Rising education costs may drive expats away

The degree of dynamism in a nation's economy hinges on its labour force, a major determinant of economic growth and productivity. In Dubai, where a large proportion of private sector jobs is held by expats - around 90 per cent of the country's workforce - much of the dynamism stems from its migrant workers.

Why Dubai is always on the top of the list of where jobseekers want to go is obvious. Salaries are tax-free. The tax-free environment increases expats' chances to build bigger nest eggs. However, recent trends in the cost of living in Dubai may change all that.

A recent study by the Dubai Chamber of Commerce and Industry shows that aside from the rising prices of food and housing, Dubai consumers who have to send their kids to school are facing another dilemma: skyrocketing school fees.

Statistics show that the cost of educating children in the emirate has become higher than ever, with school fees posting an average inflation of 16.6 per cent in the third quarter of 2008. Secondary schools reportedly imposed the highest increase.

Analysts say expatriate families, who are still trying to live together in Dubai, might have to rethink their plan, as the rising school fees are eating into their income. Many expatriates are already going through the pains of separation from their children.

With the recent round of school fee increases, many more will be compelled to send their children back to their home countries to study. Fees at secondary schools climbed 25.2 per cent. However, the fees at the primary or lower levels are not climbing as fast - 18.7 per cent in the third quarter. Fees at tertiary schools also rose by 14.2 per cent.

Here's a quick look at how fast school fees have climbed. In 2005, the cost of one year's tuition at a private secondary school ranged from Dh3,000 to Dh46,000. In 2008, the upper limit soared to as high as Dh58,000.

Cost of operations

At the tertiary level, tuition fees for a three-year course in most schools ranged from Dh50,000 to Dh125,000 in 2005. Three years later, the fees ballooned to Dh60,000 to Dh140,000.

However, there isn't much that the education sector can do to ease the situation. According to Rajni Thakur, a senior economist at Dun & Bradstreet, the inflationary pressures in the economy and the rising cost of operations are the biggest concern among companies in the UAE. "The education services sector faces the same concern and has to deal with rising costs of providing the service. Schools thus don't have much alternative than to pass on the increase in costs to the users of the service," Thakur tells Gulf News.

She says the high school fees are definitely another burden on expatriates in addition to the price pressures on other fronts they face on a daily basis. "Many expats are likely to make their own cost-benefit analysis of Dubai as a working destination for them," says Thakur. "With the recent price escalation in the cost of education, more and more families have no choice but to face the reality that they cannot afford the cost of education in Dubai, and have to send their teenage children home for higher education," the Dubai Chamber report says.

Certainly, the decision to stay or leave now features prominently in the lives of many expats and the future of Dubai's labour scenario, which is currently dependent on foreign human capital, apparently hangs in the balance.

The dilemma whether to stay or leave haunts many expats and the future of Dubai's labour scenario hangs in the balance.