Arabian frights: Saudi job law may turn the NRI tide

It is not exactly an exodus, though a moderate labour market churn stoked by contingencies of West Asian politics. The Saudi government’s initiatives to increase employment opportunities to its nationals is bringing nightmares to Indian expatriates in many Gulf countries who have been shouldering hard working conditions and visa rules.

While Saudi authorities portray the job law, or ‘Nitaqat’, as a reaction to negative effects of the underground economy on the legitimate national economy, the government clearly wants more Saudi nationals to seize upcoming private employment opportunities. And, simultaneously crack down on illegal immigrant workers.

Job loss fears crop up

According to Saudi Ministry of Labour data, around 2 million foreign workers are set to lose their jobs because of the strict implementation of Nitaqat. Indian expatriates comprise 40 per cent of the foreign workforce. The deadline for implementing Nitaqat by private employers in Saudi ended on March 27 and those who have become jobless and were deported have not found employment in other countries. The total number of deported workers remains unclear. Labour inspectors and police officers are routinely conducting raids on enterprises suspected of employing illegal workers.

As per media reports, more than 200 jobless persons from Saudi Arabia have arrived at different airports in South India since the implementation the job law. The numbers could be much higher as many returnees leave the airports without registering their status, officials said. Overseas Indian Affairs Minister Vayalar Ravi says the government has received assurances from Saudi authorities that the law will not be implemented strictly. “I have written to nine state chief ministers to hold discussions on this and find rehabilitation measures since they (NRIs) help our country through timely remittances. I am planning to go to Saudi Arabia soon to discuss the matter with the authorities there,” Ravi said.

Indian ambassador to Saudi Arabia Hamid Ali Rao said Nitaqat and hunting of illegal employees should be viewed in a different perspective. “Illegal employees are those who are overstaying in Saudi Arabia without valid documents and people whose visa periods have expired. We are enumerating people under this category to deport them,” Rao said.

Over 2,000 workers facing deportation came to the Indian embassy office on Thursday alone. “We have started a separate deportation cell in our office,” Rao said. “Nitaqat is an entirely different issue and it is the government’s Saudiisation programme. The ill-effects will surface only at a later stage. Since Indians are law-abiding people and respected throughout Saudi Arabia, I hope we can overcome the situation. There is no need for panic,” Rao said.

A Saudi Central Department of Statistics and Information study fixed the country’s unemployment rate at 12.2 per cent last year. This meant that more than 5.88 lakh people were without jobs. Saudi Arabia decided to adopt the Nitaqat programme to push its nationals into workforces in companies colour-coded to stop outsiders from monopolising employment opportunities. Establishments falling in the red zone are the worst offenders so far, who have failed to employ the minimum quota of Saudi nationals in their workforce. The yellow category of firms have also fallen short of their targets to employ Saudi nationals. Those in the green zone fall in the blue chip category as they fully adhere to the kingdom’s labour laws. The Nitaqat programme will not be implemented in businesses employing less than 10 people.

Tough moves

As part of intensifying the drive, the Saudi government announced two additions to the Nitaqat law last week. The new rules state that an expatriate worker should work only under his sponsor and the worker is not meant to perform any job other than the one specified on his labour card or iqama. The government also issued an order stating that iqama violators would be arrested in raids and extradited to their respective countries. Besides hiking the fee for renewing labour cards from Saudi Arabian Rial (SAR) 100 to SAR 2,500 and launching unannounced raids at labour camps, the Saudi government also restricted inter-state travel of foreign nationals, formed local level committees to monitor effective implementation of the Nitaqat system and initiated strict actions against benami businesses.

The impending labour churn in Saudi Arabia will have its impact on Kerala, a land where non-resident remittances are most valued. Kerala received over Rs 60,000 crore in remittances from non-resident Keralites (NRKs) from all over the world in 2012; which is more than the state's revenue of Rs 55,000 crore – and, 16% of total NRI remittances worldwide. In 2011, the number of  Keralites working abroad was 2.28 million. However, the total number of Keralites in Saudi Arabia is around 6 lakh and the impact of Nitaqat would be on less than three per cent of this expatriate population.

“In Saudi Arabia, 90 per cent of Keralite labourers in the construction sector are skilled or semi-skilled. The construction sector needs manpower and Indians are the most favoured expatriate workers in Saudi Arabia. Our over-concern will torpedo that status. Also, the expatriate population is contributing a lot to the Saudi economy. Though expatriates are remitting SAR 15.3 billion to their home countries, they spend almost the same amount within the kingdom. Their government will keep that in mind,” said Shamsudheen, who heads a welfare association for the cause of Keralites.

A few people say that the labour issues will not ameliorate the acute labour shortage in Kerala which is now met by workers from Assam, West Bengal and Bihar. “There is panic that the ongoing realty projects will be affected in the state. But this segment is solidly supported by expatriates who are educated and well employed,” said a source related to CREDAI’s Kerala chapter.

According to  K C Zakharia and S Irudaya Rajan who wrote a CDS study titled ‘Gulf Connection 1998-2011: Economic and Social Impact of Migration’, there is no correlation between recession and emigration to Gulf in Kerala. The number of emigrants from the state increased from 1.36 million in 1998 to 1.84 million in 2003, 2.19 million in 2008 and 2.28 million in 2011. The reverse migration also witnessed an increase from 0.74 million in 1998 to 0.89 million in 2003, and 1.16 million in 2008 which slightly fell to 1.15 million in 2011.