Modi 2.0 and Returning Indian Migrants: The Case of Bahrain

India’s interests and capabilities extend well beyond the subcontinent. This essay is part of a series that explores the geopolitical dimensions, economic ties, transnational networks, and other aspects of India's links with the Middle East (West Asia) -- a region that plays a vital role in India’s economy and its future. More ...

Introduction

Although “return migration” generally refers to the movement of emigrants back to their homeland to resettle, there is no consistent, universally accepted definition of the term. The lack of a clear definition makes it difficult to quantify and assess the return phenomenon.[1] Data collection is especially difficult in the context of illegal migration and undocumented return. Yet, countries of origin in the temporary migration system, such as India, deal constantly with returning migrants who have been unable to settle or find work abroad. Meanwhile, countries of destination, particularly the Gulf Arab states, have been exploring a variety of strategies to encourage the return of migrants.[2]

The Gulf Arab countries, once paradise for Indians, have been losing their charm as a result of the economic slowdown that followed the global financial crisis, the persistence of low oil prices, and the implementation of workforce nationalization measures. The Qatar-Saudi Arabia diplomatic conflict has exacerbated the situation, leading to the return of a large number of unskilled and semi-skilled migrants to India. Since 2013, the number of returning migrants to India from the Gulf has increased while the the number of Indians migrating to the Gulf has steadily decreased.[3] There are several reasons for this development. First, wages in the Gulf economies have not improved since the global economic crisis, which has led to lower incomes and savings for Indian and other migrant workers. Second, in recent years, the Gulf has seen an influx of workers from the African continent and Philippines into jobs that were traditionally held by Indians. Third, the Gulf Cooperation Council (GCC) governments have introduced a 5% Value Added Tax (VAT) on goods and services for citizens and residents, ending their reputation of being tax-free havens.[4]

The small island nation of Bahrain, with a population of 1.5 million,[5] was the most severely affected by the economic slowdown and declining oil prices in the region. In 2018, Bahrain reached a financial agreement with neighboring countries on a $10 billion debt and fiscal deficit bailout.[6] Bahrain released an action plan to fix its finances and abolish its budget deficit by 2022 by raising electricity and water tariffs, which are currently facing shortage in its expenditure.[7] Bahrain also announced the creation of new bodies to oversee government spending and borrowing, including a debt management office charged with reducing public spending and the introduction of voluntary retirement for state employees.[8]

Bahrain, often hailed as the most accommodating country for migrants in the Gulf region, was the first country to extend the benefit of organization to migrant workers in the form of trade unions.[9] Bahrain currently accommodates about 350,000 Indian expatriates engaged in various sectors in the country; 65% of the Indian expatriate workforce employed in the construction sector.[10] However, the country’s changing economic fortunes spurred efforts to accelerate the Bahrainization of the workforce. The nationalization program has lately extended into the retail and telecommunications sectors. By the end of 2018, employment of non-Bahraini workers had decreased by 0.9% compared to the previous year.[11] In the coming years, job opportunities for migrants in Bahrain are likely to continue to fall because of the slowing economy and the new regulatory mechanisms.

Bahrain’s Economic Slowdown and Its Effects on Expatriate Workers

The aftershock of the 2008 global financial crisis negatively affected the execution of business and increased the unemployment rate, for both Bahraini nationals and foreign workers.[12] From 2010 to 2016, the number of unemployed Bahrainis increased from 5,336 to 8,485 and at a rate of 4.3%.[13] The Bahraini government responded to this challenge by adopting a package of fiscal reforms and by attempting to accelerate the workforce nationalization process.

In 2016, Bahrain’s Shura Council voted in favor of long-term economic interests over public sector spending, and consequently delayed a planned 15% public sector pay raise for at least one year.[14] The economic belt-tightening subsequently announced by the Bahrain government included measures aimed at reducing public expenditure and wasteful spending while also simplifying government processes and increasing non-oil revenue.[15] The government also embarked on efforts to develop a workforce more capable of meeting the demands of the private sector.[16] Importantly, this initiative included the imposition of monthly fees on expatriate workers, with the revenue earmarked job training for citizens, as well as penalties on businesses which declined to reduce their dependence on foreign labor.

In an attempt to redress its unemployment problem, Bahrain initiated a second generation of workforce nationalization policies and programs.[17] Tamkeen (a semi-autonomous government agency) recently announced the relaunch and redesign[18] of the Mohasaba scheme, a business development support program for Bahraini entrepreneurs.[19]

A national action plan has been introduced called the National Employment Program, which aims to promote Bahrainis as the best option for employment in Bahrain.[20] This program includes amending the unemployment insurance draft law in order to increase compensation fees, increasing fees for the Parallel Bahrainization System and the Flexible Work Permit, and redesigning Tamkeen’s Training and Wage Support Program.[21] Under the scheme, businesses will have the opportunity to recruit graduates, who will be offered free professional training and wage support from the Ministry of Labor.[22] In February 2019, Bahraini Members of Parliament (MPs) and trade unionists further renewed a push for Bahrainization, and called for a 25% quota to be made compulsory in all job sectors.[23]

Meanwhile, businesses in Bahrain have been obliged to lower production and consequently reduce the employment size in order to minimize costs. Expatriate workers, who represent a large share of the country’s workforce, have experienced borne the brunt of these cutbacks.[24] As mentioned, the Bahraini government decided to proceed with employment programs for Bahrainis that included measures to discourage expatriates, mainly by reducing sponsorship opportunities and increasing the corporate costs of hiring expat staff.[25] A levy on the employment of foreign laborers has been re-introduced and further measures such as cutting water, fuel, and electricity subsidies have been implemented.[26]

In July 2017, the Labor Market Regulatory Authority (LMRA) announced the launching of the new “Flexi Permit,” a renewable two-year permit that allows any person eligible to work and live in Bahrain without an employer or sponsor on full or part-time basis.[27] This was mainly aimed at curbing illegal expatriates with terminated work permits or those whose work permits had not been renewed. According to the latest available figures, about 17,000 expatriates have applied for the flexible work permit.[28] However, a recent online report showed disapproval of the flexible work permit by the members of the Bahrain Chambers of Commerce and Industry.[29] Further, a group of Bahraini MPs discussed placing a completely ban on expat recruitment in 35 professions in Bahrain’s private sector, increasing the minimum wage for all Bahrainis, extending Bahrainization to all sectors, and increasing fines from BD5,000 to BD20,000 for companies that still hire expats.[30] The Shura Council also passed amendments to the 2015 Private Medical Establishments Law, approved by parliament in 2018, under which efforts will be made to prioritize hiring Bahraini medics over expatriates in hospitals and clinics.[31]

Additionally, the Bahraini parliament has begun reexamining the 2010 Civil Service Law, which sets criteria for government jobs and addresses the hiring of foreign staff at all government entities including companies in which the government owns a 51% stake. Parliament also has called for expats currently working for the government to be replaced by Bahrainis within six months. During debate on the proposal, several MPs argued that the fact that expatriate workers do not spend their wages in the local economy argues for Bahrainization of the workforce.[32]

Returning Indian Migrants from Bahrain

The changing circumstances in Bahrain due to the economic slowdown and unemployment, coupled with the introduction of measures such as the VAT have had a significant negative impact on migrant workers’ earnings, savings, and remittances.[33] Compounding these problems, the cost of living in Bahrain has risen, as utility and fuel bills have increased. In 2018, Bahrain government raised the minimum salary required for foreigners to obtain family visas from BHD250 to BHD400, forcing workers to send back their families immediately. In light of these economic pressures and policies, it is not surprising that the number of Indian workers emigrating to Bahrain has plummeted.[34] What is also not surprising – but has received far less attention than it deserves – is the increasing number of return migrant from Bahrain and challenges they face after having arrived back in India.[35]

Modi 1.0 and Return Migrants

Since 2010, a comprehensive strategy has been gradually set in place by the Indian government under the Manmohan Singh and Narendra Modi administrations for the Gulf region in general. India established institutions to specifically deal with Overseas Diaspora Affairs and Indian migrants have featured prominently in memorandums of understanding (MoUs) and high-level reciprocal visits. Indian migrants in Bahrain have also been part of India’s concept of regional security and have featured in official statements. The Modi government’s Ministry of External Affairs (MEA), headed by Sushma Swaraj, intervened in 2017 when a group of about 500 workers who were employed by a Bahraini private company and had not been paid for months appealed for help through social media networks.[36] Two years later, another company was involved in unpaid wages row for 124 employees, out of which 24 employees returned to India and others continued to work on expired visa permits.[37]

India and Bahrain have held urgent consultations in regard to these issues. Under the auspices of the Indian Embassy in Bahrain, the Indian Council for Relief Fund (ICRF), has been dealing with increasing suicide rates among migrants who have been battling depression amidst loss of jobs, non-payment of wages and financial distress. Other initiatives to combat suicide among expats has been the establishment of the Pravasi Guidance Forum and Palisha Virudha Samithi, which have been providing these migrants with guidance and counseling.[38] The Indian Embassy has provided distressed migrants suitable accommodation, while the on-line MADAD portal enables them and their family members to register their consular grievances online and track their redress.[39]

At the state level, the Kerala government implemented a special entrepreneurial scheme in 2017, to create small business enterprises and training in collaboration with Non-Residents Keralites Association (NORKA). A question about the problems faced by migrant workers upon their return to India was raised by a member of the Standing Committee on External Affairs in early 2018. In this regard, the government launched a State Outreach Programme (Videsh Sampark series) to generate awareness at a state level, including discussing resettlement and rehabilitation of migrants.[40] However, this has not been followed up in the subsequent years and lacks any concrete objectives at the central level.

The annual report of 2017-18 of the MEA does mention the adverse effects of GCC economic slowdown on expatriates and acknowledges retrenchment of Indian workers and loss of jobs resulting from closure of companies as well as premature termination of existing contracts. There is an acknowledgement of the decreasing numbers of workers emigrating to Bahrain. However, reliable statistics on the number of return migrants due to job loss are lacking. Also lacking are the administrative tools needed to register returning migrants, so as to provide them with the requisite assistance and support as well as to facilitate their reintegration into the labor market.[41] In addition, there is little data regarding the number of jobs that have been taken up by return migrants. The government and private banks have made only very limited financial assistance available to those workers who are reluctant to return upon loss of their job, as some are burdened with the repayment of funds they had borrowed to work while others have fallen victim to loan sharks.[42]

Conclusion

Traditionally, the Indian government has responded to hardships and crises faced by Indian workers in Bahrain on a case-by-case basis. This approach has proven reasonably effective in addressing migrant workers’ grievances and facilitating their return to India. However, it has not provided expatriate workers the assistance and support they vitally need upon their return to Indian soil. Return of migrants from Bahrain should be addressed through comprehensive reintegration policies that include emergency financial assistance upon arrival, counseling and psychological support,[43] as well as labor market information, provision for skills certification, accessibility to retraining programs, and protection of acquired rights, under the guidance of both India and Bahrain. How, and how well the Indian government addresses the challenge of return migrants from Bahrain will serve as an example and hopefully set the standard for an effective and humane response to the next waves of return migrants, should lower oil prices persist and labor force nationalization in the Gulf region advance.[44]