Global downturn hits Asia's foreign workers

TN News

Email Print

When Anita Gimmi was unable to find work in her native Nepal last year, she borrowed US$1,300 and traveled to Qatar to take up a two-year contract with a cleaning company there.

Less than a year later, the 26-year-old has been forced to return home still heavily in debt after becoming one of thousands of foreign workers to be laid off as the economic downturn hits Southeast Asia and the Middle East.

"I had no choice but to go abroad because there are no employment opportunities here in Nepal," said Gimmi, whose parents, husband and son all depended on her monthly salary of $155.

"The family had quite a decent life for a while, but now our situation is miserable. Even getting two proper meals a day is becoming difficult as I don't have any income at present."

Millions of families in poor Asian countries rely on remittances from relatives working in unskilled jobs such as construction or as domestic servants in Southeast Asia and the Middle East.

But the World Bank last month forecast a 7.3 percent fall in remittance flows to developing nations in 2009 as the recession hits jobs in richer countries that have traditionally employed large numbers of foreign workers.

Nepalese economist Shankar Sharma said remittances from workers abroad accounted for around 20 percent of the country's gross domestic product (GDP) and were its single most vulnerable source of income.

"Nepal escaped the immediate impact of the global financial crisis, but its effects are slowly becoming visible," he told AFP.

"The growth of remittances declined to 28 percent in 2008/9, from 42 percent the previous year. So the recession has started showing some impact."

Many Asian countries including Nepal, Bangladesh, the Philippines and Pakistan have registered increases in foreign remittances this year.

The central bank of the Philippines - fourth-largest recipient of overseas remittances in the developing world after India, China and Mexico - said such payments reached a record $1.48 billion in May.

But experts say this may reflect a growing number of workers returning home for good, bringing their savings and severance packages with them.

"Such a phenomenon would lead to a sharp reduction in remittances in the following months," said the World Bank in a recent report on the Philippines.

Pakistan's economy relies heavily on its roughly four million expatriates - around two million of them in the Gulf - and registered a record $7.81 billion in remittances for the 2008/9 financial year.

But economist A.B. Shahid said this was "due mainly to the transfer of settlement dues by Pakistani expatriates whose services have been terminated in recession-suffering Gulf countries."

This is a worrying development for Maimoona Ayub, a housewife and mother of four in Karachi who relies completely on money wired home by her plumber husband in Dubai.

"His support helps me raise and educate our children, but now his job is also in danger," she told AFP. "He told me many of his co-workers have been fired and he was prepared for the same fate."

In impoverished Bangladesh, where in the past year alone remittances contributed 11 percent to the GDP, government figures show a huge drop in the number of people going abroad to seek work.

Almost 251,000 people left the country between January and June - a 50 percent drop on the same period last year, according to the Bureau of Manpower and Employment Training (BMET).

BMET Director General Masud Ahmed said the slowing of economies in the Gulf region, where many Bangladeshis are employed, was a key reason for the downturn.

"Unless their economies pick up, we don't see any major boost in the country's manpower export," Ahmed told AFP.

Vietnam's state news agency reported in July that the government was unlikely to meet its target of sending 90,000 people to work abroad this year because of the economic crisis.

Many workers have had to return home before their contracts expired in recent months because of the global recession and steps are being taken to help them, it quoted a labor ministry official as saying.

Vietnamese welder Tran Trung Hieu left for Slovakia last November on a three-year contract, but was expelled in May after his company terminated the contract citing the economic downturn.

The 22-year-old said his family had borrowed more than $11,000 to send him.

"(The company) promised several times to pay back the money but my family hasn't yet received any of it," Hieu told AFP.

"We sent him there to struggle against poverty," said his father, Tran Van Dung. "Now we are in debt."

More Business News