Despite the brave front put up by Indian government, the debt crisis that has enveloped Dubai World threatens to hit the struggling Indian overseas labour market that is largely dependent on short-term Middle East job contracts. The latest crisis comes at a time when official estimates have admitted that unemployment rates have spiralled to 30% in the Middle East in the last one year.
Industry sources say unemployment figures could be higher than the official estimates and that remittances to India - $43.5 billion in 2007-2008 - are certain to be much lower this year in the wake of the continuing recession in the region. The Dubai World's debt just adds to the bad news.
UAE is the favourite destination for a maximum number of overseas Indian workers - 3.4 lakh people went to the country in 2008 - but the number has been fast declining as Indian workers are unable to get new contracts or extensions in the country that's in the grip of recession.
It's well known that when Dubai sneezes, south India, especially Kerala, catches more than just a cold. Last September, when Lehman Brothers collapsed triggering the great recession, the arrivals at Chennai, Hyderabad and Thiruvananthapuram airports wore a grim look. The news of Dubai World's inability to repay the $59 billion debt has triggered similar fears among the relatives of immigrants back home.
However, the minister for Overseas Indian Affairs tried to allay such fears. ``There were some concerns during the beginning of the slowdown an year ago, but now we are not expecting any exodus (return) of Indians and India will not be affected by Dubai's debts,'' Vayalar Ravi told TOI on telephone.
OIA secretary K Mohandas added that large scale retrenchment was unlikely even though labour movement to UAE had come down. ``There are some countries like Saudi Arabia where labour movement has increased,'' he said adding, however, that the increase was negligible.
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