"Greedy Sinners...imposing unjustifiable increases in rents" - Qardawi on Landlords who hike rents in Qatar

Qatar expat workforce feels pinch of rising costs

DOHA, Oct 17 (Reuters) - Construction engineer Abdulaziz Dhatri tearfully watched his family board a flight to India and recounted how he was forced to send them back home due to the spiralling cost of living in Qatar.

Only a few months ago, the 38-year-old was standing at the same departure gates at Doha International Airport, seeing off his sister and husband who also could not afford to live here.

"I tried very hard to keep the family together, but we can't afford it anymore," he said. "Life has become too expensive here. I have no choice but to send them home."

Like other neighbouring energy-producing Gulf Arab states, Qatar's economy is booming on the back of high crude oil prices, making this tiny nation one of the world's wealthiest.

But inflation is also climbing, with some bankers expecting it to rise to more than 7 percent by the end of this year.

According to central bank figures, inflation was 5.8 percent in the second quarter of 2005 and 6.8 percent last year.
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Bankers say salaries have lagged behind, while the prices of everything from rents to school fees to staple foodstuffs have risen, squeezing the resources of Qatar's expatriate majority who came to this rich country to improve their standard of living.

To cope, many people like Dhatri are sending their families home or taking on second jobs.

"There is growing pressure on companies to increase salaries because we are seeing a rise in living expenditures across the board," said Dominic Beange of Doha Bank. "Those with modest salaries are hardest hit. They have nowhere to go."

Economist Roy Thomas added: "There's a new level of living costs and pricing. Salaries are not keeping up with the rising costs in Qatar."

Foreigners, mainly labourers from the Indian subcontinent, form 83 percent of Qatar's population of about 860,000. They are the backbone of a construction frenzy gripping the Gulf region.

Gulf governments provide free schooling and healthcare for their nationals, who also receive hefty subsidies for a range of services including housing and utilities. They do not however provide these benefits to foreigners.

"GREEDY SINNERS"

Residents can talk about little else but the rising cost of living. Newspapers are awash with letters from distressed tenants blasting property owners for the spike in rent and expenses.

Even Sheikh Youssef al-Qaradawi, a leading Sunni Muslim cleric, has called for a cooling in prices, saying property owners who increase rents are "greedy sinners".

"It is a big sin, imposing unjustifiable increases in rents is an injustice," he told worshippers during Friday prayers.

Qatar's emir Sheikh Hamad bin Khalifa al-Thani also expressed concern about the rising inflation, calling it the only "negative indicator" in an otherwise booming economy.

Most two-bedroom flats are rented out for about 5,500 riyals ($1,512) a month, up from 3,000 riyals a year ago. Villa rents, which now range from 12,000-25,000 riyals, were 6,000-10,000 riyals.

Even utilities are on the increase -- state monopoly Qatar Electricity and Water Company recently said it would raise rates due to higher costs.

Government officials admit there is little they can do to curb the "dramatic" rise in living costs and blamed companies for not looking after their workers.

"It is not our place to micro-manage the economy or regulate housing costs, but companies should be forward thinking and look after their human resources," said a senior official who declined to be named.

"We must also remember that there are times when the market goes up, and there will be times when the market goes down. It will always adjust itself," he added.

For Satash, a Sri Lankan labourer, this adjustment cannot come soon enough.

The 20-year-old holds three jobs and lives in a squalid, one-bedroom flat with four other men on the outskirts of Doha.

"Everything is very expensive now and I can't afford to live anywhere else," he said. "I will have to leave soon, I'm getting very tired and its getting harder to live like this."