27 November 2009
New Delhi, Nov 27: The $59-billion debt woes of state-run Dubai World, one of the largest global conglomerates, has left thousands of Indian families worried, as the region accounts for half of the country's $25-billion remittances.
Gulf countries employ five million Indians, out of the 25 million total strength of the Indian diaspora in 130 countries, and Dubai being a key driver of the region's economy, a shakeout there is seen unsettling the job market -- and the incomes of relatives.
"The Middle East meltdown has been there for the past one year. People have been coming back to India for the past one year," said E. Balaji, director of a leading headhunting firm, Ma Foi Management Consultants.
"Now, there will be at least 25-percent contraction in the job market. There may be a ripple effect on most Middle East countries because of Dubai World bust," Balaji, whose company is part of the Netherlands-based Randstad group, told IANS in Chennai.
Former governor of the Reserve Bank of India (RBI) Y.V. Reddy also expressed concern over the prospect of Indians employed in the Gulf losing their jobs. "Much would depend on its impact on the real economy there and employment," he said.
"It's one thing if property prices or share prices come down. That will affect only one section of people. But how's it going to affect the living conditions, employment, real economic activity in those countries where we are employed?" queried Reddy.
Said K.T. Thomas, a retired state government employee in Changanacherry in Kottayam: "My son doesn't work in Dubai. He is in Sharjah. But things are not particularly good there either. He called me this morning. He is really worried about his job."
"We have this loan we have taken to build two more floors at our house. If my son is unable to send money, it will be impossible to repay the loan with my meagre pension," Thomas said, sounding despondent like many other relatives of Indian expatriates in the Gulf.
In Andhra Pradesh, which accounts for the largest share of remittances from the Gulf after Kerala, the realty industry feel there is an underlying worry that the Dubai World episode may just be the tip of the iceberg.
"Things might go from bad to worse when the Dubai companies announce their financial results in December and January," said A. M. Imran, a real estate dealer in Dubai, currently on vacation in Hyderabad. "Many more could lose jobs," Imran told IANS.
Analysts, nevertheless, maintained that while the future plans of Dubai World in India may be affected, the existing ones may not suffer much. These projects include:
Full ownership of the container terminal in Chennai
A joint venture with Bharat Hotels for five-star properties
A venture with Tata Realty and Infrastructure for logistics parks
Ownership of international container terminal near Kochi
A $12-billion realty project near Bangalore with DLF to house 750,000 people
Interests in Kulpi port project near Kolkata
Pact with Tata Strategic Management Group for consultancy outsourcing
Major stake in Nhava Sheva container terminal near Mumbai
-Major stake in Mundra international container terminal near Kandla
Major stake in Visakhapatnam port in Andhra Pradesh