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

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

  • Gulf loses Dh21.3b in GDP due to reduced work hours
    A majority of respondents in the new study believe their companies were holding up well despite fewer hours loImage Credit: Ahmed Ramzan/Gulf News
  • Gulf loses Dh21.3b in GDP due to reduced work hours
    Image Credit: Source: DinarStandard, ProductiveMuslim Ltd
35 Gulf News

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."

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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

31 August 2011 09:08jump to comments
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