Amid new layoffs each passing day, the evenings at Dubai's Jebel Ali labour camps, home to thousands of South Asian workers, are fraught with economic uncertainty and gloom. Half a dozen migrants gathered recently at a flat to comfort Indian construction worker Sunam Mallaiah, who had just lost his job. Unsure of their own livelihoods, the men were unable to offer words of hope.
Mallaiah went into debt and sold his land in the southern state of Andhra Pradesh to raise 150,000 rupees (3,090 dollars) for a recruitment agent to get him work in Dubai, one of the seven states of the United Arab Emirates. Merely weeks into his 1,600 dirhams-a-month (436-dollars-a-month) job, the 30-year-old's dreams of a better life for his wife and child back home have faded away.
With the building boom going bust after the global economic downturn hit the region, older workers like Bangladeshi Shahjehan Alam are worried about their friend. "He is mostly quiet, troubled about how to return home with debt and an empty pocket," Alam said in a telephone interview. "We fear he might commit suicide."
India's Overseas Affairs Ministry insists the situation is not alarming, but reports of job losses and wage cuts have been pouring in from the United Arab Emirates and Bahrain, which have been hit by a combination of a slump in oil prices and a downturn in the construction, real estate and tourism sectors because of the global slowdown.
There are 1.8 million Indians in the United Arab Emirates and 400,000 in Bahrain, accounting for about half the 5 million Indian workers and managers in the Gulf region. Indians have been affected to a lesser extent in other Gulf countries such as Kuwait, Oman, Qatar and Saudi Arabia.
Although there are no exact figures, the Indian consulate in Dubai has said construction firms there had bulk-booked planes next month to fly 20,000 to 30,000 workers back home on long leave or to redeploy them on projects in other Gulf nations like Qatar. According to unofficial estimates, Andhra Pradesh has seen thousands returning to their homes in the northern Telangana region over the past few months while Kerala, another southern state that sends huge numbers of workers abroad, is reporting 150 returns a week.
White-collar Indian professionals and technicians are facing the axe too. The spate of job losses is mostly in the financial and banking sectors and hotels. Those in sales and marketing are also regarded as dispensable. "Four of my friends from the finance sector and hotels were fired overnight from their jobs though they were very good professionals," an Indian executive with Emirates International Telecom said.
"With several firms going in for cost-cutting, people are being hired at lower wages. Others are forced to return as their salaries do not support their stay anymore." "Till 2008, the Gulf was witnessing realty and construction booms and attracted workers in droves," KV Shamsuddin, who heads an Indian welfare organisation in Dubai, said by telephone. "But now, 260 billion dollars worth of real estate projects are reported to have been delayed or shelved in the UAE."
According to workers, property giants like Nakheel, Damac, Emaar Properties PJSC and al-Shafar have laid off thousands of workers over the past few months. "Some companies have sent them back on leave without pay while a few even use the lottery system for terminating services," Alam said. Concerned that a wave of redundancies could translate into a crisis, the Indian government is keeping a close watch.
But although the situation is dire for the overseas workers, the lack of jobs in the Gulf is not expected to have a major effect on the Indian economy overall, Overseas Affairs Ministry spokesman Akshay Rout said. Indians, comprising 38 per cent of the 13 million expatriates in six Gulf countries, contribute more than one-fifth of India's total overseas remittances, which constitute 3 per cent of the country's gross domestic product.
Migration to the Gulf region, which employs the largest number of Indians outside the country, has helped countless thousands of Indian families avoid poverty in the past decade. Remittances have driven construction, tourism and education in states like Kerala and Andhra Pradesh.
"Layoffs, especially in the construction sector, are likely to have serious economic repercussions for households in India as many depend on remittances," said Avijit Nanda, president of TimesofMoney, a leading Indian online payment-service provider.
"Since January, there have been appeals by the diaspora for financial help and starting rehabilitation and re-employment schemes," an Overseas Affairs Ministry official said on the condition of anonymity. "Although I will officially tell you there is not much to worry about, we are anxious as this is going to turn worse in the coming days."