Take layoffs of Indians in the Gulf seriously or brace for the worst

There should be no blame game. The Centre cannot neglect the demands of states.

 |   Long-form |   01-04-2017
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Prime Minister Narendra Modi has sought to strengthen India's ties with GCC Countries with a special focus on UAE and Saudi Arabia.

While the PM visited UAE in August 2015, he visited Saudi Arabia in April 2016, and Qatar in June 2016.

Modi has sought to de-hyphenate India's relationship with GCC countries from its ties with Iran and Israel.

Though it is significant to note, that he will be visiting Israel only after having completed three years in office.

It is not just the PM who has reached out to GCC, but there have been a number of ministerial visits by both minister of external affairs, Sushma Swaraj as well as minister of state for external affairs, MJ Akbar.

There have also been high level visits from GCC countries.

The chief guest for India's Republic Day 2017 was Abu Dhabi Crown Prince, Sheikh Mohamed bin Zayed Al.

pinari-vijayan.jpeg_040117034159.jpg The Kerala CM also said that the state government would work jointly with the Centre to ensure workers do not get duped by dubious companies and fraudulent recruiting agents. Photo: PTI

While speaking at the inauguration of the Global Organisation for People of Indian Origin (GOPIO) minister of state of external affairs, MJ Akbar while citing the example of Saudi Arabia, drew attention to the relevance of high level engagement between both sides.

"Through exchange of visits at the highest level, we have forged an irreversible partnership with Saudi Arabia, the benefits of which are evident and will grow in the coming years. We have signed a framework agreement with Saudi Arabia for an investment of $1 trillion in infrastructure development over the next five years."

There are a number of reasons for this change

First is the support which India has been receiving from GCC, especially with regard to terrorism emanating from Pakistani soil, not just in the past three years but even before Modi took over.

Saudi Arabia extradited Abu Jundal who belonged to the Indian Mujahideen and was a handler for the terrorists who carried out the dastardly 26/11 attacks, in June 2012.

Joint statements during PM Modi's visits to UAE and Saudi Arabia, made references to terrorism.

GCC countries including UAE and Saudi Arabia criticised the Uri Attack in September 2016 which killed 17 Indian soldiers.

The foreign ministry expressed the Kingdom of Saudi Arabia's strong condemnation and denunciation of the terrorist attack that targeted an Indian military base in the Uri area of north Kashmir, killing and wounding dozens.

Needless to say, the foundations for strategic cooperation between India and Saudi Arabia have been laid over time. The New Delhi declaration signed in 2006 during the visit of King Abdullah bin Abdulaziz Al Saud to India and the Riyadh Declaration signed in 2010 during former PM Manmohan Singh's visit to Saudi Arabia made clear references to strengthening the cooperation.

The New Delhi declaration stated:

"Terrorism is a scourge for all mankind and there is a need to intensify and coordinate bilateral, regional and global cooperation to combat and eradicate the menace of terrorism... The two countries shall make concerted efforts for an early realisation of the proposals to conclude a Comprehensive Convention on International Terrorism which is before the UN General Assembly, and the setting up of an InternationalCounter- Terrorism Centre as called for by the International Conference on Counter- Terrorism held in Riyadh in February 2005..."

The Riyadh Declaration made a more explicit reference to terrorism and about taking cooperation forward:

"The two leaders renewed condemnation of the phenomena of terrorism, extremism and violence affirming that it is global and threatens all societies and is not linked to any race, color or belief. The international community must, therefore, resolutely combat terrorism..."

They welcomed the signing of the Extradition Treaty and the Agreement for Transfer of Sentenced Persons.

During King Salman bin Abdulaziz Al Saud's visit to India in February 2014 as Crown Prince, Deputy Premier and Defence Minister of the Kingdom of Saudi Arabia, an MOU for strengthening Defence Cooperation had been signed.

While during PM Modi's visit to Saudi Arabia, his joint statement with Custodian of the Two Holy Mosques His Majesty King Salman bin Abdulaziz Al Saud, spoke about not just extending defence cooperation and bilateral cooperation for strengthening maritime security in the Gulf and Indian Ocean, but also about deepening cooperation at multilateral forums.

Any effort to link terrorism with any specific religion was also criticised in the joint statement.

In addition to the strategic aspect, there is a realisation that India's relationship with GCC (especially Saudi Arabia) should move beyond the buyer and seller relationship of oil.

MJ Akbar, in his inaugural address at GOPIO, made this point:

"Our friendship with the Gulf has been put on a remarkable positive track: the traditional buyer-seller relationship in oil between India and the GCC countries is changing. Today, Gulf countries are investing in our strategic petroleum reserves. There is excellent cooperation when we seek to resolve the many issues faced by our nearly 8 million brothers and sisters living and working in these countries."

While it is true that there are some compelling reasons for the strengthening of ties between India and GCC, the layoffs of Indian workers in the Gulf are likely to not pose a challenge to the bilateral relationship, but could hit a few states and India should be prepared.


India heavily depends on remittances from the Gulf. According to The World Bank, in 2015, the remittances were $69 billion. 40 percent of the remittances India received that year were from workers in the Gulf. There are about six million Indian workers in the Gulf, of which three million are estimated to be in Saudi Arabia as of 2016.

During his visit to Saudi Arabia in 2016, Modi had addressed workers of Larsen and Toubro (L&T) at their residential complex. "It is your sweat and toil that has brought me here," the PM said.

Decline in migration - recent studies

Of late, there has been a significant dip in the number of Indian workers being employed in Saudi Arabia and other GCC countries.

Pakistani and Bangladeshi workers have benefitted at the cost of Indian workers, especially in Saudi Arabia since Indian workers demand a higher monthly salary, as reported in the article How India's recent migrant policies helped Bangladesh and Pakistan eat into our GDP in Outlook.

The government of India introduced a computerised system called "e-Migrate" for safeguarding the rights of blue-collared workers owing to complaints of ill-treatment and exploitation by employers.

According to the Outlook report, there are a number of stakeholders in the process and employers find this complicated; as a result, they prefer workers from Pakistan and Bangladesh.

There is a major dip in migration of workers between 2015-2016 to not just Saudi Arabia, but also UAE and Qatar.

Though the number of workers migrating to Saudi Arabia has witnessed a massive decline, according to official figures, it reduced from over 3,00,000 in 2015 to around 1,65,000 in 2016.

In percentage terms, the downfall was even more in the case of Qatar (nearly 60,000 in 2015 to a little over 30,000 in 2016).

Official response

In July 2016 itself a number of Indian workers were laid off, and were facing a food crisis. The external affairs minister, Sushma Swaraj tweeted, "Large number of Indians have lost their jobs in Saudi Arabia and Kuwait. The employers have not paid wages [and] closed down their factories."

General VK Singh, MOS, external affairs, visited Saudi Arabia in August 2016 and met the workers who had been laid off.

Singh raised a number of issues with Saudi authorities; payment of dues to workers who were keen to return, finding other avenues of work for those who were keen to stay back, et al. The Saudi Arabia's ministry of labour then set up a committee to address the labourers' issues.

4,830 workers had returned home as of February 2017, said General VK Singh in a written reply to the Rajya Sabha.

India's strategy

India needs to think about the long-term implications of these layoffs, and work jointly with state governments that are going to be affected by this problem. Fire-fighting is just one aspect.

It is especially important for the states that are likely to be affected by these layoffs to come up with a comprehensive strategy.

Impact on states

It is not just Kerala where remittances from Gulf countries account for more than one-third of the state's GDP, whose economy is dependent upon migrant workers.

For the year 2015-2016, Kerala's GDP was below the national average as a result of the layoffs of workers in the Gulf.

In fact, other states like Bihar and Uttar Pradesh will also suffer.

According to the Protectorate General of Emigrants (PoE) for the year 2016-2017, the state of Bihar contributed nearly one-sixth (15 per cent) of the total emigrants from India.

Uttar Pradesh, the most populous state of India, contributes (30 per cent) workers to the Gulf. Kerala surprisingly accounted only for 6 percent of the force.

The central and state governments should work closely to address the immediate challenges and set up an organisation to suitably rehabilitate the workers, and look for avenues for their employment in India.

The Kerala government took the lead in training some of the workers in English, information technology and Maths so as to help their employment prospects.

An entrepreneurship fund that encourages the workers to set up their own ventures, based on their skill sets, would also be helpful.

During his visit to UAE in December 2016, Kerala chief minister Pinarayi Vijayan also announced a six-month compensation package for Gulf returnees.

The Kerala CM also said that the state government would work jointly with the Centre for ensuring that workers do not get duped by dubious companies and fraudulent recruiting agents.

As layoffs of workers from the Gulf is not just an issue pertaining to remittances or the state of Kerala, and demonstrably impact three to four states, a cohesive and comprehensive strategy is required to deal with this challenge.

This is a serious issue and there should be no blame game and neither should the Centre neglect the demands of states.

If New Delhi and Kerala can work together, it would be the best example of cooperative federalism.

It is important, however, to de-hyphenate these layoffs from the larger relationship with the Gulf.


Tridivesh Singh Maini and Sandeep Sachdeva

Tridivesh Singh Maini is a New Delhi based Policy Analyst associated with The Jindal School of International Affairs, OP Jindal Global University, Sonipat. Sandeep Sachdeva is an Independent Policy Analyst and graduate of The Jindal School of International Affairs, Sonipat.

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