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

The government plans to evacuate thousands of Indian workers who have lost their jobs in Saudi Arabia and cannot afford to pay for a flight home.

india Updated: Aug 01, 2016 17:34 IST
Jayanth Jacob
West Asia

The government plans to evacuate thousands of Indian workers who have lost their jobs in Saudi Arabia and cannot afford to pay for a flight home.(Shutterstock/Representative image)

The government plans to evacuate thousands of Indian workers who have lost their jobs in Saudi Arabia and cannot afford to pay for a flight home. External Affairs Minister Sushma Swaraj said Monday the government is trying to arrange exit documents for those workers who wish to return to India. The workers were mostly employed by Saudi construction companies and were laid off amid a slowdown in the industry caused by low global oil prices. About 10,000 Indian workers in Saudi Arabia have lost their jobs.

The plight of the laid-off workers was raised by lawmakers in India’s Parliament on Monday. Indians are among millions of poor Asians working in the Gulf states, where human rights groups say many suffer exploitation and abuses including non-payment of wages, with no channels for redress.

In March, a special report in Hindustan Times had warned that the Gulf dream was becoming a nightmare for thousands of Indians who work in the region or are dependent on remittances. A recap of our report:

Falling oil prices and a flood of cheap labour from other countries is turning sour the dreams of millions of Indians in the oil-rich Gulf and threatening to choke the stream of remittances their families depend on.

Money or dignity: The dilemma of Indians in the Gulf

Fewer Indian workers are travelling to the Gulf, stung by practices such as nitaqat (employing local people), cheap migrant labour from countries such as Bangladesh, stricter crackdown on illegal workers and a slump in the once-booming construction sector.

Raging conflict in neighbouring countries such as Yemen, Libya, and Iraq is also contributing to the problem.

And the worst may not be over yet for the seven-million strong Indian diaspora and their families in states such as Kerala that draw a major chunk of revenue from remittances, say experts.

The crisis is hurting employment prospects for Indian emigrants such as Neha D’Souza*, who has been looking for opportunities in Dubai for a month.

“I still haven’t found a job. My cousin, who works in that country, said the job scenario in Gulf countries is really bad at the moment, and people are being laid off. In fact, my cousin is also planning to come back,” she said.

The job squeeze is triggering a rise in cases of Indians duped by unscrupulous job dealers in the six Gulf Cooperation Council (GCC) countries — Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Oman and Qatar.

“Some of us are forced to send back families due to economic reasons and losing jobs for many of us have become a reality,” said Prashant G, who works in an oil firm in Bahrain.

Amit Desai* moved from Bengaluru to Saudi Arabia just a year ago but is disillusioned with falling subsidies and a burgeoning local young population replacing outsiders in jobs.

“With oil prices falling by 70% in two years, revenues in Gulf countries have fallen, forcing governments to slash budgets and generous subsidies. With the geopolitical situation worsening, many governments have scaled up defence spending,” said Desai.

“If oil stays at such levels, the situation looks grim for expats.”

The crisis has serious implications for India, the largest recipient of remittance in the world and the biggest exporter of manpower to Gulf nations for decades.

Govt plans to evacuate 10,000 laid off Indians in Saudi amid food crisis

“The Gulf countries account for more than 50% cross-border remittance. More importantly, those who work in Gulf send back almost all of their savings back home. A fall in remittance from these countries will have larger implications back home,” said an Indian diplomat.

Driving the slump is an oil glut that has pushed down prices to around $40 a barrel, the lowest in two decades. This has come at a bad time for Gulf countries that have been trying to diversify but are still heavily dependent on oil.

“My parents just moved to Dubai, and only in the third month my mum faced a cut in her salary. The company claims she will be reimbursed next month but I’m not sure how true that is considering the scenario,” said Shamak Irani*, a Mumbai-based writer.

“It won’t be long before they reassess their situation and maybe move back to India.”

There have been other reports of job cuts, shelving of expansion plan by firms and pruning of perks. A Qatar state company had cut 1,000 jobs though many found jobs elsewhere, the Parliament was told last session.

“We often get complaints about non-payment of salaries these days”, said an Indian diplomat in a Gulf country.

India retains the top slot in receiving remittance but the flow of money is stagnating.

In 2014-15, the remittance was $69.8 billion against $69.6 billion a year ago. Any stagnation or fall in remittance from the Gulf doesn’t augur well for India, considering the remittances from United States and Europe don’t look encouraging.

“What we witnessing is an alarming scenario for the Indian migrant workers. They are at the receiving end due to cheaper labour from countries like Bangladesh, slump in the construction sector, and lack of any booming economic activity in the Gulf region,” says Ginu Zacharia Ommen, honorary associate, Centre for International Migration, University of Poitiers, France.

He says the worst is yet to come. “The larger question is how Indians are losing out on the job pie in Gulf to others.”

The six countries account for around 96% of the annual labour export from India. Last year, 781,000 Indian workers migrated abroad as against 817,000 in 2013, shows external affairs ministry data.

“The jobs are shrinking in Gulf. But the Indians taken for a ride by the employers for non-existent jobs are also going up, calling for a course correction from all those concerned,” said Kundan Srivastava, an activist.

* Names have been changed.

With inputs from Aayushi Pratap in Mumbai

(This story was first published on Mar 27, 2016.)