Kerala Braces For Huge Influx Of Expats Without Jobs
An unauthorised market run by migrants in Sonapur, UAEPhoto credit: Rejimon Kuttappan

Kerala Braces For Huge Influx Of Expats Without Jobs

On International Workers’ Day, companies in the Gulf countries have conducted mass layoffs of Indian workers

Since 2016, Manohar R (name changed) was proud of working for the biggest automobile retailer in Oman. He was paid well and was provided money for decent accommodation for his family. He was able to pay his children fees in Muscat and was also able to deposit a small amount in an Indian Bank savings account too.

But his stress-free days have come to an end on Tuesday as the company he worked sincerely for over the last four years has taken his resignation forcefully as part of a mass layoff.

He has been told not to come to the office today. On International Workers Day, he has become jobless.

Talking to The Lede over the phone, Manohar said that citing an economic downturn due to COVID-19 pandemic verbally, they have taken resignations of 400 workers.

The majority of the laid off workers are Indian.

“The company has said that our last salary will be on April 30. And 70% of the gratuity will be given now and the rest while travelling. They have told us that we can leave on the third day once flights resume operation. Till then they will give us a nominal amount to survive, which will not be enough for a family to manage,” Manohar said, adding that rent would be a question mark for them.

“Usually, tickets are purchased by the company. Now, when the flights resume operations, the ticket prices will be high as the demand is high. So, they will take money from 30% of our gratuity for ticket purchases. Eventually, we will be returning empty-handed to India,” Manohar added.

An economist in Oman, who requested not to be named, said the COVID-19 pandemic has damaged the economy badly.

"Job loss, salary cuts and perks being removed has become the new normal," the economist said, adding that retail, automobile, and construction sectors are the worst hit, where mass layoffs are going to happen.

Around 6.5 lakh Indians work in Oman.

Replace Migrant Workers

On Wednesday, Oman's finance ministry told the state companies to replace migrant workers with locals, as part of efforts to develop the national workforce, state-owned Oman News Agency reported.

Two weeks ago, Oman had barred private companies from trying to lessen the economic burden of the Coronavirus crisis by firing Omanis.

It also had urged private firms to ask non-Omani employees "to leave permanently".

Over the past few weeks, Oman - which as of Wednesday had registered 2274 Coronavirus cases and 10 related deaths - has announced budget cuts to stabilise the economy.

The dizzying dive of oil prices and the economic slowdown caused by the COVID-19 outbreak is straining the finances of Oman.

Recently, Fitch Ratings said its forecasts for Oman do not take into account the possibility that it might receive financial support from other governments in the region or institutions such as the International Monetary fund.

Fitch Ratings revealed that even if the Brent crude gains a price of around $35 per barrel, Oman will run a budget shortfall this year of over $10 billion.

The ratings agency estimates that Oman needed Brent at over $80 to balance the books last year.

According to the International Monetary Fund World Economic Outlook report, the Gulf Cooperation Council (GCC) economies are projected to record overall negative real GDP growth in 2020.

It has forecast global growth at –3% in 2020, an outcome far worse than during the 2009 global financial crisis. The forecast is marked down by more than 6 percentage points relative to the October 2019 WEO and January 2020 update - an extraordinary revision over such a short period.

COVID-19 pandemic led lockdown and the oil price crash has led to job losses of migrant workers in all six Gulf Cooperation Council (GCC) countries where there are some nine million working Indians.

Indians from different GCC countries told The Lede that either they are being told to go on leave or are being compelled to give up 15 days' salary.

An Indian working in Qatar told The Lede he has been told to give up the end of service benefits and return home.

So Far 56,000 Jobless Keralites

The data compiled by the Non-Resident Keralite Affairs (NORKA), a Kerala government body set up for the welfare of Keralites abroad, reveals that there are around 56,000 Keralites of those who registered on the NORKA portal to return, are jobless.

This NORKA data has been collated during the last three days.

Meanwhile, the International Labour Organisation said in its Thursday report that as of 22 April 2020, 81% of employers and 66% of own-account workers live and work in countries affected by recommended or required workplace closures, with severe impacts on incomes and jobs.

“As job losses escalate, nearly half of global workforce is at risk of losing livelihoods,” the ILO said in its report.

According to the ILO nowcasting model, global working hours declined in the first quarter of 2020 by an estimated 4.5% (equivalent to approximately 130 million full-time jobs, assuming a 48-hour working week), compared to the pre-crisis situation (fourth quarter of 2019).

ILO Director-General Guy Ryder said that as the pandemic and the jobs crisis evolve, the need to protect the most vulnerable becomes even more urgent.

“For millions of workers, no income means no food, no security, and no future. Millions of businesses around the world are barely breathing. They have no savings or access to credit. These are the real faces of the world of work. If we don’t help them now, these enterprises will simply perish,” he said.

Remittances To Fall

Meanwhile, a World Bank report says global remittances are projected to decline sharply by about 20% in 2020 due to the economic crisis induced by the COVID-19 pandemic and shutdown.

According to the World Bank, remittances to South Asia are projected to decline by 22% to $109 billion in 2020, following the growth of 6.1% in 2019.

"In India, remittances are projected to fall by about 23 percent in 2020, to USD 64 billion - a striking contrast with the growth of 5.5 percent and receipts of USD 83 billion seen in 2019," the report said.

Anchan CK, a Middle East economist, told The Lede that there is a long way to go before we can put the COVID-19 crisis behind us.

“It is unclear at this point, whether there is any intervention large enough to turn this around in the short term. The mid to long term impact on oil prices is likely to be equally catastrophic, with bankruptcies and financial ruin setting markets up for a supply shortage and dramatic price spike,” Anchan added.

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