By now it is clear that the global economic crisis has many faces. It is more than just a financial problem. Its consequence has spread across the globe in various forms. Global gloom has psychological and social aspects also. People’s confidence level has been badly affected by the job loss and anxiety over new hiring.
Many stories of suicides and murders have been reported due to debts and job loss. Thousands of job losses have been reported since the beginning of the turmoil. From Microsoft to Caterpillar, banking to medical, the slowdown has hit the job market heavily. The software giant Microsoft recently announced a lay-off of 5,000 employees. Caterpillar also reported the same number of job-cut. General Motors is planning to cut 2,000 jobs. The largest bank in America, Bank of America is waiting for a treasury aid of 25 bn $. This is the second big injection.
Citigroup, another US banking giant, has a thumping 8 bn $ loss. This is another giant banking firm in America with millions in foreign deposits. Sony, global giant in electronics has registered a big loss. Its first since fourteen years. This affected Japan’s financial growth too. All eyes are now on the latest American stimulus plan to recover from the financial meltdown. The U.S president Baracka Obama announced a 825 bn dollar economic stimulus plan. The world has marked a lowest ever economic growth rate of 0.5% since the world war II.
Gulf region has not been safeguarded from the downturn. The fall in the oil price has become a threat to gulf economy. The banking sector has been badly affected by the crisis. The fall of Kuwait Bank, one of the top class banks in the region, marked a big loss. Al-Rahji Bank, the gulf’s biggest bank in Saudi, recorded a growth rate, that of 10 p.c lower than last year. Samba financial group, another prominent financial group in Saudi marked 13.5 p.c lower growth than last year due to global recession. The government injected $3bn Saudi Riyal into banks to finance private sector projects. Still small and medium investors are in negative mood and are staying away from fresh investments.
According to experts, it will take time to bounce back to normalcy. New projects have either been cancelled or put on hold in Gulf region. Many expatriates are being sent back to home. Qatar is the least affected nation among GCC, mainly because its major revenue source is Liquefied Natural Gas. But even though the situation in Qatar is not alarming, banking sector is anxious over the global gloom. No fresh appointments have been on the cards, according to sources. Employees are worried about the slowdown due to the risk to job.
Apart from this crisis, expatriates are also worried about the strict measures being undertaken by the authorities for Qatarisation. Abdulla Al Raisi, Deputy Chief Executive officer, Commercial Bank clarified recently “Qatarisation in the banking sector may be one of the most critical factors in Qatar’s future economic growth and reflects the need for more professional Qataris in the work force.”
Saudi prince also directed to make sure that more natives are employed in as many professions as possible. The present crisis and the move to oust expatriates from major fields would affect India, especially Kerala, where gulf revenue is the backbone of economy. Gulf money, the big treasure of Kerala would be affected, if the situation persist for long.
Every year, 40,000 crores is credited to Kerala from gulf countries alone. Now the situation has changed. Many gulf employees are facing either lay offs or long compulsory leave. UAE is the most affected place where thousands of construction workers have either already lost their jobs or are in anxiety over job cuts. Construction industry became a boon of UAE economy. The real estate scene marked tremendous growth. But now everything has turned upside down.
Reports from UAE say that many projects have been either cancelled or put on hold for long periods. Employees are warned of benefits cuts. Global unemployment will upset our society more than ever in recent times. Coming to India, the financial crisis has not yet troubled our banking sector. Nationalaisation of banks by former prime minister Mrs. Indira Gandhi is said to the reason behind the relative insulation of the Indian banking system from the crisis.
But the returning of jobless NRIs from other countries, especially from gulf will adversely affect our social life and destabilize the economy. Kerala, a small consumer state with a large number of families entirely depending on gulf money, will suffer a great deal more than other states in India in this time of recession, according to financial experts.
Despite of the IT boom, Kerala’s unemployment rate has not come down. There has not been much done for NRIs who are just money-vending machines in the eyes of the government. When gulf employees return back to home country, a big question awaits all: Are we prepared to meet their needs?
