Dubai debt crisis may not cause huge job losses: Ravi

The government said on Sunday that it was closely tracking the fallout of the current financial crisis in Dubai and directed its missions in the region to provide all necessary help to the vulnerable sections of the Indian workforce in the Gulf.
Overseas Indian Affairs Minister Vayalar Ravi, however, said the government was not anticipating a surge of returnees to India from the region. It was confident that the current crisis would 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 one year back,” Mr. Ravi told PTI.
He said preliminary reports suggested that although the huge debt of a State-owned investment holding firm impacted markets the world over, it may not result in huge job losses.
Global financial markets plunged on Thursday after Dubai World, the government investment firm burdened with $59 billion in liabilities, requested deferment of the debt. Stock markets in India too were affected.
Asian markets were battered badly by the crisis with the shares of financial institutions and the real estate sector tanking the most.
Mr. Ravi dismissed fears of the debt crisis impacting remittances, saying remittances by expatriates had only increased during the worst period of the economic recession. “Against all the odds, the remittances actually increased last year. I do not think remittances will be affected because of the debt repayment crisis.”
Indians living in the Gulf remitted $27 billion in 2007 to make India the top receiver of migrant remittances. The United Arab Emirates, of which Dubai is one of the seven emirates, has nearly two million Indian population and is the country’s largest export destination with shipments of about $24 billion in fiscal 2008-09.
According to estimates, nearly 65 per cent of the Indians residing in the country are blue-collar workers.
Secretary in the Overseas Indian Ministry K. Mohandas also felt that there would not be a major impact on the job market in the region. “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.”
However, Mr. Mohandas admitted that there may be some kind of impact on Indians working in the real estate sector as it was hit hard by the crisis. “It will take time to get the real impact of the crisis.”
Indians constitute as high as 42.3 per cent of the population of Dubai. An estimated five million workers stayed in the Gulf region.
The Overseas Indian Affairs Ministry plans to announce a comprehensive package to rehabilitate Indian workers who have returned to the country following job losses due to the economic downturn. Mr. Ravi said the government was in the final stage of establishing a ‘Return and Resettlement Fund’ that would provide a “reasonable level of financial security” to the overseas returnees. “It will take some more time to operationalise the fund.”