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Hapless Keralites return home in hordes as Saudi Arabia continues to reserve jobs for locals

The financial fraud case involving Benoy Vinodhini Balakrishnan caught headlines in Kerala because he happened to be the son of the state secretary of the ruling Communist Party of India (Marxist).

But migration experts view the case as a reflection of the larger crisis businesses face in the Middle East in the wake of falling oil prices. Many Keralites, who built business empires from the petrodollar boom in the 1960s, have fallen by wayside in the slide of the oil-based economy in most Gulf countries.

Representational image. Courtesy SK Mohan

Representational image. Firstpost/SK Mohan

M Ramachandran, who developed a large chain of jewellery outlets around the world from a tiny showroom he set up in Kuwait City in the 1970s, is languishing in a jail in Dubai along with his daughter for the last two years in a Rs 1,000-crore financial fraud case.

P Mohamed Ali, who was ranked as one of the 10 richest Indians in the Middle East for 10 consecutive years, spent two years in jail in Oman in a corruption case. Ali, the founder of Oman-based Galfar Engineering and Contracting Co., was released in June 2016 as part of the general amnesty declared in connection with the Holy Month of Ramadan.

Benoy, who borrowed nearly Rs 7 crore from a tourism company in a bid to expand his business to Saudi Arabia, Nepal and India, is holed up in Dubai following a travel ban imposed by a court in the emirate. His brother Bineesh Kodiyeri is also a wanted man in UAE in connection with a similar cheating case.

Same is the fate of Sreejith, son of CPM Chavara MLA Vijayan Pillai, who managed to return to Kerala before a court in Dubai sentenced him to two years’ imprisonment in a Rs 11-crore cheating case.

They are among a large number of Keralites whose business plans have been shaken by the current crisis. A consortium of banks in UAE has filed cases against 22 Keralites, who have absconded after cheating the banks of Rs 1,000 crores, in the Chief Judicial Magistrate’s Court in Ernakulam.

These men were apparently inspired by the rag to riches stories of Malayali business tycoons like Yusuf Ali, Ravi Pillai, Azad Moopen, PNC Menon, Sunny Varkey and Joy Alukkas who built their business empires in the early days of the oil boom.

The steady fall in oil prices coupled with the global economic crisis have shattered their businesses dreams. The crisis has also hit big and small businesses across the Middle East, rendering thousands of expatriates redundant. While many have packed their bags and returned home, others are pulling on with reduced wages and allowances.

The crisis affected Saudi Arabia, the largest producer of oil in the world, most since its economy was built around oil. The kingdom’s bid to tide over the crisis by diversifying the economy and restricting jobs to its nationals through a nationalisation drive has put the expats in the doldrums.

The nationalisation or Nitaqat was introduced in 2011 by the Ministry of Labour with the aim of cutting down unemployment among Saudis from 12.8 percent to 9 percent by the year 2020 and to 7 percent by 2030. The kingdom plans to nationalise 1.2 million jobs now being occupied by expatriates in the private sector by 2020.

Nitaqat requires employers with over nine employees to hire a certain percentage of Saudi nationals, depending on the company’s size and the number of their employees. The companies receive incentives or penalties depending on the category they belong to.

The government’s next target is public sector, according to Saudi Gazette, an English language daily published from Jeddah. The plan is to get rid of all expatriate workers from government jobs within three years. The Ministry of Civil Service has asked all ministries and government departments to replace 70,000 expatriate workers with Saudi nationals by 2020.

The government’s ultimate goal is to transition to a nearly all-Saudi workforce by 2030. Expat labourers account for roughly a third of Saudi Arabia’s 27 million population. The Indians constitute about 12 percent of the expatriate workforce. About a sixth of this is from Kerala.

Nitaqat will affect Keralites hard since a large number of them are working in the business categories covered by it, says Thomas Mathew, who works in Al Khobar. A large number of them have been working as salesmen, drivers, nurses and office assistants.

He said about 10 percent of Keralites working in Saudi are professionals like doctors and engineers, another 10 percent non-professionals in white collar jobs, while the remainder consists of workers such as technicians, maintenance personnel, maids, drivers, and farm labourers.

"Barring the professionals and highly skilled workers, others will have to leave Saudi sooner or later. A large number of Keralites working in retail outlets have already lost their jobs. The government recent decision to grant driving license to Saudi women will drive out most of the drivers too soon," he said.

Ashraf Vengath, a member of the Loka Kerala Sabha from Saudi, said over 70 percent of Keralites may have to return within a short period if the current pace of Nitaqat continues as it is. He said that the recent government decision to ban expats from 12 job areas will be the last straw for Keralites.

The new areas brought under Nitaqat are watch shops, optical stores, medical equipment stores, electrical and electronics shops, outlets selling car spare part, building material shops, outlets selling all types of carpets, automobile and mobile shops, shops selling home furniture and ready-made office material, sale outlets of ready-made garments, children clothes and men's supplies, household utensils shops and pastry shops, according to Khaleej Times, a daily published from Dubai.

Apart from job loss, many Keralites have also lost small-scale shops and establishments they run under licences in the names of Saudi nationals. They were shut down following the government insistence to have 10 percent Saudi employees. Ashraf said it was not viable to run companies with local employees since they should be paid at least three times more salary than their expatriate counterparts.

Saudi’s leading English daily, Arab News, reported that over 212,000 business concerns had gone out of business within three years of the implementation of Nitaqat. They were shut down due to their failure to meet the Nitaqat target.

The Kerala government has no data about Keralites who have returned or how many will return from Saudi as a result of Nitaqat. According to new statistics from the kingdom’s General Authority for Statistics, more than 94,000 foreign workers left Saudi Arabia in the third quarter of 2017 alone. The statistics showed that the number of foreign workers came down from 10.79 million to 10.6 million between July and September, 2017.

A report by Banque Saudi Fransi, a Saudi joint stock company, has estimated the number of foreign workers to leave Saudi by 2020 at 6.7 lakhs. According to the report, 165,000 expats are expected to leave the country every year.

TM George, who returned from Riyadh recently, said a bulk of these will be Indians since they constitute the largest number of the expatriate community in Saudi. He told Firstpost that the Nitaqat will also affect future recruitments from the country.

Ministry of Labour and Social Development (MLSD) said in its annual report that they had rejected 533,016 applications for work visas in 2016, representing about 62.77 percent of the total foreign recruitment requests. A Saudi Gazette report said that the ministry had approved only 316,212 work visa applications during the year.

“Saudi was one of the most preferred destinations of job seekers until recently as it offered scope higher saving. With the introduction of new taxes and increase in rent, medical expenses, school fees, transport and the high cost of essential items living in Saudi has become tough for low paid expats in the kingdom,” said George, who decided to call it a day due to rise in the cost of living.


Published Date: Feb 10, 2018 09:44 AM | Updated Date: Feb 10, 2018 15:18 PM

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