2/2014
Print this page

Somali business in Dubai

Dubai is well-known as a tourist resort and a juncture for business, but also as a city of foreigners and guest workers.

Dubai is one of the seven emirates constituting the United Arab Emirates: in addition to Dubai, there are also Abu Dhabi (which serves as the capital), Ajman, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain. It has been estimated that of the 2.1 million people in Dubai, about 90% would be expatriates. Expatriates have different opportunities to succeed in the country depending on their skills and contacts: unskilled migrants are in the most unfavorable situation.

There are no reliable statistics available on the number of Somalis who permanently live in Dubai. According to some estimates, in 2005 there might have been some 10.000 Somalis living in Dubai and 20.000 in the U.A.E. (Haga 2009). However, the actual number of Somalis in Dubai is much higher, if temporary visitors are counted as well. Dubai is one of the international airports through which flights to and from Somalia pass, and it makes the city very popular among the travelers. In addition, Dubai is an important port and a center for Somali business community.

I visited Dubai for a few days in March 2014, on the way from Hargeisa back to Finland, and wanted to learn more about the life of Somalis in the U.A.E., in particular Dubai. I had an opportunity to speak with a few people who had either moved on from other resettlement countries that they had moved to in the 1980s and 1990s after the war in Somalia had broken out, or who had moved to Dubai straight from Somalia. In addition, I met travelers who were on their way to Somalia.

Successful experts

Abdisatar Hagi Abdulla sits in his office close to busy Nasser square. He moved to Dubai from Finland in 2006. That time one of his friends, who worked in Dubai at a remittance company, hawala, encouraged Abdisatar to come over to Dubai for work. The family stayed behind in Finland for three years, until they joined the father. Abdisatar started from the ground, and today he is Operation Manager at Kaah Express, one of the big remittance companies. The head offices of hawalas are mostly located in Dubai.

“In the beginning it was difficult to be here, because the family was still in Finland. I wanted to start own business, but I did not get that money. So, I concentrated on the family. I did not make big money, I just wanted to make normal life.”

Abdisatar picks up the phone and makes a spontaneous phone call to one of his children, who is somewhat surprised to have an unexpected discussion with a Finn. The daughter speaks absolutely fluent Finnish language. “I always tell them, your real home is Finland”, Abdisatar explains.

Abdisatar Hagi Abdulla after a busy day at the Kaah Express office.

Mohamed, who wants to speak anonymously, is Somali Canadian. Mohamed left Somalia in 1989, and has lived and worked also in Saudi-Arabia. He first came to the Emirates to work in a company in 2003. Now he owns a successful IT company. “The first couple of years here were tough. However, gradually our situation improved and now we are doing much better”, Mohamed says.

According to Mohamed, it was easier for the family to settle down in Dubai than in Saudi-Arabia. “When you live in Western countries, there are certain values that you take for granted. It was a bit difficult, for example, that my wife could not drive there”, he says and continues: “I do not have such fear now as I had in Canada regarding schooling or environment.”

Another advantage of living in the Emirates is that they are closer to Somalia: time-zone is almost the same and they can easily stay in contact with relatives. And also the weather is nice, at least compared to the winter in the Northern hemisphere.

Another successful entrepreneur whom I met is Hassan Jama Mohamed who also lived some 10 years in Canada before moving to Dubai in 1996. Before the move, he already had some business contacts in the region. He started doing business with sea food products by selling them to the Chinese community in Toronto. In 2005 he started real estate business and now he is General Manager at Somgulf Real Estate. Real estate business requires more funds than some other types of business.

Hassan Jama Mohamed in his office.

There have been a number of challenges on the way, for example the real estate crash in 2008 when the whole business collapsed. But now Hassan proudly shows me a high-rise rental building in Ajman that his company has built. The building with twin towers has 208 bedrooms and 12 offices, in addition to shops, a gym, a medical center and a bank. It also has parking space in two floors.

Since the completion of the project in July 2007, the building has been forced to operate temporarily by diesel generators to produce electricity at high cost. However, Hassan hopes the problem to be solved soon, and the government to provide cheaper electricity. Another building project in Sharjah is to restart soon, and another project in Ajman in mid-2015.

Challenges in settling in

One of the biggest challenges for families who want to settle in the U.A.E. is the schooling of children. Mohamed says that in his family with six children, the oldest being 21 years of age, around 30–35% of his income goes to the education of children.

Different schools have different fees.For example, Abdisatar pays 1.800 USD as annual school fee for his daughter who goes to grade 5. In addition, he needs to pay for a bus ticket, school uniform and books. At a medical school in Sharjah the fee for one academic year is around 25.000 USD.

Because of high schooling expenses, many families do not afford to buy property in the Emirates. Housing in Dubai is very expensive, and therefore many families live for example in Ajman where it is possible to rent a two-bedroom apartment with good condition for 14.000 USD or less for a year. However, traffic is busy, and for example for Abdisatar it takes an hour to reach office in Dubai from home in Ajman.

Children in the families who used to live and go to school in other countries in Europe and in North America may also miss certain facilities such as good libraries. And snow.

A high-rise building in Ajman built by Somgulf Real Estate.

Travelers and Somali market

I stayed at the Juba hotel, which is a hub for Somalis travelling between Somalia and Dubai. It is owned by a Somali businessman from Italy. Juba hotel is a place where travelers can hear recent updates of the situation in Somalia as they finalize their travel plans. The hotel is also excellently located next to the gold market and Somali shops. Therefore, it is an ideal place to fill in suitcases before travelling to Somalia or returning to Europe, North America and other places. Naturally, for many travelers Dubai is the main destination, where they come for holidays, and to see relatives, enjoy the sun and do shopping.

Juba hotel, a hub for Somalis travelling between Somalia and Dubai.

The hotel is also a great place to hear stories. I chatted with Osman, who has worked at the hotel restaurant for six years. He is from Mogadishu, where his wife and six children and most relatives still live. He maintains the family by sending them money regularly, and he visits the family once a year when he is entitled to his 45-day-long holiday.

Osman limps, because he was severely injured in an armed robbery in his own house during one of the visits to Mogadishu. Yet, he continues to go back – “I have to, because the family is there”, he says and laughs.

I also meet an elderly woman from the US, who is on her way to Mogadishu, for the first time since she left Somalia in the beginning of the 1990s. She owns a house in Mogadishu, and she wants to see it and make sure that all the paper work regarding the ownership of the house is in order. She seems a bit worried about the security situation, but she is determined to go.

A colorful Somali shop.

One afternoon Abdiqani, who has facilitated me to find my way in Dubai, takes me through the maze of Somali shops next to the famous suuq dahab, gold market. The area where we go in Deira’s Al Ras is known as the Somali market, suuq Soomaali, and it is full of Somali cafes, taxis, restaurants and shops. Many of the small businesses run by Somalis that do not require big investments can be found in this area.

We drop in to smaller and bigger shops selling colorful fabrics and scarves. Among the traders there are also many women. The latest fashion as comes to diracs comes from Dubai.

There are also numerous shops selling gold – rings, ear-rings, necklaces, heavy wedding jewelry. Small cargo companies are also popular as businesses: we speak with a man, who moved over to Dubai from the UK, and is now invested in the cargo business between Dubai and Somalia. He complains that it is a demanding job that pays little. In the shop there are several packages waiting for transfer to big ports in Somalia such as Berbera, Bosaaso, Mogadishu and Kismayo.

Small cargo companies are popular as businesses.

Opportunities and insecurities

According to my interlocutors, Dubai has changed a lot in 10 years: Ten years ago paper work for business was much easier, now everything is more heavily regulated. Also what happens in neighboring countries such as Syria and Iran affects the situation in Dubai as those who can afford it move to the city.

“If someone wants to come to Dubai for the purpose of starting a business, he/she must have a well-thought plan with appropriate funds. There are many who came here to try their fortune, but went back in a year or so. Dubai is still a good place to do business, but nowadays it is difficult to survive on a small business”, Mohamed says.

Those Somalis who really succeeded in business and working life in general in the Emirates were those who had a good educational background already when entering the country. In addition, they had contacts in the region and appropriate funds. However, Dubai offers also smaller business opportunities for those who cannot make large prior investments, for example for women traders.

To start business in Dubai is easier than in Canada or Nordic countries. There are no taxes in Dubai, but still there are several mandatory fees that an employer needs to take care of such as a trade license, government fee and expenses of the staff, who all are expatriates: an employer has to pay all their fees such as annual flight tickets to their country of origin and new work permits every two years.

Foreign workers at a fish market in Ajman.

A company is responsible for an employee, and an employee is responsible for his or her family in the Emirates. Mostly the wife is not working, but stays at home taking care of the children, in case the family stays in the country, too. Once a boy in the family reaches 18 years of age, he becomes responsible for himself and needs either to work or to study. However, a girl and a wife are seen as dependent on the father in the house, and also their visas are dependent on the father’s status.

Many come also to Dubai with a tourist visa and start working unofficially. If they work well, a company may provide them a working visa later on. This was also the aim of a Canadian young man whom I met. He was working in real estate business, where a company sells and rents property. The man told me that he did not have a regular salary, but he would receive a commission for the sales. ”The company wants you to prove yourself first, then they will take care of the visa arrangements.” Being on a tourist visa, he had to travel every 30 days over the border to Oman to renew his visa.

Mohamed says that the future is uncertain as the situation in the Gulf region at large seems difficult. Most expatriates and guest workers work for private companies and some of them without proper retirement plans.

“You are on your own. We are legally here, but still we are foreigners, and sooner or later we have to leave this country. Therefore, we keep light weight when we are here, we keep outside the country what we can.”

Text and photos: Marja Tiilikainen

The author works as Academy Research Fellow at the Department of Social Research, University of Helsinki. She is thankful for Dr. Abdirashid Ismail, who generously helped with contacts in Dubai.

This email address is being protected from spambots. You need JavaScript enabled to view it.

Source: Rannveig Jetne Haga (2009). Tradition as Resource. Traditional Somali Women Traders Facing the Realities of Civil War. Uppsala: Uppsala Universitetet.