GS-2, International Relations, Uncategorized

Hardship of Indians in the Gulf

Issue

With the fall of oil prices, economy of the Gulf nations has slowed down. It resulted in the loss of jobs of several thousands of Indian workers in Saudi Arabia, Kuwait and many other countries. The condition is so bad that Indian Consulate is distributing food to these people.

Reasons for the Economic Hardship

It was a well anticipated development in the wake of historic fall of oil prices. Saudi economy which depends on oil export, suffered a great deal. It affected every aspect of Saudi economy particularly construction sector.

Saudi economy is in dire straits. They are drawing from their reserves. IMF has given caution about Saudi economy. Their credit ratings have been revised downwards by Moody’s and others.

Saudis defence expenditure in Yemen, Syria and elsewhere is mounting. They have challenges on all fronts. Their huge reserves of Sovereign wealth funds can last for 5 to 6 years.

According to analysts, $70 per barrel will give a budgetary balance in Saudi Arabia.

Pharmaceutical industry is still in an early stage. 90% of the economy is dependent on oil.

So much oil is available in other countries. Iran, Iraq, shale oil, and new sources of oil is emerging in many countries.

Indian Government response

India has 3 million workers, working in Saudi Arabia, most of them being skilled and unskilled workers. construction sector was badly affected, which resulted in job loss of many Indians. The Indian government is planning to send Minister of state for External Affairs – General V K Singh, to bring them back in orderly manner.

External Affairs Ministry has appealed to Indian community to help the fellow Indians and asked the Indian Consulate to ensure that no Indian remained without food. This is very challenging task, given their number, logistic and their needs.

Indian community has always risen to the task in Middle-east. Earlier in Kuwait in 1991 evacuation, and during various other times. Next challenge is to get them back to India. Saudi Arabia has a very rigid system of Exit Visas, clearing all their dues and exit formality.

The Hajj flights are going to Saudi Arabia where thoudands of piligms travel and the flights will travel back empty. The Indian people can be brought back in these flights for low cost.

Challenges for Indian Government

The task for the Indian Embassy is to arrange for the wages for these people once the construction activity recovers and company gets money. It is a Diplomatic and Legal challenge to Indian Embassy.

Many of these workers are semi skilled or unskilled. The challenge for the government is providing jobs to these people in India.

Similar situation was seen earlier in UAE, where thousands of workers were sent back to India and their wages were not paid.

Saudi Laws in hiring and firing of labourers.

They have a legal system, except for domestic workers. Domestic workers don’t have legal protection. Saudi Arabia is a member of International Labour Organisation (ILO). Everything is well written on papers. While implementing these laws, it is always biased towards Employers.

Saudi policy does not favour expatriate workers. Local Saudis get more employment at all levels. They call it Saudiaisation.

All jobs cannot be done by Saudis. They need Expatriates for this. There are 3 million Indians in Saudi Arabia. Indians are preferred for several reasons

Hard working, good skills. competitive wage structure and above all low crime rate, discipline and their political nature.

India – Saudi Arabia Ties.

Saudis have succeeded in diversifying their economy. India is a beneficiary by using Saudis Phosphate mines and SABIC (Saudi Arabian Basic Industries Corporation) Saudi diversified manufacturing company, active in chemicals and intermediates, industrial polymers, fertilizers, and metals

There are Indian IT companies in Saudi Arabia.

Saudi Arabia is close ally of India. India has developed strategic ties. our PM was honoured highest civilian award of Saudi Arabia when he visited Saudi Arabia. 19% of crude oil supply to India comes from Saudi Arabia. India and Saudi trade was almost USD 25 billion last fiscal year.

PMs visit to Saudi Arabia yielded extraordinary results. Agreements were made regarding Intelligence sharing on sources of terror financing and money laundering.

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