No way to bridge this Gulf
Migrant workers from India are going to be hit real hard by the Dubai debacle
Sumiran Preet Kaur Delhi
A sudden halt to Dubai's real estate boom has come with the country's defaults on huge debts to global creditors. It has flustered the confidence of the investors across the Gulf region. The government of Dubai on November 25, 2009 said that it would ask all creditors of Dubai World and Nakheel to "standstill" and extend their loan agreements by six months. This revelation sent shock waves to the Sensex world. Stock exchanges all over the world tumbled after this, including Bombay Stock Exchange.
Dubai World is a large government-owned corporation with an enormous portfolio, ranging from interests in ports to property and diamonds, involving thousands of workers and professionals. Its most well-known companies are Dubai Ports World, one of the largest owners of ports in the world, and Nakheel, a property developer that created the swanky The Palm Islands, The World and The Waterfront for the super rich. Also an Islamic bond, known as sukuk, with a face value of $3.52 billion is due to come on December 14.
The reasons of debt are fall in property prices, losses on investments and a credit market crunch due to global recession. The main problem at the moment is that there are no buyers in the market and investors want to avoid risk. This situation has meant that a lot of people have lost their jobs here (and the world over) as companies look to stabilise their losses by cutting costs.
In Dubai there are reports of people running away from debts and other liabilities, leaving their homes and cars. Mass exodus could follow if the economy does not stabilise soon. Consequently many economies including India could be hurt by this.
It has raised serious concerns in India where millions of families across the country are dependent on remittances from the Middle East, especially families from Kerala. More than one-third of the remittances that India receives come from the Gulf region. Other South Asian economies such as Bangladesh, Nepal and Pakistan, which depend heavily on remittances as a source of foreign currency reserves, have been affected. Thousands of skilled and unskilled workers and professionals have been directly impacted in these countries.
Those, who had come back home on holidays, are reportedly receiving the pink slip via sms, with no clear promise of whether their outstanding dues, savings and salaries will at all be paid, and what will happen to their homes and belongings in Dubai. Besides, future uncertainty at a mass level is stalking the people. For instance, what happens to the education of children of sacked fathers, or those who fled, or those in the current exodus? People from Kerela to Meerut in UP are facing the crisis, including the pink slip.
The Dubai financial crisis has fuelled fears among families of over two million migrants from Kerala working in the Gulf, with worries of job losses and its effects on the state's economy which is heavily dependent on remittances. An estimate of the number of Indians in the massive and hitherto booming construction sector in the Gulf region (based on figures supplied by India's Union ministry of labour and Indian missions in that region), would be approximately 3 million. In UAE, 32 per cent of foreign migrant workers are Indians.
Many super rich Indians and celebrities from Bollywood have also invested in the real estate business in Dubai. Filmstar-tycoon, Shah Rukh Khan, had reportedly teamed up last year with Nakheel, the leading property developer in the UAE, to purchase a palatial house on the man-made island of Palm Jumeirah, located off the coast of Dubai.
Hardnews had earlier reported (Fear is forever, March 2009, http://www.hardnewsmedia.com/comment/reply/2717) the crisis stalking migrant workers in the Gulf: "Tougher economic times also mean that construction companies will start cutting on wages and accommodation for labourers, and failing to implement safety regulations. Dubai, the epicentre of the Gulf construction boom, has arguably the worst record in this region on workplace safety, with nearly 900 construction-related deaths recorded between 2004 and 2007.
Nick McGeehan, founding member of human rights group, Mafiwasta, which campaigns for the rights of migrant labourers in the Emirates, had then said that the outlook for working conditions in the Gulf would only get worse as a result of the economic crisis. "Work's going to go, contracts are not going to be borne out, and there will be even less concern for workers' conditions," said McGeehan.
If the scenario in March was so precarious and risky, now it could be catastrophic for migrant workers. The Dubai crash has heightened the turmoil and tragedies in the collective lives of thousands of workers.