Finding the trigger: Cheaper oil, job plan brought in Saudi job crisis

  • Jayanth Jacob, Hindustan Times, New Delhi
  • Updated: Aug 02, 2016 15:25 IST
Saudi Arabia hosts three million Indians, who come from all over the country – Punjab in the north to Kerala in the south. (Reuters File Photo)

For years, Saudi Arabia has been the dream destination for Indian migrant workers but that may be changing.

Minister of state for external affairs Gen VK Singh is headed for the Gulf country where around 10,000 Indian workers are facing a food crisis after being laid off. The minister is expected to make arrangements to bring back those who want to return.

Home to the largest migrant population in the Gulf region, Saudi Arabia hosts three million Indians, who come from all over the country – Punjab in the north to Kerala in the south.

When the country launched an employment nationalisation programme in 2011, the Indian government, like other, hoped the ambitious plan that aimed to give priority to local youth wouldn’t hit migrant workers.

Read| How oil crash, failing job market are ruining India’s Gulf stream of cash

The reason: The local population would not take up jobs favoured by a large section of Indians, employed as construction workers, taxi drivers and even vegetable vendors. And, construction workers accounted for almost 45% of Indian blue-collar migrants.

There were other arguments as well.

The “Saudisation”, as the plan has come to be known, wouldn’t hit small enterprises that employed 25% of the foreign workers. Around 55% of the migrants worked in the industries that complied with the employment quota prescribed in the job plan.

But, that is not how it played out.

The slide in crude prices and Saudi Arabia’s attempt to expand the economy beyond the oil sector didn’t work and failed to create the much needed jobs.

Construction projects, mostly funded by the government, are worst hit as the government battles fund crunch brought in by low oil prices. A number of firms have shut down, leaving thousands of workers jobless who don’t have the money to buy food or a ticket home.

Cheap oil combined with nationalisation programme have dealt a blow to the country, where 70% of the population is under 30 and unemployment rate in the 16-25 age group is 29%.

These realities have created a situation that policy-makers didn’t anticipate: Saudis working as salesmen and women for mobile firms, serving Starbucks outlets and driving taxis. Saudis are taking up these “menial jobs” as the government freezes hiring, leaving fewer jobs for migrants including thousands of Indians.

Read| Is India prepared for the returning NRIs?

Read| Money or dignity: The dilemma of Indians in the Gulf

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