Saudi economic crisis: MEA to the rescue as 10,000 Indians are left jobless
Plummeting crude prices, aggravated by the violence in the Middle East, and reckless spending by its rulers has pushed the Saudi Arabian economy, almost totally dependent on oil revenue, to the brink. The slowdown has affected nearly 10,000 Indian workers employed by different firms in the kingdom, according to an official in the external affairs ministry.
The ministry has approached the Saudis to arrange for the return of the Indians stuck there.
The situation of the Indian workers is so grim that at least 2,450 of them, employed by the Saudi Oger Company, had to go without wages and even food. "The company stopped providing meals to the workers from 25 July," said the official. The affected workers are now housed in labour camps in Jeddah, Mecca and Taif. "The company has defaulted on their salaries," the official said.
Saudi Oger Company is owned by the family of former Lebanese Prime Minister Rafik Hariri. Ayman Hariri, the slain leader's son who is closely involved in the company's affairs, was featured by Forbes in its list of 10 youngest billionaires in 2013.
Another 3,172 Indian workers stuck in Riyadh haven't been paid their wages either. Although they aren't going hungry, these poor workers don't even have the money to buy air tickets or arrange for exit visas. Saudi employers are notorious for taking away the passports of their workers, and treating them badly. In December 2015, one employer was caught on video thrashing two workers from Kerala.
Left to fend for themselves by their employers, the distressed workers and their families had approached the foreign ministry for help. Foreign Minister Sushma Swaraj has assured that no Indian worker would go hungry, and she is said to be monitoring the situation hourly. "She spoke to a worker at 2.45 am today," said the official.
The ministry had, on 30 July, directed the Indian mission in Jeddah to help the distressed workers. "Our consulate in Jeddah, with the assistance of the Indian community there, has been able to provide rations to 2,450 workers, which should be sufficient for the next 8-10 days," the MEA official said.
Sushma has tasked both her deputy ministers, VK Singh and MJ Akbar, to ensure the crisis is resolved. Singh, who recently oversaw the evacuation of Indians from war-torn South Sudan, is expected to travel to Saudi Arabia on Tuesday and work out the modalities for the return of workers. He will also visit the labour camps to take stock of the situation.
Akbar, the MEA official said, is liaising with the Saudi authorities to ensure that all wage claims of the Indian workers are processed in accordance with the law.
Akbar, meanwhile, has also been asked to monitor the situation in Kuwait, which too is facing an economic crisis albeit of a less severe nature than its neighbour. There too, several Indians have not been paid their salaries. "Our ambassador in Kuwait has informed that the situation is not that bad there. The defaulting companies are expected to come around," the MEA source said.
Most Indian workers who go to Saudi Arabia, spending nearly Rs 2 lakh to get there, take up menial jobs for wages of SAR 1,500-2,000. Reportedly, a lot of the workers would go even for salaries as low as SAR 800 per month, but now the Indian government only allows people who furnish proof of a salary of at least SAR 1500 to go, said a manpower consultant who helps send workers there.
According to the consultant, who has been in the business for years, most of the prospective workers have little money. "They borrow from moneylenders, on high interest rates, to pay for visas, working permits. Sometimes, it takes a year to repay the money," he said. "If a worker wants to leave the job, he is asked to refund the money the company spent on his visa, air tickets and the permit, leaving him dependent on the whims of the employer, no matter how difficult the circumstances. If a worker returns without the exit visa, he won't be able to go back at least until the current work visa expires. Even then getting another becomes difficult."
"The companies there wouldn't want this cheap labour go away since they would have to invest a lot of money to get them again."
Still, the consultant pointed out, "even when the situation is so bad, Indians continue to go to Saudi Arabia for work." That is because most of them are desperately poor and see no other way to earn a decent living.
The Saudi economy grew dizzyingly during the oil boom of 2010-14. Not surprisngly either as oil revenues account for almost 45% of the country's GDP.
Since 2015, however, oil prices have been in a free fall, knocking down the economic growth rate to a meagre 1%. The non-oil sector too has recorded recession lately for the first time in three decades. This was largely a result of the spending cuts by the Saudi regime, which faced a budgetary deficit of $98 billion in 2015.
For decades, the repressive Saudi Royal Family used oil revenues to not just keep the economy going but to also keep its aggrieved population quiet with doles and and subsidies. The regime went especially berserk in the oil boom years of 2010-14. According to a Bloomberg report citing regime insiders, the "inefficient spending" by the rulers amounted to $80-$100 billion per year during this period.
Now that the oil money is gone, the regime is finding it increasingly difficult to handle the current economic crisis.