Sunday, January 17, 2021

Kuwait To Drastically Reduce Expat Workers; Big Blow To Indian, BD Migrant Workers

Kuwait is looking to reduce its expat population, due to a slump in oil prices and coronavirus, that has strained its economy. If implemented, the decision could be a big blow to Indian migrants working in the Gulf country.

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Kuwaiti Prime Minister, Sheikh Sabah Al-Khalid Al-Sabah, has announced that the country’s expatriate population should be more than halved to 30% of the total. The announcement comes as the Kuwaiti economy continues to struggles due to the global pandemic and massive drop in oil prices.

The Gulf nation is heavily dependent on foreign workers which amount to nearly 3.4 million of Kuwait’s 4.8 million population. For many years, Kuwait has tried to reduce public-sector expatriates with nationals, but thanks to the coronavirus, this process has now been accelerated.

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The announcement by the government is a rare acknowledgement and renews the push by members of the government to reduce the number of migrant workers, especially unskilled labour since they put the economy under immense strain.

The plan is to implement a quota system and replace all expatriate government employees, estimated at 100,000, with Kuwaitis.

Anti-expat rhetoric is expected to rise further as election day approaches. The government is also looking for means to diversify its economy since the world is moving towards cleaner energy sources. Presently, carbon sales account for an estimated 90% of total government income.

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According to experts at EurAsian Times, if the government decides to implement such a decision, it would be a big blow to Indian migrants workers in Kuwait. The oil-rich country is a favourable destination for workers since it allows tax concessions who send remittances back to India.

Indians constitute the largest group of expatriates in Kuwait, with an estimated population of 1 million and their annual remittances worth $4.8 billion. India is also among Kuwait’s top 10 trading partners, with bilateral trade worth $6.2 billion during 2015-16.

The country is also a popular destination for migrant workers from Bangladesh, Sri Lanka and the Philippines. In Kuwait, at least 650,000 expatriates, mostly from the above-mentioned countries, are employed as domestic workers alone.

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The proposed move also drew flak from netizens. Critics were quick to point out that small pools of citizens will make replacing many foreign workers difficult, especially in occupations Kuwaitis are reluctant to take up, and will lower overall consumption.

Sajed Al-Abdaly, a prominent political columnist, took to twitter and urged the government to reconsider their move if they want the people to take it seriously.

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The coronavirus has caused oil prices to drop to historic lows, thus sending shudders through rentiers economies of the Middle East. Before the outbreak of the virus, countries in the region leveraged their oil wealth to expand their populations with foreign workers and build vibrant consumer societies.

However, this is set to change with most Gulf expected to run deficits of 15%-25% of economic output, leading to a build-up of debt, dwindling reserves, and tough choices.

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