Happiness and You: Happiness Survey '21, Pt 1

The first Happiness Survey was run in 2014, and has been run annually since 2018, allowing us to track changes in how you feel about living in the UAE over time. The survey covers everything from the economy, to how you feel about the Emirates as a place to bring up children. You can read the overview of the 2020 survey here.  This first article for 2021, focuses on the UAE economy, and how you view your life in the Emirates. 

We do a lot of comparison. A peculiarity about our species is that we rarely measure in absolutes, but against something or someone else. In this case, we look at both previous years, but also in terms of 'the other' - the countries you have come from. Aside from the two million nationals in the UAE, the other 80 percent of the population are here because they have made a rational decision to be so. That, usually, is based on a measurement of material, and spiritual, wellbeing. 

Our survey said...

The two key overall metrics for how well the UAE is doing come from the standard Net Promoter Score, and a very direct 'How happy are you?' question. In both cases, there has been a significant uptick in the country's numbers this year.

In 2021, all but 3% of respondents said they were happy, with 49% being very happy. Happiness levels have been increasing year on year since 2018, but 2021 was clearly an exceptional year for the country. The happiness scores correlate strongly with the Net Promoter Score, the standard measure of the strength of a brand or entity.

NPS scores range from -100 to +100. A positive score or NPS above 0 is considered “good,” +50 is considered “excellent,” and above 70 is considered “world-class.” 

The UAE's NPS for 2021 has risen to +55, up from +23 last year, and just +3 in 2019. Clearly residents think the country is not only getting it right, but enough so for them to be actively promoting the UAE as the place to live to their peers. We will see reasons why as we journey through this article, but, as we see below, the way the UAE has handled Covid-19 perhaps looms largest.

Coping with Covid-19

Bloomberg, December 2021: "Dubai’s reputation as a Covid-free haven helped push property sales to decade highs and hotel occupancy above 2019 levels... High rates of testing and vaccination helped push the country to first place on Bloomberg’s Covid resilience rankings last month. It’s placed third in the latest rankings."

The depth of the UAE's success this year lies in how it has battled Covid-19 and kept its head while others around it have lost theirs. Until the arrival of the new Omicron strain, the country looked like becoming one of the first truly post-Covid economies with restrictions reduced, in Dubai if not quite in Abu Dhabi, almost to the point of invisibility. Even with the new strain, the Emirates has so far avoided the return to the harsh lock downs we have seen elsewhere. 

An impressive 94% of respondents to our survey said that they think the UAE has managed the Covid crisis better than their home country, with 77% of respondents saying it has done 'much better'. Last year, 89% of respondents said the UAE was doing a better job, with 60% of those saying 'much better'.

That is having an effect on how quickly UAE residents think the Covid crisis will be a thing of the past. 17% of respondents have already put it past them, while 48% think the crisis will end this year. That said, a slightly larger number of respondents this year think the effects of the pandemic will endure into 2024 and even 2025. 

Jobs and security

While the UAE, and in particular Dubai, has seen an influx of High Net Worth (HNW) individuals arriving during Covid-19, the majority of us in the UAE are here to work. We arrive usually through a job offer, and stay (usually considerably longer than we expected to) because we enjoy our jobs, and value the prospects of the country, which for most of you seem to burn just a little brighter than in your home country.

Perceptions over employment prospects improved significantly in 2021. This is a result of both solid and very real growth within the UAE economy, which performed better than many expected, but also because respondents are asked to compare opportunities against their home country. In countries that have been less able to live with Covid-19, growth has been considerably more anaemic.

Reuters, September 22, 2021: "The United Arab Emirates' economy will grow 2.1% this year and 4.2% in 2022, the central bank said on Wednesday, as the Gulf state rebounds from the coronavirus downturn. "...Growth reach[ed] almost pre-COVID-19 levels," the central bank said in its quarterly economic review. It forecast real non-hydrocarbon growth - adjusted for inflation and excluding the oil sector - of 3.8% this year and 3.9% next year... Dubai said separately on Wednesday that it expects economic growth of 3.1% this year and 3.4% next year." 

While an uncomfortable truth, for many of us, jobs lie at the heart of our happiness. Not only do they provide the security and peace of mind to have the mental space to appreciate "the simple things in life", for many of us our job is part of who we are. As businesses flourish so too do the human beings who shape them.

Alongside improving job opportunities, those employees that retained their jobs through Covid, are now seeing salaries starting to improve. In fact, we have not had this high a percentage of respondents saying their salary prospects are 'much higher' in the UAE before. For balance, however, Covid clearly remains a hangover for some, with 8.61% of respondents believing their prospects are worse. This is, of course, unremarkable: No economy moves completely evenly.

Money matters

Yes there comes a time when money does not matter, but frankly in the three score years and twenty before then, it can make an incredible difference. Usually it is the very affluent who say money does not matter because they have forgotten the struggle. For those trying to climb the ladder to secure some sort of independence, it matters very much indeed.

There are two parts to how much you have. What you have coming in, and what you're spending. One one of these counts at least, the UAE is doing very well indeed.

After a relatively austere 2020, not only are more of you getting a pay rise, but the rate of increase is the closest to 2014 levels we have seen. 2014 was the first year we ran the survey, and was still part of Dubai's growth era, prior to more anaemic 2-3% GDP growth rates that have become the norm since 2016. Clearly part of this is a resurgence in business optimism, but also catch up. For many, a freeze on increments was the best an employee could hope for in 2020, with many facing a pay cut.

Over 1 in four respondents (27%) received a pay rise in 2021, with 13% of the subset that did getting a rise of more than 15%. That's the highest we have on record. The most common increment was between 3% and 5%, above official inflation rates in the UAE.

Despite the increases in salaries, there was a fall in the percentage of respondents saying they are able to save, dropping to 55% from 63%. This is, of course, unsurprising - savings rates around the world went up in 2020 during lockdown, and fell in 2021 as the world tasted freedom again. The 55% figure is in line with 2019, when 56% of respondents said they were able to save. Perhaps more interestingly, in 2020, when you could, being able to save was considered less important than in 2021, when many could not. Isn't that just human nature?

The numbers beyond the numbers

The following two charts are effectively the net measures of wealth, asking respondents whether they feel better of all things factored in. The first 'material' question is a question of gross financial benefits of living in the UAE after operating expenses are factored in. The second is the true net measure, that asks respondents to take a wider view and factor everything in in terms of relative standard of life. Break-even in this sense would mean a balance with the respondents' home country.

Materially there was a slight decline over 2020, which ties into an inability to save. This year many of you will be less materially well off because you will have rediscovered the myriad of ways the UAE is able to make you spend your money. It's important to note, there are still more of you feeling materially better off in 2021, than there were in 2019. 

In terms of standard of life, there has been a very slight polarisation, with the number of respondents with balanced books (saying standard of life is 'the same') declining. However by far the biggest number of respondents were those saying they feel better off in the UAE (79.59), up from 79.35 in 2020 and 71.13 in 2019. A higher number of respondents say their standard of life is superior in the UAE, than say they are materially better off, which suggests life in the UAE in general is now the opposite of a hardship post - something once used to justify higher salaries.

Expo Action

2021 was the year, finally, that the Expo opened. That Dubai managed to open the Expo gates eighteen months after the first Covid case in the Emirates, and more importantly to keep those gates open, is a testament to its ability to rise above the laws that govern the rest of the world and reshape them to meet its own needs. 

Still, even Dubai could only do the Expo 12 months later than expected, and there's no doubt in the years immediately before, that Expo fatigue had crept in (although we did see something of an uptick last year). Would it really make that much of a difference? Was it all a lot of fuss over nothing? Would anyone even come!?

Now of course we know people will come, Covid or no Covid. The Expo ground is packed at weekends, and even busy during the week. At the end of December 2021, over eight million visitors has made their way to the Expo site. No one could say it has not been well attended. Most importantly, however, it appears to have had a real impact on the economy too.

When we asked for your opinion on the Expo's impact on the economy last year, your answers were based on gut feel. This year, you may not have the data of the UAE central bank, but you can see the businesses around you, have heard stories about recruitment and contracts won, and can see activity levels returning to pre-Covid levels. Many of you have benefitted personally from this (see the employment and money sections below).

No wonder over 50% of you say the Expo has given you a great deal more confidence in the economy, well up from the 34% in 2020, and 16% in 2019.  The Expo has clearly fuelled the UAE economy in the short term since its launch. Whether it will deliver the long term transformative advantages its architects hope for remains very much to be seen. 

Innovative, surprising

At the end of December the UAE announced that it would change its weekend, to better align the Emirates with the rest of the world. The move surprised pretty much everyone, as much for the short lead time as much as the move itself. The UAE had traditionally had a Thursday, Friday weekend, in line with the Gulf region until 2006 when it changed to a Friday, Saturday weekend. It has now moved to half day Friday (for the government at least, in time for prayers), Saturday and Sunday. That means the UAE is now out of synch with the rest of the GCC, but in line with pretty much everywhere else in the world.

An overwhelming percentage of respondents see the value in the move, with 87% of residents saying it will be better for the economy. Interestingly, there is a lower percentage that have bought into the change emotionally. A total of 81% of respondents said the change made them feel "happy", while 19% said the change made them "anxious". The key to bringing the whole community on board will be how well the private sector marries its material needs with the more spiritual and emotional ones of its work force. 

Clouds on the horizon

Against the backdrop of the Covid-19 pandemic, the UAE has done an impressive job raising standards, happiness and hope, but of course that does not mean it is all plain sailing from here. In fact, the world economy, after the binge spending of the last 18 months, is likely to face a rather large hangover as interest rates rise, and household budgets are squeezed. The UAE, one of the most open economies in the world, is not going to be immune to this.

On the chart above left (move the central bar to to the right to see it in full) we have picked the three concerns we think are the most important going forward. The full set of concerns may be found on the right. In both charts you can see the changes going back to 2014.

Job security remains the single biggest issue, but as a concern its importance has been dropping since 2018 when it hit a high, cited by 29.84% of respondents. The UAE economy grew by just 1.7 percent in 2018, while Dubai grew by 1.94 percent, its slowest pace since a contraction in 2009 as a result of a debt crisis. A still sizeable 21% of respondents cited it as the single biggest issue in 2021, down from 24% in 2020. 

Rising in importance is the worry over cost increases. Fears over rent rises had almost disappeared in 2020, when the concern was highlighted by just 1% of respondents. It's back to 10% in 2021, still a way down from the 28% that cited it as their single biggest concern in 2014, but clearly headed in the wrong direction (for tenants at least!). 

Worries over "rising prices in general" have also hit an all time high, cited by 12% of respondents as their single biggest issue. Given the relaxed monetary policies of the last eighteen months, impending rate rises, coupled with the inefficiencies caused by global logistic issues, this is an issue likely to get worse before it gets better.

A positive summary

As we noted at the beginning of this story, it is not how well you're doing, but how well you're doing against others. There is no argument UAE has played its cards well through Covid, locking down quickly, but opening up again even more so - as it has suited its economy. With the incredible speed at which the population has been vaccinated, and the high percentage of testing, businesses and the residents that man them, for the most part, have been able to find their path though 2021 relatively well.

The coming year will continue to be challenging, but those that have lived in the Emirates for any time, know that the fleetness of foot shown last year is not a one off. The country is a master at spinning on a dime and turning threats into opportunities. Provided it retains mastery of that rather enviable skill, the country should continue to pull ahead through 2022 - and beyond... 

This article has been written with the help of EdStatica.com, our new data insights tool for the education sector. You can find out more here.