The Cambridge Review of International Affairs

ISSN: 0955-7571 (Print) 1474-449X (Online) Journal homepage: http://www.tandfonline.com/loi/ccam20

Migrant labour in the Persian Gulf: Causes and

consequences

Sara Ahmed

To cite this article: Sara Ahmed (1986) Migrant labour in the Persian Gulf: Causes
and consequences, The Cambridge Review of International Affairs, 1:1, 37-40, DOI:
10.1080/09557578608400005

To link to this article: https://doi.org/10.1080/09557578608400005

Published online: 13 Sep 2007.

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 37
Migrant Labour in the Persian Gulf:
Causes and Consequences
SARA AHMED1

The Persian Gulf region has a long history of migration through its
association with international trade across the Indian Ocean, the economic
activities connected with the annual Hajj pilgrimage (to Mecca) which affects more
than a million people, the forced migrations as a result of the Middle East wars
and the traditional circular movements of Bedouins and other nomadic tribes. In
the present context, the direction, volume and pattern of labour migration changed
significantly with the oil price rise of the 1970s. Rapid growth, and the desire to
harness the new wealth with ambitious development projects were fundamental
determinants of the demand for imported labour in the region. So much so, that
the fall in oil revenues has led to drastic cuts in public expenditure and,
subsequently, massive repatriation of foreign labour.
This article considers the transfer of labour to the G.C.C. countries (the Gulf
Cooperation Council: Kuwait, Oman, Saudi Arabia, Qatar, Bahrain and the United
Arab Emirates) from the Indian Subcontinent, looking at the causes and
consequences, both for the countries and individuals involved. To quote the World
Bank Annual Report 1980: "Migration is not only a benefit to the receiving
countries, permitting urban, industrial and agricultural growth; it also serves as a
major mechanism to redistribute foreign exchanges from the oil-rich states to the
surrounding countries and to increase family incomes in the thousands of village
communities that provide labour."
' Another school' of thought views migration as one aspect of unequal
exchange — a process generated by the uneven development of capitalism
internationally. It argues that migration only polarizes development by the
internationalization of the reserve army of unemployed. Labour is seen as one
element of the international circulation of resources whose market price and value
is determined by the political and economic situation of the exporting country in
the world economy. Thus the decision to import labour is synonymous with the
aims of the Gulf governments to create welfare states: to share wealth (but not
political power) with their own populations, through the expansion of social
services and government employment, industrialization, etc. As a result, workers
are imported but not granted citizenship; migration is only a temporary strategy.
In 1972 there were some 800,000 migrant labourers in the Gulf.2 By the
early 1980s this had increased to 2.7 to 3 million. The degree of dependence on
migrant workers within the GCC countries varies markedly — in 1975, nationals
constituted 58% of the workforce in Saudi Arabia but only 15% of that in the
UAE. What were the reasons for the low rates of domestic participation in the
workforce? First, a large proportion of the indigenous population in 1975 was

1
© Sara Ahmed, 1986.
2
J.S. Birks and C.A. Sinclair, International Migration and Development in the Arab Region
(ILO/WEP: 1980), p. 26.
38
less than 15 years old. Moreover, the widespread expansion of secondary and
university education kept within the educational system boys who might have
entered the workforce at 18. Second, the absence of a large number of women
from paid employment, for social and religious reasons, also affected the size of
the labour force. Other factors included high rates of illiteracy, a lack of
vocational skills and technical education facilities and a preference among
nationals for white-collar jobs.
The early migrant labourers came form the capital-poor Arab states such as
Egypt, Syria, Yemen, Sudan and Jordan. These countries had high rates of
population growth, extensive under- and unemployment, low rates of savings and
capital formation, high domestic inflation, a large traditional agricultural sector
and a high degree of rural-urban migration.
By 1975, the targets embodied in the economic development plans of GCC
states were being exceeded. The inability of Arab suppliers to meet the
consequently expanding demand for labour forced the rapidly industrializing states
to look for sources outside the Arab world — first to the Indian subcontinent and
later to countries of South-East Asia. Not only were workers from these areas
willing to accept jobs and wages that their Arab counterparts found unacceptable
or could not fill effectively, they were also cheaper and easier to recruit (through
private sector agents). Furthermore, they were considered less of a political risk
as they were usually transient and less likely than Arabs to strike deep roots.
Thus by 1975 Arab migrants accounted for only 42% of the labour market
compared to 51% in 1970, whilst the Asian share increased from 26% to 46% over
the same period.
In recent years, labour from the Indian subcontinent has faced increasing
competition from South-East Asian labour. Countries such as Taiwan, Korea, the
Philippines and even China have been able to provide labour at lower cost and
almost immediately on demand. By 1978, the contribution of South-East Asian
labour had risen to 12% of the share of migrant labour in the Gulf from a mere
0.5% in 1970. The type of development being followed by these states was
becoming 'enclave' in nature because of the growing social tensions and the fear
that indigenous populations might be literally swamped by immigrants. Thus,
planners separated new industrial areas from existing urban centres and operated
these on a workcamp basis with the minimum amount of services being provided
— usually housing, food, and some recreational facilities. Limited contacts with
Arabs meant that language was not a problem and Orientals could quite easily be
employed to operate and construct such workcamps. Moreover, the scale of labour
demand were it to be met in the open-market would have been difficult to monitor
and control.
International labour migration involves a bewildering number of costs and
benefits which are by no means easy to evaluate. In the short-run there may be
some relief for the labour-market of the exporting country, coupled with the
acquisition of skills and remittances; in the long-run, however, migration
involves the loss of human and capital resources, and remittances can have
inflationary and demonstrative effect. Added to this are the social and
psychological costs for the individual migrant and his family, problems of
integration abroad (cultural and language barriers), and low standards of living on
the one hand and increased work and loneliness for the women left behind (the
 39
notorious 'Dubai syndrome', with symptoms including such maladies as delayed
menstruation, pains with no physical foundation, and periodic fits of crying).
In India the majority of migrant workers are recruited through private sector
agencies whose raison d'etre is profit-making. Newspaper headlines continually
bear witness to pitiful sagas of corruption and exploitation — of false visas and
emigration clearances being issued, of workers paying large sums of money to
obtain these and then turning up in the Gulf to find all their expensive dreams
shattered... the list is endless. With the growing number of such publicly known
cases, the Indian Government introduced a new Emigration Act of 1983, replacing
the Emigration Act of 1922. Designed to protect the interests of migrant workers
by regulating the activities of profiteering agents, the new Act requires all such
agents to be registered with the Ministry of Labour on the basis of an affadavit
and a security deposit. Emigrants also have to ensure a deposit equivalent to the
single air-fare from their place of emigration to their destination to cover
repatriation costs.
However, many agents complain that the new emigration procedures, though
well-intended, are too cumbersome and time-consuming. They argue that Indian
labour is facing increasing competition from Korea, Thailand and the Philippines
which can supply labour within eight to ten days of notification. (In the Indian
case this can take up to three months). Controlling or regulating labour
migration has always been a sensitive issue. Labour migration is a highly
competitive process given the large-scale unemployment in India and the wage
differentials between India and the Gulf States; increasing competition from better
organized labour-exporting countries and the scale of inward remittances from
wages through the 70s and 80s caused the Indian government to leave the
enforcement of codes of conduct till too late. '
By the early 1980s there were an estimated 800,000 Indian migrant workers
in. the G.C.C. and the level of inward remittances was $2,293 million (1981), an
almost two-fold increase since the mid-70s. According to a World Bank study
(1981) the inflow of remittances increased by 19.4 % a year in India between
1967 and 1979; such remittances covered 49.4% of the trade deficit in 1980, and
39.3% in 1981. The impact of overseas earnings depends on the socio-economic
background of the migrant, the incentives and opportunities for financial
investment at home and the nature of the deposit made. Village level studies in
the State of Kerala, which has exported the largest number of workers, show that
money was generally spent on domestic consumption — purchase of luxury goods
and of land, the building of houses and the liquidation of debts. The lack of
productive investment has had inflationary effects — both the cost of labour and
the cost of commodities have increased.3
In conclusion, then, what are the future issues which must be addressed with
respect to migrant labour in the Gulf? The weakening of the oil market has led to
a drop in construction activity with a move towards a different skill mix requiring
a more highly trained workforce, and an expansion in the services/tertiary sector.
Coupled with this is the growing shift toward "Arabisation" — more jobs are
being given to nationals for socio-political and economic reasons. The
subsequent repatriation of labour has posed enormous problems for the home
country. Reabsorption needs to be examined in the broader context of the

3
Centre for Development Studies, Kerala, Staff working papers nos. 176/180/182.
40
country's development policies — the type of industrialization being followed and
the opportunities for employment On another level there is a need for
enforceable minimum standards both in labour importing and exporting coutries:
on recruitment procedures, on wages, on acceptable conditions of living for
migrants and on the general protection of their interests and welfare. This will
involve greater bilateral and regional cooperation, possibly under the aegis of an
intemational organization (like the ILO) specially in the area of data collection
and analysis to determine future manpower demand and supply requirements.