Saudi's "nitaqat" policy and India's connection

Is there a genuine likelihood of huge job cuts or is it just a media-fuelled fear psychosis? Many in Kerala and Andhra Pradesh—the two southern states that form the bulk of the two million Indian workforce in Saudi Arabia—have expressed concern that Riyadh’s ‘nitaqat’ policy may lead to large-scale layoffs of Indians employed in the Gulf country. Kerala was, in particular, on tenterhooks. As the first of the deported Malayalis arrived at Kozhikode airport, the state expectedly went into a near-hys­teria. This, even as it is unclear exa­ctly how many workers will be affected. 

However, ask MEA officials and former Indian diplomats and they insist it’s all an over-reaction. “There is abs­o­lutely no threat to Indians working in Saudi Arabia. Hardly anyone will be affected by this policy,” says Talmiz Ahmad, a former ambassador to Riyadh. Of the two million Indians employed in the country, over 70 per cent are blue-collar workers, while the rest are professionals working in the financial, energy, medical and education sectors. Talmiz Ahmad, Ex-Diplomat says that, there’s no threat to the Indians working in Saudi Arabia. Hardly anyone is likely to be affected by this policy. 

Nitaqat was adopted by the Saudis three years back to ensure that their burgeoning youth population got emp­loyment with the private sector in the country. The Saudi government is now looking to expand nitaqat to medium- and small-scale enterprises in the cou­ntry. Under the policy, Saudi nati­onals have to be employed in a 1:10 ratio at the various enterprises that operate in Saudi Arabia, which means every 10th worker has to be a local.

The Roll Call

v     ‘Nitaqat’ introduced to encourage the employment of Saudi nationals in the private sector

v     Saudi firms are graded as White, Green, Yellow and Red. The Red category is least nitaqat-compliant and faces fines, staff restrictions.

v     Some 100-odd people deported back to India under the new law

v     Panic in Kerala’s Malappuram, the highest exporter of migrants (about 2 lakh) to Saudi Arabia.

v     Indian government surprised over the strong reaction to nitaqat, says there will be very limited impact on Indian workers

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Try telling that to the residents of Malappuram district, which has nearly 2 lakh workers in Saudi Arabia. “The picture we get is that Keralites will not be affected too badly, but about 5-10 per cent may get deported,” says Kamal Varadoor, news editor at the Chandrika newspaper in Kozhikode. A majority of Malappuram’s migrants in Saudi run small general stores, cafeterias, vegetable shops, hotels—mostly ‘sponsored’ by an Arab (but not run by him). The worry is that these establishments may not be able to enforce the programme and may have to wind up. Their workers are the most likely to be affected.

 Local MLA P. Ubaidulla tries to play down these fears. Less than a hundred people have returned. The central government is in touch with its Saudi counterpart to ensure that any resident on an illegal or ‘free visa’ can make proper documents. The state will bear all expenses if they are ever deported. The Centre is in touch with the Saudis to ensure that any resident on a ‘free visa’ can get proper documents – says Mr. P. Ubaidulla, Malappuram MLA

Clearly, when the law gets impleme­nted more stringently, as it is slated to be, migrants without pro­per docum­e­nts will be at the receiving end. There are a number of Keralites hanging out in Saudi on what is called a ‘free visa’. The law very clearly says that foreigners should work only under the Arab sponsor that brought them into the country and only engage in the profession that is cited in the papers. Many of the Malayalis and other Indians move to better jobs once they get here but this renders their stay illegal. “There is nothing called a ‘free visa’ in Saudi. It is a visa business that has been created by Indians,” says Ashraf Venghat, general secretary of the Kerala Muslims Cultural Centre, Saudi Arabia.

Saudi Arabia is one of the richest cou­ntries in the world and its government can easily pay for the younger generation, large numbers of whom are unemployed, by giving them allowances. But under nitaqat, companies are being asked to recruit and train Saudi nat­ionals—as an incentive the governm­ent picks up their salary in the first year. By the second year, the Saudi government feels their youth will be trained enough to work on their own steam.

Of course, there’s a strong political logic to this—if Saudi Arabia has to evo­lve as a modern nation, it cannot have a large number of its own people living only on government subsidies while much of the running of  industry and business are left in the hands of outsiders. Also, as the state well knows, a young Saudi who remains outside the job market and spends most of his time sitting at home is more susceptible to extremist propaganda, may even take an active interest in trying to destabilise the existing political structure.

The Malayalis are well-networked and they’ll use every connection, whether family or political, to stay on in the Gulf – says Mr. S. Irudaya Rajan, Centre For Development Studies.          

In the past, the Saudi royals have faced serious threats from home-gr­own extremists and terrorists, of whom Osama Bin Laden was the most prominent. Coupled with this has been the fear of the ‘Arab Spring’ virus, which led to regime changes in many of the countries in the region. “Much of what is being done by the Saudis is to ensure a better, equitable future for their youth. It is not being done at the cost of the Indians working there,” a senior MEA official told Outlook.

S. Irudaya Rajan, of the Centre for Development Studies, who has for long studied migration from Kerala, says the impact will be minimal. More Mala­y­alis have graduated from the unskil­led to the skilled segments, he feels. But it’s not the unskilled worker or the highly skilled worker who’ll be aff­e­cted by nita­qat—Saudis are unwilling to do menial jobs, and aren’t always highly qualified—but the mid-level worker. There’s also a herd dyna­mic at play. “The Malayali has been in the Gulf for over 40 years, unlike the newer migrants from UP or Rajasthan. The Malayalis are well-networked and they will use every connection, whet­her family or political, to stay on in the Gulf,” says Rajan. Suddenly that hard-earned balance in the ecosystem looks fragile.