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Residents struggle with rising prices, stagnant salaries
April 5, 2015, 11:14 am

Salaries that have remained unchanged, limited job opportunities and rising cost of living have left many expatriates struggling to make a living in Kuwait, one of the world’s richest countries.

To meet the upward spiral in prices of basic living necessities, some residents are choosing to downgrade their lifestyle by cutting down on entertainment and other off-the-cuff expenses or shifting to apartments with lower rents while others are seeking loans from every available source or ending the month in red. The situation is forcing some expatriates to contemplate returning to their own countries or at least sending families back home.

While there are affluent expatriates who are unaffected by the continuing rise in living costs, for many it is constant struggle to manage their finances so as to leave at least some savings at the end of the month. Here, we talk to some of the expatriates struggling to make a living in Kuwait.

Ambrose who used to work in a local car company explained that earlier he was able to spend a bit on extras, but since there have been no increments to his salary in the past many years, he is finding it difficult. “Before we used to spend quite a bit on entertainment and dining out; now, I have told my wife and children to cut down on all unnecessary things, because I have to save money just to pay for the rent, food and school fees. I used to save about KD100 every month, but nowadays, since rent prices have gone sky-high, I barely save anything.”

Shekher, who works as an sales executive in Mahboula is similarly struggling to manage his expenses. “It’s very difficult for me to manage all my monthly expenses,” he says. “I have decided to send my wife and son back home.”

When four years ago, 25 year-old Tigist from Ethiopia was promised KD 400 salary by her sponsor, she shifted to Kuwait.  But upon coming here, financial difficulties forced her sponsor to renege on the promised salary. "About six months back, I used to pay KD100 for a studio apartment, since I shifted to another similar studio-apartment I have been paying KD 175, which takes a lot off my salary. I am rethinking on moving back to my home country where, I used to save better money,”  she reveals.

With thousands of new foreigners arriving in the Gulf state and very few affordable real estate developments taking place, rents have been rising well above inflation in the past several years. Ankush Mehta, an Indian who has been in Kuwait for over eight years, runs a security-camera retailing business for companies in Kuwait. He has been facing the brunt of the rising rent costs. "In four years, rents have escalated like anything; I used to pay KD160 but now I pay KD270."

Speaking on the related topic of shared accommodation and bachelor residences, Mr. Mehta adds, “The state's decision to allot separate residential areas to bachelors is not practical.  I heard an area in Jahra has been assigned for bachelors, but how would a person, particularly laborers and low-income people working in Kuwait City or Fahaheel, manage to commute daily from their residences to work sites? Also, since most of the real estate companies rent their buildings either to families or to companies, sharing flats could have been relieving. But because this is illegal in Kuwait, the government should put a maximum-minimum cap on rent limits, to sort out the problem." 

Kuwait is said to be planning the establishment of an administrative body to set property rents in a bid to avoid exorbitant price rises. Landlords would be required to lodge their vacant property with the body, which would then set rents according to various criteria, including the area, type of property, age and services.

Hajeer Nainan Koya, 33, who has been living for five years in Kuwait, had this to say, “The main problem with rising cost of living comes from mounting rents. If you are an expat you will most likely get a landlord who needs you to renew your tenancy contract every year, and that is how they evade the rule of five years contract and the stipulated rent freeze during this period. As an expat, 30-40 percent of my salary is gone for paying rent; it causes a fatal blow to my family’s budget.”

Offering his own insight into the situation, Mr. Koya continued, “Inflation is there, if you compare the salary patterns of the last 6-7 years and price inflation history for the same period, you will be shocked to know that the salary increase for an average expat in the given period would be maximum 20-25 percent, but the price inflation ring the same period is at least more than 60 percent.”

Despite government claims that inflation in the country is under control, many expats in Kuwait are still feeling the pinch of rising prices and most of their salary is directed to essential expenditures such as rent, food items, school fees and transport.

Kyle Yodico, 25, a Filipino who works in a 5-star hotel, explained his own sorry plight, “The prices of goods have gone up considerably, but the salary does not increase and it is quite disappointing. Though we work hard, we are not duly compensated. I have free accommodation and food, but the food provided by the company is really not tasty so I need to spend a lot of  my salary on food.”

Sonia Khalaf, 34, an Egyptian customer service agent added, “Expats, in my opinion, come to Kuwait for better living standards, but salaries vary depending on their nationality. I came to Kuwait for a better life and the struggle with price inflation made me behind on my plan that I set for myself, which is depressing.” She continued, “It is not easy, as I end up with no money at the end of month. I go without buying any luxury items, only paying rent, transport and food. ”

Many expats also complain of being woefully underpaid, despite working hard and contributing their skill to the company. There does seem to be a disregard for the survival of expats, especially when companies are found to withhold salaries or in some cases, keep extracting work at a stagnant salary that cannot cover the basic expenses.

In an eye-opening exposition of the plight many expats have to endure, in early March of this year around 200 expat laborers, who were employed by a local construction company, went on strike to protest the non-payment of their salaries for three months. They described how they could not eat properly and had to resort to begging from shops for chicken feet to fill their stomachs.

How to survive with mounting expenses draining salaries and depleting bank accounts is a question that many expats are seeking an answer to. Nevertheless, rather than return to their home country, beleaguered expats tolerate the stress associated with living in Kuwait due to the comparative better financial rewards. Mr. Yodico stressed this point, “Comparing my financial status, I guess it is fairly true that it is better compared to my home country. At least we get to keep all the salary that we are working for, without paying any taxes.”

So, while all is not gloom and doom, and some families manage to live comfortably, the vast majority of people we talked to spoke about their difficulties in surviving rising costs with their limited salaries.

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