Bangkok: India would be among the hardest-hit nations as the
remittances sent home by its people working in the Middle East begins
to dry up following the economic downturn.
There are an estimated five million Indian migrant workers in six Gulf
nations, transferring more than one-fifth of India's total overseas
remittances.
While the Ministry of Overseas Indian Affairs insisted the situation is
not alarming, there are reports of job losses and wage cuts in the
United Arab Emirates and Bahrain during the slump in oil prices and in
the construction, real estate and tourism sectors because of the
financial crisis.
"Remittances are a catalyst in India's growth as they make up 3 percent
of the country's GDP," a ministry official said. "A drop in the figures
could act as a drag on the economy."
The Indian consulate in Dubai has said construction firms there had
bulk-booked planes next month to fly 20,000 to 30,000 workers home on
long leave or to re-deploy them on projects in Gulf nations like Qatar.
An estimated $260 billion of real estate projects are reported to have
been delayed or shelved in the Emirates alone. Dubai's construction
boom has crashed, sending thousands of workers back home and causing
thousands of them to leave cars at the airport that they have stopped
payments on.
Over the past three to four years, one of Asia's fastest growing
industries has been exporting workers, especially to the oil-driven,
construction-crazed economies of the Middle East.
Remittances have become a major contributor to foreign exchange
earnings and gross domestic products (GDPs), peaking at an estimated
$116 billion in 2008.
This year, the money flows were expected to slow as construction
projects are shelved and other jobs dry up in Gulf nations, such Abu
Dhabi, Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab
Emirates, which have employed up to 13 million foreign workers, 11
million of whom hailed from Asia.
The remittances have saved millions of families from impoverishment and boosted the region's economies.
Last year, remittances to Asia amounted to $8.9 billion for Bangladesh,
$27 billion for China, $30 billion for India, $6.5 billion for
Indonesia, $2.2 billion for Nepal, $1.8 billion for Malaysia, $7
billion for Pakistan, $16.4 billion for the Philippines, $2.7 billion
for Sri Lanka, $5.5 billion for Vietnam and $1.8 billion for Thailand,
according to International Labour Organisation estimates.
The inflows accounted for 9.5 percent of Bangladesh's GDP, 2.4 percent
of India's, 15.5 percent of Nepal's and 11.6 percent in the
Philippines, the UN agency said.
But recession and plummeting oil prices were expected to take a deep bite out of the remittance flow in 2009.
The World Bank estimated remittances from South Asians in the Gulf
could decline by nine percent in dollar terms in 2009, compared with a
38 percent increase in the previous yea
