Optimistic on job losses, but closely watching the situation, says overseas Indian affairs ministry
The government today said it was closely tracking the fallout of the current financial crisis in Dubai and directed its missions in the region to provide all necessary to help the vulnerable section of the Indian workforce in the Gulf who may be affected.
Overseas Indian Affairs Minister Vayalar Ravi, however, said the government was not anticipating a surge of returnees to India from the region following the debt debacle, as it was confident the current crisis will blow over, because it was much less in magnitude compared to the worst period of the global financial meltdown.
“There is no need for undue panic. We are closely monitoring the situation. The crisis had actually started a year back,” Ravi said.
He said preliminary reports had suggested that although the huge debt of a state-owned investment holding firm impacted markets world over, it may not result in huge job losses and return of Indians from the region.
Global financial markets plunged on Thursday after Dubai World, the government investment company burdened with $59 billion liabilities, requested for deferment of the debt, also pulling down the stock markets in India.
The Asian markets were battered badly by the crisis, with the shares of financial institutions and real estate sector tanking the most.
Asked whether the debt crisis would impact the remittances, Ravi dismissed such fears, saying he was not anticipating lower remittances by the expatriates because of the current situation as it had increased during the worst period of economic recession.
“Against all odds, the remittances had actually increased last year. I do not think remittances will be affected because of the debt repayment crisis,” he said
Indians living in the Gulf had remitted $27 billion in 2007, to make India the top receiver of migrant remittances.
The United Arab Emirates (UAE), of which Dubai is one of the seven emirates, has nearly two million Indians and is the country's largest export destination with shipments of about $24 billion in 2008-09.
According to the estimates, nearly 65 per cent Indians residing in the country are blue-collar workers.
Secretary in the Overseas Indian Ministry K Mohandas also felt there would not be a major impact on the job market in the region as result of the crisis in the Gulf city-state but said all the Indian Missions had been asked to provide necessary help to Indians in distress.
“It is not that they are going to close down everything as result of the crisis. We are studying the impact of the crisis and have asked all our Missions to provide necessary help to Indians in distress,” he said.
However, Mohandas admitted that there may be some kind of impact on Indians working in the real estate sector, as it has been hit hard by the crisis. “It will take time to get the real impact of the crisis.”
Indians constitute as much as 42.3 per cent of the population of Dubai. An estimated five million workers are staying in the Gulf region.
Finance Minister Pranab Mukherjee yesterday said the Dubai debt crisis would not have “earth shaking” impact on the country's economy.
Mukherjee, however, said the debacle could impact the repatriation of foreign exchange from there and the job market in the Gulf city-state.
The overseas indian affairs ministry also plans to soon announce a comprehensive package to rehabilitate overseas Indian workers who have returned to the country following job losses due to the economic downturn. Ravi said the government was in the final stage of establishing a ‘Return and Resettlement Fund’ that will provide “reasonable level of financial security” to the overseas returnees.
“It will take some more time to operationalise the fund,” he said.
