A report by the Hay Group on world pay, surprise surprise, concludes that the Middle East tops the world in terms of disposable income because of the region’s economic boom and the absence of income tax.
This has serious implications for the chemicals industry in it’s desperate battle for talent in a very tight recruitment market.
For every dollar of guaranteed cash that a senior manager earns in the United Arab Emirates, his counterparts in Singapore and Malaysia earn only 74 and 34 cents respectively In Indonesia, the manager will earn only 17 cents for the same job!
Chemical industry employees have obviously followed the feedstock advantage. But what’s going to happen if gas supply for petrochemicals remains constrained in the UAE? Could we see a reversal of the brain drain?
And if the likes of BASF and Dow Chemical are successful in their search for alternative methods of making basic petrochemicals, could we see a realignment of pay rates?
High energy costs and global or regional prices on carbon emissions could also change the renumeration landscape.
Retailers in the West have already started to source more goods from local suppliers because of high transportation costs.
If you can make olefins from the Fischer Tropsch process (and there’s a price on carbon) the obvious extension of this is that you could build new chemicals plants in, say, Germany to supply downstream industries benefiting from reverse-gear globalisation.
But you would also have to take into account Europe’s ridiculously high tax rates (one of the reasons I quit Britain!)