South Asia has an unfolding COVID-19 crisis far from its own shores. With the pandemic spreading across the Middle East and locking down the regional economy, millions of South Asian blue-collar migrant workers are now stranded with no income or proper shelter. As the lockdown perpetuates, the crisis is now threatening to result in both human and economic costs for countries on both sides of the Arabian Sea.
Many South Asian migrants in the Middle East live in overcrowded and squalid labor camps – a far cry from the social distancing norms that have emerged in the rest of the world – and their cramped living spaces now pose among the starkest challenges anywhere in the global anti-COVID-19 effort. So far, governments in the Gulf Cooperation Council (GCC) region have had no answers to their plight. In March, Qatar locked down its largest labor camp after hundreds of migrant workers tested positive for COVID-19. But while the measure helped reduce the spread of the virus among those outside the labor camp, it only made things worse on the inside: Workers were put on unpaid leave indefinitely and left stranded in their overcrowded dwellings with limited access to healthcare.
Elsewhere in the region, governments followed suit, locking down labor camps in a bid to prevent the virus from spreading, even as the workers within were left with few resources. Aid has also been hard to come by. In Saudi Arabia, the government announced a $2.4 billion aid package, but it only helped cover part of lost wages for Saudi citizens. On the other hand, the United Arab Emirates recently empowered employers to cut wages for non-citizens – a move that labor rights activists said would leave migrant workers even more vulnerable. Meanwhile, cases mount among migrants: In Kuwait, more than half of the over 1,000 confirmed cases are Indians. In Dubai, more than 500 Indians have been found to be infected. In all, over 2,000 Indians have been found positive for COVID-19 across the six GCC nations, as of mid-April – making up nearly two-thirds of all Indian cases outside India.
The unfolding crisis is unlike any that has been seen before. During past wars in the Middle East – across Iraq, Kuwait, Yemen, and beyond – India organized the heroic evacuation of hundreds of thousands of South Asian workers. But with the need for social distancing, this has proved to be practically impossible during COVID-19. After several returnees from the Gulf tested positive, South Asian governments – and India in particular – have been unwilling to take back their own citizens, leaving them stranded abroad. In the UAE, this has even sparked a mild diplomatic tiff, with the government threatening action if migrants aren’t allowed to be repatriated (Pakistan has since begun taking steps to bring back some of its citizens).
The limbo is likely to prove increasingly costly for everybody involved in the days ahead. For countries in the Gulf, the densely populated labor camps will prove to be a great obstacle to any plans to lift lockdowns and resume economic activity: Any relaxation of the lockdown could see the virus spread like wildfire beyond the camps, unless all migrant workers are tested and isolated. And with limited support in their host countries, migrants will scramble to get home once lockdowns are phased out. The exodus could leave a gaping hole in the Gulf economies, with critical sectors such as construction and the oil industry employing millions of expatriate workers. In Qatar, for instance, migrant workers make up a whopping 95 percent of the working population.
For South Asia, on the other hand, the economic costs of falling remittance income will be heavy. The last time the Middle East saw an exodus of workers on such a scale was after Iraq’s invasion of Kuwait in 1990. In the aftermath of the conflict, a study by the Arab Petroleum Exporting Countries Organization and the Arab Fund for Economic and Social Development found that migrant workers lost as much as $23 billion in earnings across two years. The losses contributed to a near-catastrophic balance-of-payments crisis in India, as foreign reserves dwindled and the rupee collapsed from under 20 rupees per dollar in 1990-91 to over 30 rupees per dollar in 1991-92. Many migrants who fled the Middle East did not return for years.
This time around, South Asia’s dependence on remittances is even higher. While India received about $3 billion in remittances each year in the early 1990s (or the equivalent of 1 percent of GDP at the time), it now pulls in about $80 billion each year (nearly 3 percent of GDP). In Bangladesh, remittances have gone from the equivalent of 2.5 percent of GDP in 1990 to 5.5 percent in 2019. And in all countries of the region, the Gulf diaspora continues to account for the bulk of total remittances. The impact of COVID-19 has already begun to be felt: According to reports in Gulf News, India saw a massive drop in remittances from the UAE in the first half of April, as many migrant workers held on to their savings in order to tide over the uncertainty in employment. The World Bank says that remittances to South Asia as a whole could fall by as much as 22 percent this year.
With the mass evacuation of migrants likely difficult for the foreseeable future – and remittance income at stake – South Asian governments will be keen to ensure that their diaspora is well taken care of in their host countries. Governments in the Gulf, too, should want to ensure that an exodus does not take place when lockdown norms are lifted, given that migrant workers will be integral to restarting the economy. Both sides therefore have a common interest in working together for the South Asian workers, including providing them access to healthcare facilities and basic provisions and covering for losses in income. Governments in both regions should also work on building shelters for the migrants in compliance with social distancing requirements.
For India, this is a diplomatic opportunity to represent the interests of its South Asian neighbors. Coincidentally, this year’s G-20 summit is presided over by Saudi Arabia, and in its early deliberations over COVID-19 in late March, the group decided to inject a $5 trillion rescue package into the global economy. As the only South Asian country in the G-20, India should ensure that the group’s stimulus plans also account for the welfare of South Asian migrants in the Gulf. For its part, so far, India has also sent a 15- member medical team to Kuwait to assist that country’s efforts. Such collaboration will have to be expanded in the weeks and months ahead.
Low-skilled migrant workers have traditionally been devoid of leverage and voice in the Middle East. But as COVID-19 progresses, ignoring their plight could have serious implications for the post- pandemic economic recovery of both South Asia and the Middle East.
(c) 2020, The Diplomat