The recent crisis in Saudi Arabia, wherein thousands of Indian workers lost their jobs when their employers suddenly shut shop, higlights the many challenges that emigration poses to the Indian Government and economy
Development is dicey. Small change in policies or a global shift in any area can cause turmoil. The hiking petroleum price by producing nations itself had caused upheaval and as different energy sources are now being developed, it is leading to an Arabian night. The boom, world did not realise, was artificial and not sustainable for long. The price crash was inevitable causing miseries to the workers in West Asia.
India is going through tough times. The Union Government had to come to the rescue of workers a number of times during the two decades — right from the invasion of Kuwait by Saddam Hussein in 1991. It is humanitarian issue. The Government has organised many such rescue missions. The Indian Navy, the External Affairs Ministry and the Government in its entirety have rescued not only Indian nationals but also citizens of over 26 countries in various conflict situations.
It has raised many questions as well — Some going to the extreme of the Government getting into such rescue missions to the failure of the Government in ensuring proper working conditions in various Gulf countries, preventing their exploitation, humiliation, extortion and the worst conditions they have to face. Others want an end to their countrymen going to do menial jobs like domestic chores, baby sitting and cleaning jobs, particularly in the sheikhdom.
The recent crisis in Saudi Arabia, where 25,000 workers were given exit visas has accentuated the problem. About 10,000 of them have to be evacuated immediately. Many of them do not have money to buy food. The visit of Minister of State for External Affairs VK Singh has led only to partial solution like some of them being allowed by the Saudi Government to move to other companies, which was
banned earlier. .
Media is agog with stories of their miseries, including death penalties on the silliest grounds. The Government has to spend a lot of its diplomatic skills, sometimes even large "ransom" monies and other heavy expenses for humanitarian reasons and to prevent a political fall-out.
India as of now can hardly do without remittances. An International Monetary Fund report says India was the largest remittance-receiving country, with an estimated $72 billion in 2015, followed by China ($64 billion), and the Philippines ($30 billion). If informal channels like hawala are included remittances could be 50 percent higher, the report says. Official world remittances total $334 billion.
Remittances, the IMF says, are free-flowing money without strings. It keeps forex kitty high particularly as exports thaw. It is not volatile as FDI or portfolio investments. “In 2009, remittances to some countries were as large as FDI and helped reduction of poverty of the recipient families”, says IMF.
There is a disadvantage. Such large remittances add to inflation and erode rupee. The United States was the largest remittance source country, with an estimated $56 billion in outward flows in 2014, followed by Saudi Arabia ($37 billion), and Russia ($33 billion).
That is the catch. Remittances to India is not coming only from the Gulf but it is also coming from the US, Europe, south-east Asia and even Africa. How can India stop emigration without providing jobs in homelandIJ It would not be possible till Indian economy attains such resilience. Once it achieves that it should prepare also to become a remittance source, as it observing itself becoming for low-paid jobs largely to some of the neighbouring countries.
Should we stop emigration to such countries, where Indians are treated like slavesIJ That is the solution according many people, including some External Affairs Ministry officials. People from States like Kerala and Punjab happen to be the largest sufferers.
This is also true that their toil has boosted the economies of their home States. There is concern in Kerala as Gulf remittances subside. Even high skilled workers in the Gulf are being gradually nudged out. One reason is the locals are replacing many of them. Since 2014, remittances inflow started faltering; it has since dipped by over Rs 23,350 crore in 2015 (World Bank).
But stopping emigration is not a solution till the country can create jobs in large numbers. The Manmohanomics of 25 years only led to shrinkage of jobs despite increase in investment. The new Modinomics is only two-year old and aims at creating jobs through make in India, skill India, MUDRA bank, and many other programmes. The economists are keenly observing how these programmes function and create jobs in the coming years.
The policy planners tend to believe that situation is changing. Apparently the government is taking steps. Creating jobs, however, is not easy. Most of the programmes would take time to yield result.