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Contribution of Indians in the Development of Gulf Economy and the Nitaqat Policy of Saudi Arabia

Guest Post

V.Paulraj

India has been having a good relations and trade connections with Gulf countries(Gulf Cooperation Council nations Saudi Arabia, UAE,Oman,Qatar,Bahrain and Kuwait and other oil producing nations such as Iran and Iraq) since last many centuries.

When the oil discovery took place and crude oil production started in 1960’s these nations needed technical experts and workforce from neighboring countries. India provided the much needed cheap manpower, both skilled and unskilled, to these countries. Indian professionals have worked in construction, oil and gas industries, healthcare firms, and in trade / business establishment. Making use of their intelligence and hard work, they have contributed immensely in the infrastructure development and economic achievement.

These nations have low population and high GDP. These nations are rich and the human resource development is taking place at a faster rate compared to other developing countries.

For example the population of UAE is around 40 lakh out of that the expatriates population is around 30 lakh. UAE’s revenue from oil /Gas production is around 100 Billion Dollar. This is roughly equivalent to the revenue from Software industry of India.

Over the recent years there is a demand to take the locals in oil and gas industry and in business houses. Although Oman, Bahrain and Qatar have shown great improvement in nationalization of jobs, the countries like Saudi Arabia and UAE are doing their best in offering jobs to their own educated local workforce.

The people from these nations have been getting good education in the recent years and hence the demand for the jobs is also going up.

The lessons learnt from countries like Libya, Tunisia and Egypt(in the recent demonstrations) necessitate the induction of local manpower in the main stream industry and in business houses.

As a continuation of efforts initiated by these nations, Saudi Arabia recently introduced a new policy called Nitaqat (classification) that seeks to remove illegal immigrants and boost employment for locals by reserving 10 percent of jobs for them. Over 300,000 firms in Saudi Arabia reportedly do not employ any locals and the Nitaqat policy seeks to deal firmly with this.

Under the new law introduced earlier this year, foreigners are allowed to only work for their legal sponsors and their spouses won’t be allowed to take up jobs. Also, the expatriates cannot perform any job other than the one mentioned in their job cards.

As result of above law more than 50,000 Indians(most of them being Keralites) were expected to return home during the last two months from Saudi Arabia.

There are 6.5 million Indians in the Gulf, including 2.45 million in Saudi Arabia. A large number of them are from the southern state of Kerala.

Indians have started world class educational institutions, business enterprises and world class hospital facilities in all the GCC countries.
It is to be noted that Kerala gets a foreign remittance from abroad mainly from Gulf Countries to the tune of 30 Billion Dollar per annum. Needless to say that the Kerala’s economy and the developmental works are dependent on this main source of income of remittance from abroad.
V.Paulraj