November 20, 2005 1:00 PM PST

Under India's shadow, Dubai squeezes into outsourcing

A correction was made to this story. Read below for details.

DUBAI CITY, Dubai--India's a tough place to live. That's the pitch Dubai is using to woo companies to bring outsourcing work to the region.

The city-state, part of the United Arab Emirates, has kicked off an effort to land some of the outsourcing work that is heading to countries with low labor costs like India and China. But instead of trying to compete head-to-head against those giants, the country is positioning itself as a place where companies can place their more senior or more qualified employees who may not want to live in Bangalore or Mumbai.

The plan, ironically, appeals at least to one Indian firm. Dubai Outsource Zone (DOZ), the government agency/free trade zone responsible for the project, recently signed a memorandum of understanding with a large Indian outsourcing company to bring work here, said Ismail Al Naqi, the director of DOZ.

Employees at the Indian firm who have worked at the company for a couple of years will be able to qualify for the move, he said. Dangling the carrot of a work transfer will, ideally, cut down on employees changing jobs, a major problem for Indian outsourcing companies.

At the same time, continued loyalty is assured. Anyone who quits their job loses their work permit and gets deported, Al Naqi said.

"No one will refuse to come. Dubai could be 30 percent more expensive, but you could get more productivity," he said. "We're half way through finalizing the deal."

Potentially, the city could become a center for services like telemedicine, where Western doctors can pass work on to doctors in other countries who aren't paid as well. "When you get to the high end, the (outsourced) talent is paid the same wherever you go," he said.

While a large number of nations are moving into outsourcing, Dubai can boast of a few advantages. The first is a whole lot of money. Rising oil prices have brought a windfall of profits to the Arabian Peninsula. Dubai is funneling this into a massive construction and economic diversification plan.

To attract companies, DOZ is subsidizing 50 percent of the real estate costs and 50 percent of employee housing. By 2010, the goal is to have 100,000 employees working in outsourcing here.

Additionally, the government has streamlined bureaucratic processes. Where the government ends and the private sector begins is somewhat hazy. "You can call Dubai the biggest company in the world," Al Naqi said.

Thirdly, corporate income tax, personal income tax and sales tax don't exist, which can ameliorate some of the cost disadvantages. There is also the lifestyle issue. The city has emerged as a polyglot metropolis. Much more than half the population has arrived from somewhere else on a work permit; Indians are actually the largest national group. Although traffic is bad, it's far smoother than in Bangalore.

The results so far are somewhat mixed. On the positive side, space at DOZ is getting gobbled up. The first phase of the project, which involves 250,000 square feet of office space, is already sold out. It begins operations in the second quarter of 2006. Another 250,000 square feet of space that will open in the fourth quarter of 2006 is sold out too.

"Now we are building for 2007," he said.

Most of the contracts landed to date, however, revolve around conventional business process outsourcing and not the high-end projects DOZ hopes to attract. The companies coming here, which include ABN AMRO and AXA, will use DOZ to handle regional projects.


Correction: This story incorrectly described Dubai as an island nation. Dubai is an emerate within the United Arab Emerates.


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You got to be kidding me to work on slave condition..
I can't believe it. Why would I want to work in country where I cannot choose who I want to work for. If I have better job and career choice with other employer then I should be allowed to change jobs. Off course government Red Tape paper work can occur in the same country.

Does Sheikhs still believe that they are hiring slave workers or professionals? Look at any modern western countries they dont have such Mambo Jambo slave labor practice. In fact working in India is much better in terms of things to do, social circle, culture and most important Right to seek better carrier. I am better off staying away from Dubai.
Posted by mehtasa (4 comments )
Reply Link Flag
Got that right.
Not to mention the constatn terrorist threat.
Posted by patel5 (88 comments )
Link Flag
You already are ...
when you answer phones saying "Hi, my name is John" ehem ehem...
Posted by kartbart (48 comments )
Link Flag
Working with a Visa in the US is not really better
When I came tpo the US, my Visa would only allow me to work for ONE emplyer: they could set any condition they wanted. If they were to terminate my job, I had to go back!!!

So, slavery exists everywhere. In fact, this is often the definition of the "guest worker" program.

I was told that US Visa are _now_ more flexible, but I doubt it.
Posted by aabcdefghij987654321 (1721 comments )
Link Flag
U Know fine dont learn grammer!!
I pity the Person Who moves over there thinking hes getting a better life, When all I can say Is They want People there for specific tasks. If U know ABC.. xyz then plz stick to doing that only dont do grammer (OR worse Think THEY will teach U)

I have stayed in UAE for 9months, in those months i learned so much about life & how not to take the first Job that comes our way.

I dont agree the situation of slavery there, althought the law there is strict, it can benefit a person immensly-if someone bothers about finding them in the first place??-

All I ask of those who are to judge what im about to tell U is "How much about Indian Employee Laws do You actually know??" All a typical job seeker is bothered about is getting the job...However if We are to use the time it takes for the Visa to get processed to learn about the rules of the land regardless of which country we migrate to (GULF Or Western) well be much more in power to FINALiZE A deal with our Employer.

Other thing there is what U would term as slavery I term as the Uselessness of the mind of the people who live there survive hand to mouth and still whine about how the country cant help them. Well who moved there in the 1st place is all I ask?

Trust me i lived there Liked & hated it also. but tell me one thing.. If U think fear is the reason we should not work there, then our Jobs in India Are just there because of the humility that the 2 sections(Hindus-Muslims) of society live in with. But do U think these are not erupting, think again. If one more clash occurs that is remotely close to the Babri incident, Thats it Good bye MUMBAI BPO Hello Dubai.
Posted by Zaar Rulez (1 comment )
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Dubai....not an island city
I'd just like to point out that Dubai is not an island. It is very much
a costal city but by no means is it surrounded by H2O on all sides.
It is a great city to work in though...considering its geographic
location its extremly cosmopolitan and there's always things to do.
Posted by tushar27 (1 comment )
Reply Link Flag
Oil Rich Despotism - Gimme a break
In Dubai -
You go to jail for
a) Staying with someone not your spouse.
b) Holding hands in public
c) Offending the Undercover SECRET police
d) All of the above

The answer - (d) All of the above
Posted by jdoe2247 (2 comments )
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Dubai is good but ......
Some points to consider if the place is really good to work in -
1. Private companies and govenment agencies hold employees passports (although illegal). This strange practice also allows companies to arm twist employess.

2. You need approvals from your previous employers t change jobs. !!
3. You need employers permission to apply for a driving license.
3. You cant tint your car unless you belong to a certain nationalities.
4. Entry to bars and pubs are restricted and some nationalities are asked to pay a "cover charge".
Many more such practices are rampant in Dubai and unless something is done...the big buldings really will not make a difference. Not to mention the rising cost of living !
Posted by twofangz (17 comments )
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Dubai is the place to be
But India and China are still the best outsourcing countries

<a class="jive-link-external" href="" target="_newWindow"></a>
Posted by Costkiller (1 comment )
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