Is it Time to Get out of the Middle East?

This is a question that dogged me many, many times when I worked in the Middle East between 2007 and 2010. I mean, I had three great contracts, initially in Kuwait, then on to Qatar for a year and then Oman. But why the disquiet? Two words sum it up: Israel and Iran. Even back in early 2007, Israel had already 'bombed' a so-called nuclear site in northern Syria but that whole episode fizzled out like a damp squib. But the potential bombing of Iran's nuclear facilities by Israel has reared its ugly head again.

Just last week, Mr Meir Dagan, the recent head of Mossad, the Israeli Secret Police, warned of grave consequences if Israel bombs Iran. This was in light of reports that Israeli fighter jets had conducted exercises over the Italian island of Sardinia. Their training programme included attacking distant targets, conducting midair refuelling and thwarting surface-to-air missiles. A vertical vapour trail was widely visible in the sky that afternoon as the military tested a newly developed Jericho 3 ballistic missile that can presumably also carry nuclear warheads up to 4,500 kilometers (2,800 miles).

Serious stuff, no? But it was the report that I read in the on-line version of the Guardian newspaper that really put my nerves on edge. It reported that ‘Britain's armed forces are stepping up their contingency planning for potential military action against Iran amid mounting concern about Tehran's nuclear enrichment programme.’ Really scary stuff. When I read this I thought oh surely not, surely we're not going to get sucked into another disasterous adventure by hanging on to the coat-tails of the United States!

The British Military of Defence (MOD) believes the US may decide to fast-forward plans for targeted missile strikes at some key Iranian facilities. British officials say that if Washington presses ahead it will seek, and receive, UK military help for any mission, despite some deep reservations within the coalition government. And if that wasn't enough, I then read that, British military planners are examining where best to deploy Royal Navy ships and submarines equipped with Tomahawk cruise missiles over the coming months as part of what would be an air and sea campaign.'

I won't go into the intricacies of Iran's nuclear activities; this is for more erudite mouthpieces than me to consult with, other than to say there seems to be inexorable proof that the Islamic state is up to no good.

If, and it's a massive 'if', Israel should go ahead with this nonsensical attack against Iran then the consequences are too horendous to contemplate. So, from a layman's perspective what would it mean for us expats, and, more specifically, those who are in the Middle East? When it comes to the military ramifications, then who knows where that might end, but when it comes to the global-economic side of things, then we are in no-man's land. For one thing, the Iranians will close the Straits of Hormuz; that you can be certain. This small 34 mile opening to the Arabian Gulf witnesses 17.5 million barrels of oil and 3.5 billion cubic feet/day passing through on its way to Asia, Southern Africa, Europe and the Americas. All this energy is exported from Iran, Iraq, Qatar, Bahrain, the United Arab Emirates, Kuwait and Saudi Arabia - so, big numbers, big business who pay hosts to 100s of 1000s of expats from every continent.

As mentioned previously the military scenario would be a regional and then a global disaster. Iran has proclaimed on many occasions that if attacked one of its immediate reactions would be to 'shut off' the Straits of Hormuz and attack all non-Iranian oil and gas transport ships in the area. Iran has also stated that not only Israel will come under fierce retailiation but also the Gulf states of Kuwait, Saudi Arabia, Bahrain, Qatar and Oman, because these states host US and British military resources. For instance America's 5th Fleet has it's base in Bahrain.

So what does all this war-mongering mean to the Western expat eking out a living in the Gulf? Well, the big unknown is, "when is this likely to take place?" The obvious answer is, no-one knows. On the face of it Iran presses on with construction of its 'peaceful' nuclear plants. We in the West continue to monitor developments from afar, Israel remains quiescent on the matter, and Britain hangs loose with a watching brief. For me personally, I think I would be looking for alternative employment soon. Luckily enough, I got out of the Middle East last year, having spent the two previous years in Oman. Once more, there is a problem because there just isn't the same number of energy job opportunities that there once was. And with the global economy on the brink of a double-dip recession, the question is whether one stays put in the Gulf and hopes the whole thing will fizzle out. The alternative is to shut up shop, sell your house, cash in all your earnings, and go live in the northern Himalayas on $10 a day for the rest of your life. It is an option!

The Eurozone and Expats - Is there a Problem?

Well, is there a problem for us expats? Simply put, yes and no. Yes in that these days whatever happens economically in one part of the world can affect other areas of the world such is the interconnectedness of our modern fiscal world. On the one hand, no, because it depends on one's financial muscle; in other words is your budgetary house in order? It would be quite cynical of me to state that, what the hell, it has nothing to do with me. I sit here quietly earning a good living, daily per diem, wonderful apartment, insurance and medical cover and other expenses covering most of my outgoings, and all seems right with my world. So, should I give a damn about Greece, Portugal, Ireland, Italy and whoever next requires bailing out?
You see what afflicts the aforementioned countries is simple mismanagement of their economies. Okay, possibly 85% of all countries have to borrow to keep their economies going. Unless you are Saudi Arabia or United Arab Emirates, et al, the simple fact is that countries have to borrow due to public spending and income tax / Government bond sales deficits. It's a bit like a householder whose salary is not enough to fund his/her monthly outgoings. What to do? Borrow the extra money - simple as that.
With Greece the problem stemmed from years of unrestrained spending, cheap lending and failure to implement financial reforms that left the country badly exposed when the global economic downturn struck. This whisked away a curtain of partly fiddled statistics to reveal debt levels and deficits that exceeded limits set by the eurozone. Again, spending beyond its means.
With 'normal' people, they are in the same boat. In the UK, it was published yesterday: 1-11-2011, that private debt has ballooned to £1.3 trillion! That is a hell of a lot of debt. And you have to consider just how all this debt is going to be paid back. Unemployment in the UK has surged past the psychological 2.5 million barrier with no sign of abating. And if there are no jobs, people cannot pay off their debt, and the double whammy is that it cuts into the Government's income tax revenues.
And then there are us expats. I think if you were to walk down any high street in the UK today and ask passers-by how much money they thought expatriate workers earn, they wouldn't have a clue. In fact many of those window shoppers couldn't even tell you what an expat is. I could tell them that it was no guarded secret that the majority of expats do what they do to earn higher salaries than back home with the added bonus that it is tax-free. And yes, most of us enjoy other perks: free medical insurance and health care, free accommodation and air fares and in many cases a daily living allowance. I knew one chap who worked a 28-28 rotation job in Qatar who only spent about £100 a month of his own money. Mind you he was a bit of a loner and one got the impression that the thought of his spending money was a sin! This basically left him banking nearly his whole salary - quite remarkable.
In my own experience I detect a certain resentment amongst some segments of society who begrudge us the lifestyles we've been accustomed to. But what they don't appreciate is that at the end of the day, many expats are away from their families and friends for extended periods of time, sometimes working in hostile environments, but then we contribute to the local economies of the countries in which we work: there's car hire, in some cases car purchase, food and beverage sales, bar bills, clothes - you name it - we have to buy many things and in some cases paying more than UK prices.
Here in Baku, Azerbaijan where I work, the cost of living is about 25% higher than the UK. So there are pluses and minuses on both sides. So am I personally all that concerned with the Eurozone crisis? No, I am not because I don't have one single pound note tied up in stocks and shares or any other volatile investment for that matter. Keeping a tight grip on my personal finances is a high priority and a similar control on my spending is tantamount to living a clean, debt-free life. These are two prudent fiscal basics of expenditure that the Greek government has nonchalantly disregarded in recent times. It could beg the question, would I be going to Greece on holiday any time soon? Hmmm, I will leave that to your imagination.