Saudi Arabia has agreed to repatriate thousands of Indian labourers who have been stranded in the desert kingdom after being laid off by cash-strapped construction companies hit by sharply falling global oil prices.
Riyadh is also relaxing its normally tight controls on foreign labourers to permit Indian workers laid off by one company to take up jobs with different employers, potentially reducing the number of Indians seeking to go home.
The unusual pledges were announced by India’s foreign ministry late on Wednesday after senior officials flew to Jeddah to work out a solution to the crisis confronting thousands of Indian workers who were left without money or tickets home after beingl aid off from their jobs.
Saudi Arabia is “providing free passage to all those who want to go back to India,” New Delhi said in a statement. “They have also agreed to allow transfer to any other company in Saudi Arabia.
Saudi Arabia’s assurances underline the severe problems afflicting the kingdom, where tens of thousands of South Asian workers have become unwitting victims of the liquidity squeeze caused by plummeting oil prices.
Previously, South Asian governments have shied away from direct interference or criticism of local affairs in the oil-rich Gulf, which hosts millions of their expatriate workers who remit billions of dollars back home.
“This potentially indicates a new developing dynamic, where you could see migrant workers’ countries of origin take more assertive steps in support of their nationals,” said James Lynch, deputy director of Amnesty International.
Indian officials told the Financial Times they did not know how many Indian workers would go home, now that they had the option of remaining in Saudi Arabia and taking up other jobs.
Saudi Arabia’s strict rules for foreign workers usually make it nearly impossible for those recruited by one company to change jobs or leave the country without their employer’s approval. Activists have long denounced the rules as leaving workers vulnerable to abuse. Saudi law also requires companies to send foreign workers home at the end of their contract with full pay.
However, Saudi Arabia’s largest construction groups — including Saudi Binladin and Saudi Oger — are facing cash flow problems as the government agencies that provide the bulk of their contracts pare spending and delay payments to conserve their financial reserves.
The construction companies have responded by delaying wages to workers — many of whom complain of not being paid in six or seven months — or dismissing them entirely, leaving many without tickets home.
New Delhi was drawn into the crisis after Saudi Oger, owned by Lebanon’s Hariri family, stopped the supply of food and water to camps housing thousands of Indian workers, prompting an appeal for help from the desperate residents. Indian diplomats last weekend distributed 15 tonnes of food — much donated by the 3m Indians living and working in Saudi Arabia — to help the most desperate workers.
In its statement, New Delhi said the Saudi government had taken action to ensure all camps housing Indian workers would be provided with food, water, sanitation services and medical care. It also said that the Saudi government would “honour the claims filed by the workers which have defaulted on their payments”.
The crisis enveloping the Indian labourers highlights the potential negative impact of falling oil prices on many South Asian economies, which have grown accustomed to a strong inflow of remittances from workers in the Gulf as a source of foreign exchange.
By: Amy Kazmin and Simeon Kerr (Financial Times, Delhi/London).
Photo: Trade Arabia.
Review: Emerging Market Formulations & Research Unit, FLAGSHIP RECORDS.
For The #FacebookTeam