 77 per cent of Muslim professionals said they make every attempt to maintain the same level of workload during Ramadan as they do during any other time of the year and believe work should continue in a normal fashion.

Ajit Karnik, professor of economics at Middlesex University Dubai, told Gulf News yesterday that gauging the economic impact of larger events isn't black and white and said the new report's figures should be viewed as only estimates.

Karnik said that "one has to take a slightly broader view. It has been observed that sales of products and services — such as hospitality and travel — rise during the festival period. So, the counter-factually estimated loss has to be set off against the actual increase in sales [above the normal trend] that occurs during this period.

"Note that such increases in sales are observed all over the world — during Christmas, during Diwali in India, during Thanksgiving. Many production units, in anticipation of this increase, have already increased their production in the preceding months. This must count towards an economic benefit."

Simon Williams, chief economist Middle East and North Africa HSBC, told Gulf News that reduced work hours lead to fewer hours logged, leading to the potential for some businesses to witness reduced productivity.

"It's inevitable, the loss of productivity due to the fast and other factors as well," Williams said.

However, Williams also noted that there are increased spending patterns during Ramadan similar to holidays in other countries where worker productivity might decline slightly, but revenues increase.

Flexibility

Faris, meanwhile, said "this is the first time we did this survey and the first time a survey of this nature was done on a global scale."

He pointed out that countries belonging to the OIC (Organisation of Islamic Conference), including the UAE, enjoyed workplace flexibility with reduced work hours.

"Seven per cent of our respondents were from the UAE, hence the analysis of their responses was aggregated at OIC level with other Muslim-majority countries. Many of the OIC-based Muslim workers were satisfied with their employers' flexibility during Ramadan compared to non-OIC based employees," said Faris.

"However, the real question that we pose in the report is to the OIC member governments whom we ask to consider whether a two-hour reduction is necessary or shall they consider a one-hour adjustment."

Rafi Al Din Shikoh, report author and managing director of Dinar Standard, said the survey gives a unique glimpse into the minds and hearts of Muslims around the world.

"For the first time, we have an actual pulse of what Muslim professionals expect and struggle with during Ramadan. These are strong insights that can help employers not only build goodwill with their Muslim employees, but directly and positively affect their companies' productivity," Shikoh said.

Asked if reduced hours affected productivity, the majority of respondents believed their companies were holding up well despite less hours logged by employees. "While a majority of [61 per cent] or respondents from OIC countries said their company's productivity does not suffer, a sizeable 26 per cent said their company's productivity unnecessarily suffers.

This should be a cause for companies to evaluate their practices and policies," the report recommended.

By comparison, only three per cent of respondents "answered that nobody works during Ramadan" while a further 15 per cent said that "work should not be a priority during Ramadan."

The study said that "the reality is that there are added spiritual activities that Muslims undertake during Ramadan (such as attending Taraweeh prayers [52 per cent]) and physical energy levels are low."

Comments (35)

  1. Added 17:54 August 30, 2011

    This kind of statement is baseless and infact Islam Encourage employer to lessen the burden of the employee during the month of Ramadan and by doing so, promised numerous rewards in this world and as well as in life after death

    Mohammed Ebrahim , Muscat , Oman

  2. Added 17:25 August 30, 2011

    There is No head or tail for these articles, based on some persons comments that too without proper study articles had been draft. If you want to study go door to door and ask the result.

    Jailani Mohtisham, Dubai, United Arab Emirates

  3. Added 17:20 August 30, 2011

    This is totally a baseless and useless report. The month of August got 23 working days and out of this if we take 2 hours out everyday it's 46 hours or 6 days only. So the research was carried out and is showed as big loss of money in the 6 days. The point where these experts are missing 1. Rise in sale of grocery all over the Muslim countries. If you see the statistics, this month earns the highest revenue for foodstuff sale. 2. Ask any expert who got expertise on the work behaviour of workers in any organisation. None works whole 8 hours. Generally an employee works 6 to 7 hours in any normal working day. 3. Please check the working habits of the people fasting, during the days of fasting, people are not spending the whole 6 hours of their time in work. As its a religious obligation to give back what is paid, every Muslim employee tries to give back 100% effort of the 6 hours. 4. In some countries Europe during Christmas and New Year time, or in India during major Hindu festival there is a total holidays of 10 to 12 days on average. I am not talking about 2 hours, I am talking about continuous no work for 10 to 12 days. Whereas in the Muslim countries, the Ramadan 2 hours which makes 6 days and 2 more days of Eid makes it to 10 days. And if we see the general trend after Christmas in Europe, generally the offices are not filled full after the holidays as well. This report is nothing but to make the Muslims feel as if they are useless and running away from work during Ramadan and that Ramadan is nothing but wastage of time and money. Please stop publishing such news articles which doesn't mean anything other than giving a wrong information.

    Ariv, Dubai, United Arab Emirates

  4. Added 17:06 August 30, 2011

    Breaking News!!! Countless Trillions of Blessings of the Allah Almighty "gained" during the month of Holy Ramadan... which is equivalent to good deeds of a lifetime of the believers of Allah Almighty :)

    Umair, Islamabad, Pakistan

  5. Added 16:47 August 30, 2011

    How about Christmas vacation in Europe and Western countries, they are not even working for two weeks. About India everymonth there is holiday, either deepawali, holi, onam, pongal are they evaluating those lose.so some people simply bluff without base.

    Masksherk, Dubai, United Arab Emirates

  6. Added 15:53 August 30, 2011

    Sad article. Unnecessary and against the spirit of Holy month of Ramadan. What is the intention of the article? If you want to work 10 hours, go ahead. Who's stopping you? Why are you creating a sensation out of someone's extra hours given for 'spiritual matters'.

    Iqbal, Sharjah, United Arab Emirates

  7. Added 15:44 August 30, 2011

    This is very disapointing and baseless article and people should be ashamed for positing such a news on the first day of Eid. It's sad that nowdays everything is translated to monetary value! Where is this world going to! God help us all.

    Suad, Dubai, United Arab Emirates

  8. Added 15:44 August 30, 2011

    One simple solution is if people work less then ask them to work more for that many hours. Also its true this less work concept is valid in Gulf only. So other places how Muslim worship their fast? This should be considered specially in Gulf countries....So give options to all the employees its up to them. There could be many people you Fast also and work also.

    Amit, Mumbai, India

  9. Added 15:38 August 30, 2011

    I didn't have as a contractor any loss during Ramadan in the productivity, its all about how to manage the workforce, and at least in our country's in europe the legal worktime is 38.5 to 40 hours/week and.....it works, and as Christians or other religions than Muslim we have to accept their culture and behaviour.

    Abel, Ras Al Khaimah, United Arab Emirates

  10. Added 14:52 August 30, 2011

    If this statment is fake!!! I just want to ask everyone that why these empolyees do not dedicate as charity their 1 month salary to company or to employer? There are many Muslim countries and Pakistan, India, Malaysia are working full time 8 hours during Holy month of Ramadan, they are having energy to work full 12 months and they don't have any excuse. Even commerical landlords and govt should not charge rent and govt fees during the month they must do as charity during Ramadan month but nobody doing this, why??? Specialy on reccession period. Sorry for that If I did mistake on this article. Thats why this article and statement is complete truth. Regards Bajaj

    Bajaj, Dubai, United Arab Emirates

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