Pandemic in the Persian Gulf, no more a haven for money?
As the Gulf is hit by a double whammy of Covid-19 pandemic and plummeting oil revenues, the future prospect of tens and thousands of expatriates in the region appear grim. GCC has been witnessing slowdown for several years and coronavirus had just exacerbated the scene. Oil industry which is one of the region’s key source of revenue having declined by almost 70 per cent witnesses a historic 18-year low.
Gloomy Gulf
Alongside the global growth of -3.0 per cent, an outcome that’s far worse than the 2008 financial crisis according to the IMF figures, the Gulf nations too turn negative in projections this year with -3.9 per cent showing that the region’s economy is literally sinking after ‘the Great Lockdown’.
Saudi Arabia’s growth projection is seen at -2.3 per cent while UAE at -3.5 per cent compared to 1.3 per cent last year. Qatar’s GDP forecast at -4.3 per cent, Oman that recorded 0.5 per cent growth in 2019 is set to fall to -2.8 per cent this year. Kuwait considered better in comparison with others in the GCC projects growth of -1.1 per cent to 0.7 per cent last year.
The glum forecasts have made it clear that the GCC has come to an exigency to rethink about it’s demographics, ease of doing business, dependence on expats for labour and policy making.
Expats on the receiving end
Expatriates in the Gulf have almost shaped the region’s economy for not less than five decades but they now had to bear the brunt of the pandemic. The International Labour Organisation said that the expatriate exodus could be larger than what the region had faced after 2008 financial crisis and 2015 oil price plunge.
According to numbers from the embassies, thousands of migrants predominantly from Asia have registered for repatriation. The homecoming remains a herculean task as debt for visas sponsorship and residency violation fines pop up as hurdles for the labourers. Some Gulf countries have offered to fund for repatriation flights but home countries to where they belong hesitate as they do not have adequate facilities to quarantine returnees.
India stands out to be an exception among those countries as it takes a major effort to rescue its stranded citizens from the Persian Gulf. Many reports indicate that the process could take longer time as it appears to be a larger one than the last evacuation process that airlifted 1,70,000 Indians from the region in 1990 right before the Gulf War.
“Am kind of safe and secured as far as my job is concerned while my friends are at bay as they face 20 per cent deduction in their monthly salaries and some even laid-off from work”, Sai Kishan, a 23-year-old working professional who stays in Doha says.
Kishan is also concerned about the looming crisis and has plans to return to India sooner than later.
An engineer who works at the Kuwait Oil Company says “there are massive layoffs expected particularly in the field of civil and constructions”.
“A record 18 lakh may lose jobs and officials at grade one and grade seven levels at Kuwaiti businesses are the ones in deep trouble”, he adds.
Apart from the layoffs, cash crunch and the crisis within oil industry, there is widespread xenophobic comments going rounds in the region. Hayat al-Fahad, a popular Kuwaiti actress faces criticism after demanding expulsion of migrants. “If their countries do not want them, why do we have to deal with them”, She says.
SBC TV presenter Oqaily on a show criticizes Saudi businesses who retained expats as “disloyal and shameless”. He says, “firms must get rid of the expats and hire the more skilled Saudis”.
The 2021 rebound
Optimism isn’t squelched as the IMF has forecast a better projection in the region with GDP growth of 4.6 per cent next year. Country wise numbers show that the UAE, Saudi are likely to grow at 3.3 and 2.9 while Kuwait, Qatar and Oman may grow at 3.4, 5.0 and 3.0 per cent respectively. The figures indicate that the impasse churned out due to the pandemic may come to halt and the GCC may return stronger but through robust policy making efforts by regulating the labour market needs for the benefit of the GCC and foreign workers alike.
