Recession jolts Gulf, Indians head home

It’s not quite the end of the petro-dollar dream yet, but hundreds of Indians employed in the Gulf are forced to return home as the global recession hits the region. If the steady trickle of Gulf returnees turns into a tide, India could face a major crisis.

Authorities say the situation at the moment is not alarming, though reports of wage cuts and spiked jobs have been pouring in from the region hit hard by sinking oil prices and tottering construction, real estate and tourism sectors.

 

There are no hard numbers on the extent of the crisis. The Indian embassy in UAE says 20,000 Indians have returned from that country alone in the past four months. But these include those who were anyway planning to return and others coming on leave. ‘‘Some of them have been sent back for the time being and may return soon,’’ ambassador to UAE, Talmiz Ahmed, told TOI. Sources in airlines say, across carriers, there has been a dramatic increase in bookings to India from the Gulf.

 

Of the 5 million overseas Indian workers, 90% have jobs in the Gulf and South-East Asia. Till early 2008, the Gulf was in midst of a construction and realty boom and had been attracting Indian workers. Migrations from India had increased from 4.66 lakh in 2003 to 8.09 lakh in 2007. But things have changed since.

 

There are reports of construction projects coming to a halt across the Middle East. A case in point is the prestigious Nakheel Harbour and Towers in Dubai. Earlier known as Al Burj and expected to be the world’s tallest tower, work on the project was suspended last month.

 

As the recession spreads, also facing the axe are Indian professionals, technicians and low-skilled workers. Even those in sales and marketing have been hurt because they were mostly subcontracted by large companies which now look upon these staff as dispensable.

 

Indian workers in the Gulf contribute nearly 40% of the $27 billion in overseas remittances that come to India — accounting for 3% of India’s GDP. World Bank has said remittances generated by South Asian workers in the Gulf will come down by 9%. If the Middle-East economic crisis deepens, India faces a double whammy of dipping remittances on one hand, and jobless returnees flooding the domestic market on the other.

 

Kerala, of course, is likely to bear the brunt if things go from bad to worse. Remittances earned by Malayalees have fuelled construction, tourism and education in the state. In the past decade, however, many Malayalee emigrants had left the Gulf as labour laws there got harsher and the wage-expenditure mismatch widened. But that doesn’t seem to have dimmed expectations back home.

But to some, the situation is not all that dire. Going by the findings of the Indian embassy in UAE, which accounts for 1.5 million out of the 4.8 million Indian workers in the Gulf, there is no reason to panic. At least not yet. ‘‘As of now, we have found no evidence to suggest largescale departure of Indian workers,’’ ambassador Ahmed said.

 

Ahmed said reports on layoffs in the construction business were highly exaggerated. ‘‘I can say that out of 10 projects, at least five are going ahead. Of the remaining, some are merely on hold. In fact, the overall sentiment is one of optimism as the financial base of the country is sound. That’s true for other Gulf countries as well,’’ he said.

 

Others argue that Kerala is no longer as dependent on remittances as in the past. Researchers Irudaya Rajan and Zachariah call the migration situation in Kerala in the last four years ‘‘immobility in mobility’’. ‘‘The number of emigrants was 18.4 lakh in 2003; it was 18.5 lakh in 2007. The number of return emigrants had been 8.9 lakh in 2003; it was 8.9 lakh in 2007 also,’’ states a study conducted by the duo.