We are now graduating students from universities that are spenders not savers and who will become public employees rather than work in the private sector so the whole culture has to be changed.
Mohammed Qasim Al Ali, chief executive of UAE-based National Bonds, a leading Shariah-compliant savings scheme in the GCC, on tackling the poor saving habits of Gulf residents.
His comments come on the heels of the 2011 National Bonds GCC savings index, which found that 68% percent of the 1,107 respondents polled in Saudi Arabia, Kuwait, Oman, Bahrain and Qatar admitted their savings are less than originally planned and 64 percent said they save less than a fifth of their earnings.
According to the index, Qatar had the highest percentage of respondents who saved less than last year at 28 percent, it also has the highest percentage of respondents, 29 percent, who saved more.
The National reports:
Mr Qasim Al Ali attributes Qatar’s poor saving habits to the nation’s excessive wealth, love of luxury goods – 19 percent of Qatari respondents admitted spending more on luxury items – and the government’s recent pay increases…
“The Qatari government is sharing the wealth with the citizens, but it might lead to inflation later on because there is more money to spend. Qataris should be the highest savers in the GCC but unfortunately they are not,” he says.
“This is one of the root causes of the lack of savings culture in the GCC because people are looked after by their governments with free education, free hospitals and no taxation. All of these contribute to people depending on third parties whether it’s their parents or the government and they get locked into their living standards.
Once they’re locked in, it’s difficult to let go of the nice things they have so going out twice a week to a restaurant and impulse buying at the mall becomes a habit.”