Kuwait’s Expatriate Quota Bill: How does it concern India?

 By Vishakh Krishnan Valiathan
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In September 2011, when the Kingdom of Saudi Arabia announced the Nitaqat (Nationalisation policy) programme[1], there was a huge inflow of Indian migrants flying back to the country. Over the years, it created a furore among the emigrants across the Gulf nations as the fear of implementation of nationalisation policies in these states as well, which in due course has been the case. The dual shock of the outbreak and spread of Covid-19 and the fall in oil prices during the last few months has contributed to various regional as well as nation-wide politico-economic crises leaving the Gulf economies for immediate reforms. Amidst the growing concerns on the pandemic and possible recession, there has been a call for profound indigenisation in the region as well. India, with a working/resident population of more than 8.8 million in the Gulf [2], has been experiencing a unilateral movement of people (mostly dependents and non-working population) from these nations since May 2020 through the Vande Bharat Mission[3] (India’s Repatriation Programme), which majorly consists of a large number of expatriates – including who were unemployed in the Gulf or were irregular workers. Now, with the growing fiscal pressures and the evolving recession, the latest concern for India is Kuwait’s Expatriates Quota Bill.[4]

The timing of the bill is of concern to India. Why is it so? It is estimated that if the bill becomes a law, there would be an outflow of more than 8 lakh Indians from the oil-rich nation back to India.[5] This means that there would be huge repatriation of unskilled, skilled and semi-skilled manpower to the country at a time when the country is already trying to figure out options to accommodate the recent returnees with employment opportunities, which is an uphill task.  The Expatriates Quota Bill had been on the table for the last few years, however, the pandemic urged for internal reforms and the legislators in Kuwait usurped the opportunity to address the issue citing that the 70 per cent of the population in Kuwait consists of expatriates which are rare instances- creating demographic imbalance.[6]

Interestingly, a few weeks back the legislators presented a bill on the salary reduction in the private firms which would also lead to lay-offs, however, it also dealt to protect the Kuwaitis from their labour rights, providing double employment and allowances.[7] The amendment in the labour law of the private sector would allow the employer to reduce the salary of their employees or grant fewer wages with more leaves during the COVID-19  crisis as this may also lead to the replacement of expatriates in private firms as the government exerts that there are more than 150,000 job opportunities that can be replaced by the local manpower. Moreover, government sources in Kuwait revealed that the average salary of a Kuwaiti man in the private sector is about Kuwaiti Dinar (KD) 1,429 and for a woman, KD 879 whereas an expatriate man receives KD 285 and a woman, KD 387 respectively.[8] So, this means that if they replace the unskilled and semi-skilled cheap labour from the expatriate population with their nationals who have returned, it would not be cost-effective and further expensive as their standard of living is much higher than the expatriates. However, this act is to protect their regime, they will have to pay a higher price, replacing a large cheap expatriate workforce.   According to the Indian Embassy in Kuwait, there are more than one million (10 lakhs) Indians- constituting the highest number expatriates in Kuwait, second being the Egyptians. Moreover, approximately 5.23 Lakhs of Indian expatriates are employed in the private sector and their dependants constitute around 1.16 lakhs; around 3.26 lakhs of people are domestic workers while 28,000 people work in the government sector.[9] As per the bill, only 15 per cent of the Indian population can work/reside in the country, which means that around 8.5 lakh Indians would be affected due to this.[10] As only 2.2 lakh Indians will be allowed to stay once the law is processed, domestic workers alone constitute more than 3 lakhs causing concerns among the Indian expatriate population in Kuwait, which seems to be impossible to deal with. The numbers seem to be apprehensive and alarming; this Expats Quota bill would not only affect the livelihood of a large Indian population and their dependents but also influence the inflow of remittances to India as Kuwaiti Dinar fares high in exchange rates (one KD is equivalent to 243.06 Indian Rupees as of July 6, 2020).

As per an Indian expatriate in Kuwait, who wanted to maintain anonymity, the private firms in Kuwait have already started to lay-off a large share of manpower- including Indians majorly in the last few weeks. As people who have already lost jobs since early this year along with their dependents have been leaving the country to India in the repatriation programme due to Covid-19. However, expatriates who have lost jobs in the last month are also been forced to leave due to lack of opportunities but some of them who do not want to leave is involved with part-time employment and are in search for a full-time job or staying with their family until an opportunity arises, which is uncertain as well. Regarding the effect on the amendment of the labour laws, the source also mentioned that recently certain private firms, especially in a few industrial and allied sectors, have started requesting expatriates who are earning more than KD 1000 monthly to leave (slow process) and are replacing them with the local population who have returned to their country.[11] Along with this, it is rumoured that the administration plans to implement a process where an expatriate can work for a maximum of only 15 years and once completed will have to leave the country.[12] This would be affecting a large number of skilled expatriate man force as well. With a conscious worry among the expatriates of losing their employment status, the fear among the most is the return and the consequences they have to face due to the lack of opportunities in India which would have a direct impact on their standard of living, nature of spending and their societal status. However, the Kuwaiti government’s decision seemed as an anticipated decree due to the regional economic downfall and further contemplating the need for reforms to safeguard their citizens.[13] Incidentally, the legislators in Kuwait seized the opportunity to address the Expats quota bill, which was backed by an earlier bill on the shift in labour laws in the private sector during the first week of June.[14] Moreover, the Expats quota bill would be sent to the respective national committee to create a comprehensive plan, which would extensively witness a substantial share of outflow of expatriates in the next six months and further a gradual increase in the workforce leaving the country in the foreseeable future.[15] Even though this would largely affect the unskilled and semi-skilled manpower the most, the expatriates from India and Egypt have expressed their concerns on the same and would be hoping for a constructive remedy from the government, otherwise, their livelihood will be in dire straits.[16]

Now, India has been at the receiving end for the last few months with large numbers of expatriates returning from across the globe, caused by the pandemic. Majority of them have either lost their jobs or have travelled in search of a job but failed to get one; there is also a large share of illegal migrants as well in the list. However, the Gulf leads in the repatriation with more than 9-10 lakh Indians expected to return from the region.[17] The Indian government and the respective state governments are in a conundrum to solve this issue which is a matter of national concern. Amidst this, the Kuwaiti government’s new bill would only add it. Moreover, Kuwait is a top source for remittances for India and amounted to USD 4.8 billion as of 2018.[18] The bill would probably lead to a decline in the flow of remittances to India and especially would be witnessing a decline in the social remittances (donations to institutions) in the post COVID era. The major issue that India would face is the large accumulation of the categorically skilled emigrants who have returned and the need in accommodating them into the Indian economy by establishing projects for employment. In the short run, the returnees would spend their savings but there would be a point where they would be searching for employment and which in turn would affect the livelihood; the government will have to find a solution to the same. Therefore, the respective governments have to be prepared in advance to deal with a migratory and employment crisis that will emerge shortly in a post-Covid economic scenario.

End Notes

[1] S Ramachandran, “Saudi’s Nitaqat Law: Trouble for Indian Expats?”, The Diplomat, April 23, 2013,https://thediplomat.com/2013/04/saudis-nitaqat-law-trouble-for-indian-expats/, accessed on July 7, 2020.

[2] MEA, “Kuwait”, Overseas Population of India, Ministry of External Affairs, 2019, http://mea.gov.in/images/attach/NRIs-and-PIOs_1.pdf., accessed on July7, 2020.

[3]  MEA, “Vande Bharat Mission- List of Flights”, Covid-19 Updates, Ministry of External Affairs, Government of India, June 26, 2020, https://www.mea.gov.in/vande-bharat-mission-list-of-flights.htm, accessed on July 7, 2020.

[4] B Izzak,”Assembly legal panel studies expats quotas in Kuwait”, Kuwait Times, July 2, 2020, https://news.kuwaittimes.net/website/assembly-legal-panel-studies-expat-quotas-in-kuwait/, accessed on July 7, 2020.

[5] “Kuwait legislative body approves expatriate quota bill”, Arab News, July 3, 2020, https://arab.news/pq378, accessed on July 6, 2020.

[6] “Bill to protect rights of expats through insurance system”, Arab Times, Kuwait, July 6, 2020, https://www.arabtimesonline.com/news/bill-to-protect-rights-of-expats-through-insurance-system/, accessed on July 6, 2020.

[7] “Salary clause in labor law shift hit- cut upto 50 %”, Arab Times, Kuwait, June 3, 2020, https://www.arabtimesonline.com/news/salary-clause-in-labor-law-shift-hit-cut-up-to-50/, accessed on July 6,2020.

[8] Ibid

[9] “Indian Community”, Embassy of India, Kuwait,  February 13, 2019, https://indembkwt.gov.in/Indian-community.php, accessed on July 6, 2020.

[10] PTI, “Eight Lakh Indian may be forced to leave as Kuwait approves expat quota bill”, The Hindu, July 6, 2020, https://www.thehindu.com/news/national/eight-lakh-indians-may-be-forced-to-leave-kuwait-as-the-country-approves-expat-quota-bill/article32000615.ece, accessed on July 6, 2020.

[11] Personal Telephonic conversation with an Indian Expatriate who is based in Kuwait on July 6, 2020.

[12] Kuwait News, “Expats can no longer stay for more than 15 years in Kuwait”, Kuwait24Hours, June 16, 2020, https://kuwait24hours.com/kuwait-news-2/expats-can-no-longer-stay-for-more-than-15-years-in-kuwait-2/?doing_wp_cron=1594150771.2794370651245117187500, accessed on July 7, 2020.

[13] PTI, “Eight Lakh Indian may be forced to leave as Kuwait approves expat quota bill”, The Hindu, July 6, 2020.

[14] “Salary clause in labor law shift hit- cut upto 50 %”, Arab Times, Kuwait, June 3, 2020.

[15] “Assembly panel approves quotas for expats”, Arab Times, Kuwait, July 4, 2020, https://www.arabtimesonline.com/news/assembly-panel-approves-quotas-for-expats/, accessed on July7, 2020.

[16] V S Kumar, “Expatriates worried over Kuwait’s proposed quota bill”, The Hindu Business Line, July 6, 2020, https://www.thehindubusinessline.com/news/national/expatriates-worried-over-kuwaits-proposed-quota-bill/article32006003.ece, accessed on July 7, 2020.

[17] A Srinivasan, “Migrant flows will change, they will take time to come back to the city, says Scientist S Irudaya Rajan”, The Times of India, May 3, 2020, https://timesofindia.indiatimes.com/india/migrant-flows-will-change-they-will-take-time-to-come-back-to-the-city-says-scientist-s-irudaya-rajan/articleshow/75510677.cms, accessed on July 7, 2020.

[18] PTI, “Eight Lakh Indian may be forced to leave as Kuwait approves expat quota bill”, The Hindu, July 6, 2020.