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Saudi’s Nitaqat Law: Trouble for Indian Expats? (Page 2 of 3)

It was in the wake of the oil boom of the 1970s that Indians, especially from the state of Kerala, headed to the Gulf in search of better economic prospects. The majority headed to UAE and Saudi Arabia. According to India’s Ministry of Overseas Indian Affairs (MOIA), the numbers in Saudi Arabia swelled from 15,000 in 1975 to 650,000 in 1990. The Gulf War of 1991 opened up more opportunities. The mass exodus of Yemeni workers from Saudi Arabia prompted Saudi employers to hire Indians to replace them. By the close of the century, there were 1.4 million Indians in the kingdom. The figure stands at over 2 million today.

Roughly 10 percent of Indians working in Saudi Arabia are professionals, including doctors and engineers, another 10 percent are non-professionals in white collar jobs, while the remainder consists of workers such as technicians, maintenance personnel, maids, drivers, and farm laborers. “There are also some illegal Indian migrants,” the MOIA website says.

So who among the Indian expatriates will be impacted by the localization of labor in Saudi Arabia? And how serious will this impact be?

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Sections of the media in Kerala have whipped up panic by predicting a “reverse exodus.” Not surprisingly, for families living here whose survival depends on money sent home from Saudi Arabia, the possibility of unemployment of the breadwinner is deeply worrying.

The Indian government has sought to calm fears. Minister of External Affairs Salman Khursheed said that legal immigrants will not be affected by the Nitaqat law.

Indian migration experts are of the view that the Nitaqat law’s impact will be minimal as it will not displace either the highly skilled or unskilled worker. Irudaya Rajan, migration expert and professor at the Centre for Development Studies in Thiruvananthapuram in Kerala argues that the law will have “no impact on Indian laborers.”

Localization of labor has existed in Saudi Arabia and other Gulf countries for over two decades, he points out. “Just as these policies had no impact for the last twenty years, I expect there will be no impact this time too.”

Indeed, this isn’t the first time Saudi Arabia has attempted to localize labor recruitment. A Saudization scheme introduced in 1994, for instance, required businesses to set aside 30 percent of jobs for locals. It did not work.

Ravi Nair, an engineer working in a Saudi oil company for over 20 years, points out that  Saudization of labor schemes do not work as Saudi nationals lack the expertise of the highly skilled expatriate and are unwilling to do the menial work that the unskilled expatriate does. “The Saudi economy will grind to a halt without expatriates,” he observes, adding that the government is “well aware of this.”

In the past month, many foreigners have stayed away from work, fearing they will be deported if found by the police. Schools in Riyadh and other cities have been forced to shut down as teachers, largely expatriates, have not turned up for work. Construction activity, too, has slowed.

Nair says that in a few weeks, the zeal of Saudi authorities will wind down and their raids to identify Nitaqat defaulters will cease. “It will be business as usual” in Saudi Arabia, Rajan observes.

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