GULF OF GLOOM

INDIA TODAY

Gulf of gloom

M.G.Radhakrishnan
February 26, 2009

Sakthikulangara literally means the coast of strength. For a decade and more, the well-built, skilled young fishermen of this tiny fishing hamlet on the Arabian Sea coast in Kerala’s Kollam district were priced workers in a string of super luxury construction projects in Dubai.

The fairy tale projects included the multi-billion dollar World Island, consisting of 300 private luxury islands spread out in the shape of five continents, and the stunning Palm Islands.

European contractors and marine dredging companies hired these young men from Sakthikulangara to Dubai to work on the reclamation work not only because they cost less than the Russian and East European deep sea divers, but they didn’t need diving gear, including oxygen cylinders.

In recent months, these young men of Sakthikulangara have had their livelihood taken away. Since the beginning of the year, more than 1,000 persons have returned from Dubai to Sakthikulangara, their jobs lost, some believe for ever. Most of the projects have come to a screeching halt due to the global recession and drastic fall in oil prices.

The European dredging companies which had hired them stopped work indefinitely as payments due to them from contractors had stopped.

“The company said it will call us when the work begins again. But nobody knows when that will be,” says Joy William, a 40-year-old quality assistant with a Belgian company working at the Palm Island project in Dubai, which boasts of investment by some of the biggest names in Bollywood.

These men were contracted at 20 dirhams (Rs 200) an hour but didn’t mind what they got in hand after the middlemen took their share, only half.

“We worked about 12 hours a day and even on public holidays including Fridays and made up to Rs 75,000 a month,” says Rajan Nepolean, another native who lost his job due to this sudden downturn.

Real estate projects by the corporate construction giant Emaar (which is building the world’s tallest building—the 2,684-foot Burj Dubai—and the new Downtown Dubai) too have been put on hold, forcing hundreds of South Asians, mostly Keralites, to return to their home countries.

According to Morgan Stanley, around $263 billion worth of real estate projects in the Gulf countries are either delayed or have been cancelled since last November.

Many of these jobless men who have returned are now working as fishermen for a paltry Rs 250 a day; others loiter around the local church and beaches.

“I am working as a coolie making Rs 150 a day now as I have no savings to take care of my expenses,” says 31-year-old Jose Henry, who was earlier employed by a Dutch company in Sharjah.

Most of the people in Sakthikulangara have completed school education but are not trained for anything except fishing-related jobs. “In the days to come, this place will face serious economic and social repercussions with the increasing return migration.

The local fishing industry which faced a serious shortage of labour after young men left for the Gulf will now look up,” says John Cyril, a lawyer.

It’s a problem that is likely to affect not just this little village but all of Kerala in the near future. More than 20 lakh emigrants from Kerala work abroad with 90 per cent of them in the Gulf region, accounting for 25 emigrants per 100 households.

More than 60 per cent of these non-resident Keralites hold blue-collar jobs, and their annual remittances to their families in Kerala have crossed Rs 40,000-crore mark, twice the state’s total tax revenue annually.

The state also accounts for more than a quarter of NRI remittance to India. “We could end up with half-a-million Malayalees coming back in the months to come. There could be an exodus next month after the schools close,” says Thomas Isaac, state finance minister, who announced a Rs 110-crore rehabilitation package for the returnees last week.

Union Minister of Overseas Indian Affairs Vayalar Ravi, who also hails from Kerala, has told India Today that he has taken up with the Prime Minister the need to formulate a comprehensive package to rehabilitate the returnees.

“There is a great dip in employment opportunities there. The number of group visas issued to Gulf countries by the External Affairs Ministry fell from 2,286 in January 2008 to just 265 in December,” he said.

The Pravasi Malayali Welfare Association says that on an average 300 people return to Kerala daily. According to the state Government’s Overseas Development and Employment Promotion Consultants (ODEPEC), there has been a considerable drop in the number of visas issued.

“There is a 50 per cent drop in the job visas issued from the Gulf and passenger traffic to that region since December,” says K.V. Muralidharan of the Kerala Travel Agents Association.

Pathanamthitta district, which has a large number of its populace settled in the Gulf and the US, is also feeling the tremors of the meltdown.

“There is panic all over. Real estate prices are crashing. Many of those who had taken loans from banks here to start businesses in Gulf have delayed repayments. There could soon be suicides similar to those of the farmers,” says George Mathew, manager, Federal Bank, in Tiruvalla, a town which has the country’s highest density of banks and ATMs.

“Not just blue-collar construction workers but even middle-class employees in banks have lost their high-paying jobs in the Gulf. Left with few options, they came back to their native places,” he says. Most organisations had cut salaries and also disallowed overtime work, much favoured by emigrants, forcing them to head home.

There has been a spurt in NRE deposits in past months, mainly on account of the transfer from overseas banks after many foreign banks faced collapse and also the rise in the value of dollar. The NRE deposits in Kerala banks which were Rs 31,865 crore in June 2008 are expected to cross Rs 35,000 crore by June this year.

There is a huge rush for seats in schools from non-resident Keralite families as many plan to return for good after the academic year in their children’s schools is over there.

“All the seats for the next academic year beginning in June have been reserved by the end of January. This has never happened before,” says Fr. Thomas Madakkal, principal of a local school in Pathanamthitta.

Non-resident Keralites are peeved at the state and Central governments for their lack of sincerity in grappling with this issue.

“Both the state and Central governments do only lip service to the non-resident population. The rehabilitation package announced by the state is far from adequate,” says K.K. Sarachandra Bose, a corporate lawyer in Dubai.

According to him, the Indian embassies in the Gulf deliberately downplay the gravity of the problem to please the governments there and keep the business lobby in good humour. “The Gulf bubble has burst. It’s like the economic world war of the century. It’s like a black hole and we don’t know the end of it.”

The embassies have been instructed not to speak on the recession. Even the media has been gagged in the Gulf. They have been asked to abstain from carrying stories relating to recession. Gulf-based journalists complain of punitive action against those publishing stories on recession. “There is an undeclared censorship,” says a journalist from Dubai.

Many feel the returnees are faced with a bleak future back home. According to K.V. Shamsudheen of the Pravasi Bandhu Trust, non-residents have remitted more than Rs 2,00,000 crore to Kerala in the past 33 years.

“Only 5 per cent of this amount has been utilised for productive investment. Most of the returnees have no savings as they spent their money on unproductive channels like buying big houses or expensive weddings. There has not been any rehabilitation package either for those who have forced to come back home”, he says.

According to him there has been a rise in the suicides by returned migrants, from 40 in 2003 to 140 last year. A study by the Centre for Development Studies notes that Kerala until 2007 had a million returnees from the Gulf.

With no jobs in hand, how many of them will be able to survive the slowdown is a big question. And unfortunately, there is no answer.