Indians still heading to the Gulf

National economies are struggling and construction firms are battling recession, but Indian workers still travel to the Gulf in droves.

ABU DHABI // National economies are struggling and construction firms are battling recession, but Indian workers are still travelling to the Gulf in droves, according to that country's ministry of overseas Indian affairs. Although fewer are coming to work for building companies, other sectors of the economy are attracting enough to make up the difference, data suggest.

No flood of returning expatriate labourers has materialised, officials said, although many are receiving unpaid leave until their companies regain their footing. "While it is true that the construction industry has been affected considerably in the UAE and to a lesser extent in other countries in the Gulf, there has not been, at least, [to] date, any unusual increase in the number of returnees or any visible reduction in the number of persons going to the Gulf for employment," said G Gurucharan, the joint secretary for the office of the ministry.

Mr Gurucharan said there has been a 24 per cent drop in the number of emigration check clearance certificates - which are given mostly to non-skilled workers - in the first quarter of this year. He added that it was "difficult to attribute this decline to the economic slowdown alone" without examining other possible factors. The overall number of Indian workers is staying level, however, largely because of strong demand in the health care and household services sector, which, Mr Gurucharan said, "even in times of a global slowdown, would be necessary services".

In 2008, the number of Indian workers in the region reached a high of 840,000 after hovering around 650,000 in previous years. Of those, the ministry said, about 60 per cent worked in construction. The Minister of Overseas Indian Affairs, Vayalar Ravi, said that until 2007, 50,000 to 150,000 workers returned annually to India from Gulf countries after completing their contracts, which run from three to five years.

In 2007, that number jumped to 300,000, where it has remained steady. About 4,000 per month of that total are from the UAE, officials said. Despite the downturn, Mr Ravi said, that figure was expected to hold for last year as well as the end of the coming financial year. The data reflect how many workers return to India on cancelled visas or after finishing their jobs, not those on leave. Ellan Govan, the community welfare officer with the Indian embassy, said: "Our records indicate that most workers have been given a long period of leave, leaving their visas valid."

"They are not returning with their visas cancelled," he said. "That leaves it open for them to come back." This year, Proleads, a Dubai property consultancy, estimated that 45 per cent of the country's building projects had been delayed. The Indian government did not say whether workers who had lost their jobs as a result of delayed projects were staying in the UAE or travelling to other GCC countries seeking jobs.

"The most visible impact on the construction industry appears to be in the emirate of Dubai," Mr Gurucharan said. "The job opportunities in Dubai were primarily in construction, while in the other countries and emirates, the job opportunities were more broad-based, covering [a] wider spectrum of industry, including oil and gas and related ancillaries." No fiscal help is being offered to those returning to India, although the government is considering a proposal to establish an aid fund. A separate programme helps former expatriates transfer their skills to jobs that may be available in India.

"Under these circumstances, it would be useful for the major states of origin, such as Kerala and Andhra Pradesh, to undertake an appropriate strategy that will deal with the return and resettlement, providing... interim support for workers returning without completing their contracts and a programme of re-skilling worker in alternate sectors," Mr Gurucharan said. Kerala, the home state of many expatriate workers, has already set up a loan package to help returnees start small businesses from their homes. The 1 billion rupee (Dh74 million) loan package is expected to help at least 200,000 people returning from the Middle East.

India is the largest supplier of workers to the Gulf, according to the ministry. However, chances of large-scale redundancies have also led to fears of a drop in money send back to India from workers abroad. Mr Ravi said in January that of the US$27bn (Dh99bn) that flows into India each year in remittances, $13bn comes from the Gulf. The World Bank estimates that the biggest declines in the flow of migrant money next year are expected in the Middle East and North Africa because of economic slowdowns in the Gulf and Europe.

"The strengthening of the dollar in recent months has restored the remittance value of the wages of the overseas Indian workers," Mr Gurucharan said. "Ironically, since September, 2008, coinciding with the global financial crisis, remittances to India have shown an upwards trend." @Email:[e-mail]