Downturn may trigger reverse migration
The Economic Times, February 06, 2009, Page 4
Govts Under Pressure To Save Jobs Of Locals, May Target Expats
Sanjeev Choudhary & Shreya Biswas NEW DELHI
THE global crisis is slowly turning into a migration crisis with thousands of expat Indians likely to return home from developed and emerging geographies in the West, Southeast Asia and West Asia where governments are under pressure to salvage jobs of the native labour force.
A serious downturn in these markets, which has already taken its toll on millions of jobs across the globe, now threatens to give rise to artificial barriers that restricts mobility across borders. “Increasing pressure to employ the local workforce is gaining ground across world markets,” says Delhi-based think tank Indian Council for Research on International Economic Relations (ICRIER) director and chief executive Rajiv Kumar.
There are instances galore of a downturn and protectionism going hand in hand. The UK government is under pressure from striking British workers against employing foreign workers, mainly from continental Europe. The US lawmakers too are finding themselves confronted with the pressure to trim expat workforce levels at Microsoft and the Saudi government has asked companies to retrench imported labour. “Labour mobility will be determined by the political economy,” says Infosys HR director TV Mohan Das Pai. “It’s natural that every country will try to safeguard their own workers’ interests.” And this, he feels, will increasingly happen across countries.
A back-of-the-envelope calculation shows that close to 50,000 software professionals from India work abroad for different duration. However, the future of these jobs may be at stake with reports of US senators Dick Durbin and Chuck Grassley planning to introduce legislation that makes it mandatory for Indian outsourcing firms such as Tata Consultancy Services, Infosys and Wipro to hire American employees before they file for H-1B visas for their Indian employees. Back home things are no different. Under pressure from politicians and local staff, Jet Airways is showing the door to several expat pilots. “History is witness that whenever countries try to prop up protectionism, it intensifies depression,”commerce and industry minister Kamal Nath told participants at the World Economic Forum meet in Davos recently. Many other government and business leaders, who gathered at Davos last week, echoed Mr Nath’s point of view, warning against the rising tide of protectionism.
Domestic concerns over job losses could lead to the erection of new barriers to trade and fuel further job cuts. India’s export sector is already reeling under the massive demand destruction in the developed world and industry lobbies claim that attrition levels have climbed close to a million as a result of this.
The IMF last week pegged global economic growth at 0.5% this year, the slowest since World War II while ILO has warned that as many as 50 million people could be rendered jobless in 2009. “While it’s hard to predict the outcome of a recession of this magnitude, fears are rife that the number of US visas being issued will be curtailed,” says Crisil principal economist Dharmakirti Joshi.
Migration to the Gulf, which employs the largest number of Indians outside the country, has helped several families tide over poverty in the past few decades. There is no centralised data of the number of Indians working abroad, but the ministry of labour web site suggests that at least 30 lakh Indians, mainly construction workers and nurses, are currently employed in the Gulf. As the number of migrant Indian workers swelled over the years, overseas remittances added to the country’s forex kitty and afforded the government comfort in framing economic policy. An unceremonious homecoming of thousands of white and blue-collared non-resident Indians would reduce overseas remittances and impact foreign exchange reserves. “One could expect remittances to come down going forward,” points out Mr Kumar of ICRIER.
Countries in the Middle East or Southeast Asia, where migrants comprise a major chunk of their population, could witness lower economic activity on account of reverse migration. According to research reports by several i-banks, Singapore and Persian Gulf countries, could see their total population dwindle by as much as 10%, jeopardising their overall economic activity. And migrants’ returning to India in droves could put further pressure on the local job market.
THE HOMECOMING
Domestic concerns over job losses could lead to new trade barriers and fuel further job cuts
The homecoming would reduce overseas remittance and impact forex reserves too
50,000 Indian software pros work abroad for different duration
In India too, Jet Airways is showing door to many expat pilots
The Economic Times, February 06, 2009, Page 4
Govts Under Pressure To Save Jobs Of Locals, May Target Expats
Sanjeev Choudhary & Shreya Biswas NEW DELHI
THE global crisis is slowly turning into a migration crisis with thousands of expat Indians likely to return home from developed and emerging geographies in the West, Southeast Asia and West Asia where governments are under pressure to salvage jobs of the native labour force.
A serious downturn in these markets, which has already taken its toll on millions of jobs across the globe, now threatens to give rise to artificial barriers that restricts mobility across borders. “Increasing pressure to employ the local workforce is gaining ground across world markets,” says Delhi-based think tank Indian Council for Research on International Economic Relations (ICRIER) director and chief executive Rajiv Kumar.
There are instances galore of a downturn and protectionism going hand in hand. The UK government is under pressure from striking British workers against employing foreign workers, mainly from continental Europe. The US lawmakers too are finding themselves confronted with the pressure to trim expat workforce levels at Microsoft and the Saudi government has asked companies to retrench imported labour. “Labour mobility will be determined by the political economy,” says Infosys HR director TV Mohan Das Pai. “It’s natural that every country will try to safeguard their own workers’ interests.” And this, he feels, will increasingly happen across countries.
A back-of-the-envelope calculation shows that close to 50,000 software professionals from India work abroad for different duration. However, the future of these jobs may be at stake with reports of US senators Dick Durbin and Chuck Grassley planning to introduce legislation that makes it mandatory for Indian outsourcing firms such as Tata Consultancy Services, Infosys and Wipro to hire American employees before they file for H-1B visas for their Indian employees. Back home things are no different. Under pressure from politicians and local staff, Jet Airways is showing the door to several expat pilots. “History is witness that whenever countries try to prop up protectionism, it intensifies depression,”commerce and industry minister Kamal Nath told participants at the World Economic Forum meet in Davos recently. Many other government and business leaders, who gathered at Davos last week, echoed Mr Nath’s point of view, warning against the rising tide of protectionism.
Domestic concerns over job losses could lead to the erection of new barriers to trade and fuel further job cuts. India’s export sector is already reeling under the massive demand destruction in the developed world and industry lobbies claim that attrition levels have climbed close to a million as a result of this.
The IMF last week pegged global economic growth at 0.5% this year, the slowest since World War II while ILO has warned that as many as 50 million people could be rendered jobless in 2009. “While it’s hard to predict the outcome of a recession of this magnitude, fears are rife that the number of US visas being issued will be curtailed,” says Crisil principal economist Dharmakirti Joshi.
Migration to the Gulf, which employs the largest number of Indians outside the country, has helped several families tide over poverty in the past few decades. There is no centralised data of the number of Indians working abroad, but the ministry of labour web site suggests that at least 30 lakh Indians, mainly construction workers and nurses, are currently employed in the Gulf. As the number of migrant Indian workers swelled over the years, overseas remittances added to the country’s forex kitty and afforded the government comfort in framing economic policy. An unceremonious homecoming of thousands of white and blue-collared non-resident Indians would reduce overseas remittances and impact foreign exchange reserves. “One could expect remittances to come down going forward,” points out Mr Kumar of ICRIER.
Countries in the Middle East or Southeast Asia, where migrants comprise a major chunk of their population, could witness lower economic activity on account of reverse migration. According to research reports by several i-banks, Singapore and Persian Gulf countries, could see their total population dwindle by as much as 10%, jeopardising their overall economic activity. And migrants’ returning to India in droves could put further pressure on the local job market.
THE HOMECOMING
Domestic concerns over job losses could lead to new trade barriers and fuel further job cuts
The homecoming would reduce overseas remittance and impact forex reserves too
50,000 Indian software pros work abroad for different duration
In India too, Jet Airways is showing door to many expat pilots
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