The Telegraph
Friday , April 21 , 2017

Riyadh retail job shock for Kerala

April 20: Saudi Arabia's labour minister today issued an order to restrict employment in shopping malls to Saudi nationals, setting off tremors thousands of miles away in faraway Kerala.

Most of the Indian expatriates who work in the Gulf kingdom are from the southern state.

A Reuters report cited the tweeted order from the Saudi minister for labour and social development, which defined malls as "closed commercial centres", but did not specify a timeline or how many expatriates would lose their jobs.

According to the Vision 2030 economic reform plan released last year, the report said, the Saudi retail sector employs 1.5 million workers, of whom only three lakh - or one in every five - are Saudi nationals.

There are no estimates of how many Indians make up the remaining 1.2 million. But the impact of the order is bound to be felt in Kerala, which sends thousands of skilled and semi-skilled workers to Saudi Arabia and other Gulf states every year.

"This is going to leave a massive impact in Kerala as Malayalis form a huge majority of foreign workers in Saudi shopping malls," said K.V. Abdul Khader, CPM legislator from Guruvayur, who is also the chairman of the Pravasi Welfare Committee of the state Assembly.

"Any mass job loss in any of the Gulf countries would leave its impact on Kerala, but this one could be the mother of all job losses," Khader told The Telegraph.

Saudi Arabia has been steadily closing off different areas of employment to foreigners, who make up about a third of the population, as it aims to create jobs for young Saudis and cut the unemployment rate among nationals.

Riyadh's latest move to reduce dependence on expatriate workers comes after last year's decision to reserve all jobs in mobile phone shops for Saudi nationals under the government's Nitaqat law, a policy for grading companies according to how many local people they employed.

Among the sops offered for hiring a good number of Saudis were easy issuance of labour permits and renewal of trade licences.

According to last year's order from the labour ministry, no mobile phone retailer could employ an expatriate after September 2. In other words, an owner could be a foreigner but the staff had to be local.

Around 30,000 jobs were made available to Saudi nationals with that one move, when thousands of Indians, most of them from Kerala, lost their jobs.

The implementation was so strict that 50 per cent of the jobs were made available to Saudi nationals on June 6, the beginning of the month of Ramazan.

By then the Saudi government had trained around 34,000 men and women in maintenance, sales and customer service through the state-run Technical Training Corporation.

"Around 7,000 mobile shops were owned by Malayalis who employed three to four people each, most of them from Kerala. All these employees had to switch jobs to more secure ones or seek alternative employment in other Gulf countries like the UAE and Qatar," said Khader, who feared a bigger impact this time.

"Most of these (retail) jobs are handled by Malayalis, which means all of them will lose jobs if the (latest) order is implemented."

K.N. Harilal, member, Kerala State Planning Board, agreed that the impact on Kerala, around 4,000km away, would be huge. "We never had a big-bang impact in one particular sector so far. Previous cases of mass job losses were well distributed over several sectors," he said.

Harilal said state governments couldn't do much in situations like this and the Centre needed to step in. "This should be taken up by the foreign ministry as it is about livelihood of lakhs of Indians."

Kerala has more than doubled the budget for the department of Non-Resident Keralites' Affairs to around Rs 61 crore, with a commitment to increasing the amount in the coming years. "It's a big move by the government. But more money would be needed to rehabilitate Gulf returnees," Harilal said.

Khader highlighted another potential impact of the Saudi move - the effect on remittances from abroad that enrich banks in India. "Kerala has been receiving Rs 1 lakh crore (every year) from our workers in the Gulf, of which the biggest chunk is from Saudi Arabia," he said.

"A World Bank report had put the total remittances by Indian expats at $71 billion. So we can imagine the damage in terms of money and sustenance of their dependents here. Our expatriates have always been our strength and weakness. They support the economy by remitting their earnings. But at the same time the state would suffer badly if a good number of them returns."

Khader agreed with Harilal that it was the Centre that should "ideally" take up these issues. "That too at the Prime Minister's level," he said, citing past instances when the heads of state of Yemen and Egypt had met the Saudi ruler to ensure their nationals stayed employed.

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