How the Saudi recession is hurting Pakistani labour
The reality encountered by Pakistani migrants searching for secure jobs in Saudi Arabia is often bitter.
For Iftikhar Ahmed in Riyadh, Saudi Arabia, much of 2017 passed in anxiety. There were times when the 40-year-old from Azad Jammu and Kashmir didn’t have any money for food or to make a call home to his family. His experience was not an isolated one.
Ahmed, along with 300 others from India, Pakistan and the Philippines, had been waiting since 2016 for his salary to be cleared. Their employer, Empower Contracting, a subsidiary of the Bin Laden group, shut its operations, but for some of the employees, salaries had been outstanding for months beforehand. Videos shared by Ahmed would often show the employees protesting with placards outside embassies and labour courts.
It all began at the start of 2016, when the biggest builders of Saudi Arabia, the Bin Laden Group and Saudi Oger Limited, went bankrupt, as a result of which thousands of employees were laid off. For Ahmed and his fellow employees of Empower Contracting, it meant a delay in salaries, with some not being paid for as long as 11 months.
Around November 2017, with the exception of three workers, the company cleared the salaries of all Pakistani workers. Thirty-one Indian workers still continued to struggle for their share. But for Ahmed, this wasn’t the end of the ordeal, as it took him another few weeks to get an exit stamp on his passport and leave for Pakistan.
Five months later, it is peak summer in Pakistan, with urban centres reeling from the effects of an unforgiving sun. Coupled with the heat, it is Ramazan, when the Muslim world fasts for a month. Speaking over the phone from Azad Kashmir, Ahmed sounds undeterred.
“I did receive an offer from a Saudi-based German company for mechanical foremanship just recently,” he says. “It didn’t work out because of visa issues. I’ve been unemployed for many months. The only jobs you get here are [paying] 15,000 to 20,000 rupees a month [US$112–150]. How can a household survive on this salary?” he asks. “I can’t afford to set up any business as it needs some capital to rely on as backup. I have no such arrangement.”
For the same salary, Ajmal Ahmed is feeding his wife and five children. “I’m able to provide my kids with two meals a day working at a loom, if power outages don’t ruin the day,” he says. “I’m happy here. I became poor when I went to Saudi Arabia.”
Ajmal spent a year-and a-half in Makkah and never, in his wildest dreams, does he want to go back to Saudi Arabia for work. During his first one-and-a-half months there, starting February 2016, Ajmal would hide in his room.
“We had no iqama [residence permit], so it wasn’t safe to even step out. I would have nothing to eat,” he recalls. “In my contract, I was signed as a plumber but I was taken for masonry most of the time. The iqama was supposed to be given by the company along with a visa but this didn’t happen. I gave 300 riyals [US$80] from my own pocket for it. In all my 18 months of stay there, I worked only five to six months. The rest of the time I was in my room.
“I wouldn’t call home for months. I had nothing to say about why I wasn’t sending money. On top of that I had to pay 300 riyals [US$80] every month to my visa owner. When I couldn’t pay him for a couple of months, he would blackmail me and tell me he would have me blacklisted from the sponsor. I was promised I’d get work for 100 riyals daily [US$26.66], but ended up doing it for 50 to 60 riyals [US$13–16] when I had no other option,” says Ajmal.
For Ajmal, the entire thing was a lie from the very start. According to him, a certain Mian Ghafoor, a well-known personality in his village in Faisalabad, was sending a few workers abroad when Ajmal requested him to include him as well.
“He told me once you get to Saudi Arabia, you will be able to send 40,000 rupees [about US$299] back home — that is, after deducting my own personal expenses. I was also told that the company would bear my lodging. Nothing of this sort happened. I had no place to stay. In fact, I had no job at all other than masonry here and there for two weeks at most. I had paid Ghafoor 350,000 rupees [US$2,618] for the visa, paid for my own passport, ticket and medical.”
In his scattered work regimen, Ajmal can recall one place where he worked for a month and was paid nothing. At another place, he was signed up for 130 riyals a day [US$35], of which he was paid 80 riyals [US$21], and the rest would go in his contractor’s pocket.
“I worked with this particular employer for two months and three weeks, got fed up and stopped going to work. The contractor bullied me and said he wouldn’t pay me for all the months I had worked if I didn’t come for work. He swore at me,” says Ajmal. “All together, I got 600 riyals [US$160] out of that job.”
Ajmal wanted to leave Saudi Arabia together with 21 others, but the visa agent would neither end the contract nor let them be free. “We couldn’t chase the agent on our own because we didn’t have a visa for Jeddah,” he says.
But help did come for Ajmal and two other Pakistani workers. An old acquaintance of his was friends with a local who had connections with the police. According to Ajmal, the police called the agent in Jeddah and told him he had five hours to get to Makkah with the passports of the three men. Ajmal’s friend gave the three men some money and they made it to Pakistan. He left 175,000 rupees [US$1,309] worth of unpaid salary behind.
Abid Hussain, now 22 years old, spent a year-and-a-half in Saudi Arabia as well, and came back with five months of salary. “The total pending salary was of nine months,” he says. “My employer paid me five months of it, through which I bought my ticket to Pakistan and never looked back.
“One of my cousins had told me about an agency in Faisalabad that was sending some men to Saudi Arabia. I got a visa and was happy to go. I got stuck there as soon as I landed.”
For Abid Hussain and hundreds of other Pakistanis, it was common to hear that the company had no money to pay to its employees.
“The food was on us and not being paid on time meant no money for anything,” he says. “I couldn’t pay for my mobile bill.”
There were many times when Abid Hussain and others would try to get in touch with the agency in Faisalabad who sent them to Saudi Arabia. The agent would tell them to wait and he would do something. In November 2017, Hussain came back to Pakistan with 40 others. Abid Hussain visited the agent’s office.
“He was no longer there in his office. I got to know that he left for Malaysia. Someone else sits in his chair now,” he says.
Iftikhar, Ajmal and Abid are examples of thousands of Pakistani workers from Saudi Arabia who have been forced to come back home due to a variety of reasons.
Saudi Arabia: From most-preferred destination to most-exited country
Saudi Arabia has historically been the most sought-after destination for Pakistani migrant workers. This was equally true for more than a million Asian migrant workers, according to the Asian Development Bank’s latest report, “Labour Migration in Asia”. This changed in 2016.
The drop in emigration from Pakistan to Saudi Arabia between 2016 and 2017 was 41 percent. The decline was most noticeable starting September 2016. The Bureau of Emigration & Overseas Employment, a government body that oversees migration in Pakistan, explains that at this time Pakistani workers (along with Indian and Filipino workers) were restricted to camps owned by companies as many were unpaid. They didn’t have enough money to travel home or stay through legal means in Saudi Arabia.
“The drop observed in 2016 can be related to the country’s economic situation, as well as to the ongoing ‘Saudisation’ policy, first introduced in 2011, which aims at reducing foreign worker reliance,” the Labour Migration in Asia report concurs.
Although there is no specific data available on the numbers of returning migrants, it was reported that Saudi Arabia sent back around 40,000 Pakistani workers towards the end of 2016. In the first half of 2017, that is, between January to June, only 77,600 Pakistani migrants went to Saudi Arabia in comparison to 233,287 in 2016, marking a decline of 75 percent. The Bureau of Emigration explains that the emigration decline to Saudi Arabia is the most substantial amongst the GCC countries.
Changes in Saudi Arabia’s employment trends appear to be multifold. As is evident through Iftikhar’s story and the Bin Laden Group’s bankruptcy, the public department, responsible for most of the construction projects in the kingdom, delayed their payments for government contracts.
The Bureau of Emigration & Overseas Employment further analyses that the decline in oil prices, in turn, affected the transport and infrastructure budget of the kingdom by 63 percent in 2016. The low revenue generation from oil companies affected the labour industry, consequently affecting the livelihood of Pakistani workers, many of whom were engaged in construction and infrastructure projects.
The Asian Development Bank writes: “Labour migration from Pakistan also declined 11 percent in 2016 to 840,000 people after it had reached a peak year in 2015. This downward trend is likely to continue into 2017 since partial figures up to October indicate only 450,000 departures for overseas employment from Pakistan.”
Workers who recently returned to Pakistan complain about lack of consistency in their work. Either the proposed project could not continue due to lack of funds or what was promised to workers was not what they got when they reached Saudi Arabia.
“I was signed up for plumbing but did everything,” says Ajmal from Faisalabad. “The contractor would take us on a project and we would work for 15 to 20 days and then we were back in our rooms waiting for work for weeks.
Despite the drop in emigration, the largest number of migrant workers to Saudi Arabia in 2016 continued to be from Pakistan. Over 460,000 citizens of Pakistan followed this route that year, which represents an 11 percent drop. In 2017, however, Bangladesh appears to have replaced Pakistan as the main labour provider to Saudi Arabia, reflecting changing trends in Saudi Arabia’s approach to Pakistani labour.
Ajmal, who stayed until 2017, felt that Pakistani workers are increasingly being discriminated against.
“During the times we all would wait for work, contractors would hire Indian and Bangladeshi workers and take them for work,” he says. “They were also able to acquire a second iqama [residence permit] after the first one expired in a year.”
There is a common feeling among Pakistani workers that since workers of other nationalities tend to settle for lower daily wages, companies prefer to employ them.
“Our [Pakistani] economy has been going down and the currency conversion doesn’t help us. How much should one keep for personal use and what to send to family back home?” says one worker.
As per numerous media sources, half a million Pakistanis were deported between 2012 and 2017, half of which (about 280,052) were from Saudi Arabia. The figures indicate an increasing trend in deportation from Saudi Arabia, starting in 2012 with 17,369 Pakistani workers being deported — 45,456 in 2014 and going all the way up to 57,784 in 2016. The reasons for deportation are said to be overstaying visas, illegal entry and immigration.
As many as 39,000 Pakistani workers were deported between the end of 2016 and February 2017. The Saudi media reported that a number of Pakistani nationals were involved with the Islamic State (IS). A few were also held for drug trafficking, forgery and physical theft. The Saudi Gazette also reported that the kingdom’s security forces had intercepted a terrorist operation in 2016 in which two Pakistanis, a Syrian and a Sudanese national were found planning a terrorist activity at the Al-Jawhara Stadium in Jeddah. More than 60,000 spectators were present at the stadium to watch a match between the Kingdom of Saudi Arabia and the United Arab Emirates. “The terrorists had booby-trapped trucks loaded with 400 kg of explosives,” according to the Saudi Gazette.
In 2015, when crisis hit the Bin Laden Group, and the employees of Empower Contracting weren’t paid for three months, they decided to go on a strike. For Zulfiqar Hussain, a 32-year-old resident of Rawalpindi, six more months went in waiting. His health insurance began to expire and savings were fast running out for him and 50 other Pakistanis.
“I resigned but it wasn’t the end for me. We waited another 10 months for money and gratuity settlement and to simply get our exit from the kingdom.”
According to Zulfiqar Hussain, 80 percent of those who initiated the strike were Pakistani nationals. Zulfiqar Hussain has spent seven years in Saudi Arabia as a mechanical supervisor and thinks Pakistani workers are the first ones to speak against any violation of rights.
“Even in small companies, the smallest of problems will be called out by Pakistanis first. They are eyed as trouble-triggers often.”
The shift in Saudi Arabia, from being the largest importer of Pakistani labour, to now reporting high numbers of deportations and voluntary returns, leaves Pakistan in a murky situation.
Remittance reduction and its results
The return of migrants in huge numbers raises a lot of questions, not only about their settlement and employment, but also on how Pakistan’s economy is to bear the remittance gap. From January to November 2018, 346,467 workers migrated from Pakistan, as compared to 496,286 during the whole of 2017. Consequently, remittances to Pakistan also saw a steep drop in the last two years. For the fiscal year 2016–17, overseas Pakistanis sent about US$19,351million, down 2.84 percent from US$19,917 million in the previous year.
Saudi Arabia and the United Arab Emirates (UAE) host the bulk of the Pakistani labour force abroad and, hence, send the most remittances back to Pakistan. Remittances from Saudi Arabia alone faced a fall of 8.35 percent in fiscal year 2016–17.
Last month, in December 2018, the State Bank reported that remittances from overseas Pakistanis jumped 12.5 percent to $9.028 billion in the first five months of the fiscal year, from $8.021bn in the same period of the previous year. That said, if analysed on a monthly basis, remittances dived by 19.6 percent to $1.609 billion in November, as compared to the $2 billion earlier in October.
As of now (i.e. the fiscal year which runs from July 2017 to June 2018), the State Bank of Pakistan states a -11.17 percent growth for 2018, since migrant workers are still the largest source of remittances to the country, despite the decline in numbers.
The results of these aggregate declines bear all too human a face.
As the head of the family, with two young siblings and five children to look after, Ajmal thought selling his plot of land to emigrate was a justified gamble: the money would be recouped in the coming days. He moved his family to a rented house, sold his plot and made the visa and ticket arrangements, which cost him around 200,000 rupees [US$1,496]. His wife was expecting their fifth child when Ajmal left for Makkah. After two months in Saudi Arabia, with no work prospects in sight, Ajmal started getting anxious. “I hadn’t sent a single penny home. My wife was due. They were very difficult days.”
One of Ajmal’s younger brothers was working and bringing in about 10,000 to 12,000 rupees [US$75–90] every month. That’s what the entire household relied on, but the rent remained a worry for the family. A year later, Ajmal’s wife, children and siblings were told by the landlord to leave the house. They had failed to pay any rent during that time.
While Iftikhar Ahmed was suffering in Riyadh, there were repercussions at his home in Rawalpindi, too. His brother had taken it upon himself to take care of Ahmed’s wife and daughter who studied in fourth grade.
“I think about him and it worries me a lot,” says Ahmed’s brother. “We are making it by somehow, but does he have food to eat? How is he living without any money?” The family also once took a loan from another brother in Bahrain to get by as many times they wouldn’t have any food at home.
The constant devaluation of the rupee against the US dollar spurred inflation in the country. In June 2018, the rupee dropped by 9.5 percent against the dollar, reaching a whopping 124.50 rupees to the dollar in the open market. In instances like this, when reserves are constantly relied upon to stabilise such market fluctuations, remittances play a vital role.
“The context for return migration to Pakistan is thus characterised by, on the one hand, instability, and on the other, future potential. It is also a context where there is substantial reliance on remittances, disproportionate to the number of international migrants,” indicates a 2015 policy brief by the Peace Research Institute Oslo (PRIO).
For this reason, Pakistan not only needs to invest in a clearer and effective migration policy, but also needs to have an expansive approach. It needs to look beyond Saudi Arabia and the UAE as its only key sources of remittances and regulate migration to other countries, too.
Future prospects in GCC countries
The Bureau of Emigration & Overseas Employment explains that the emigration decline to Saudi Arabia is the most substantial amongst the destination countries for Pakistani workers. However, while Saudi Arabia noticed a decline of 48 percent in overall labour recipients between January to June 2017, other Gulf countries observed a decrease too. A comparison shows that emigration to the UAE was only down 6.27 percent and to Bahrain 4.41 percent over the same period, while Oman decreased by 3.75 percent in comparison to 2016.
The future prospects are generally bleak.
Oman is said to have several developmental projects, such as the construction of hospitals, airports and malls, in process. However, according to the Bureau of Emigration, Oman is only taking in migrants as per the designated proportion for these developmental projects. Like Saudi Arabia, its long-term plan is to employ Omani nationals in both private and public sectors. In the foreseeable future, jobs for Pakistanis are going to reduce in Oman as well.
Similarly, despite being the hub of trade routes and attracting a considerable number of Pakistanis, Bahrain has reduced the number of Pakistani migrants it employs. However, the country intends to start a few developmental projects in oil, gas and infrastructure, which may encourage migrant worker employment in the near future.
On the other hand, Kuwait showed an increase of 56 percent in labour absorption from Pakistan. The Bureau of Emigration shares that it is the semi-skilled and skilled worker categories that are the most in demand in Kuwait. “It is expected that the demand for highly-qualified and highly-skilled manpower will increase in the forthcoming year,” states the bureau’s 2016 report.
Qatar, too, showed a 20 percent increase in the number of Pakistani migrants last year. Mass development is happening in Qatar as part of its Vision 2030 plan. Pakistanis employed there are mostly on the technical side of construction and development projects. Despite garnering a great deal of media attention in the last four years owing to the human rights violations reported against migrant workers, Qatar is still a thriving destination for migrant workers.
Given the growing trend of returning labour from its most preferred destination countries, Pakistan needs to ask itself some hard questions. How does the country plan to absorb this high number of returnees, and what is the future of these skilled and semi-skilled labourers?
One would think that after bearing so much, both financially and emotionally, a worker would want to return to his home country at the first given opportunity. But this doesn’t appear to be the case for many Pakistani migrants. When workers wait for months for their dues to be cleared, some think of sticking around a little longer, in case they find a better alternative job.
Jadoon, for example, doesn’t plan to return to Pakistan, if he can avoid it. He’s a survivor of the financial crisis that hit the Bin Laden Group and forced thousands of Pakistani migrant workers to return home, giving up salaries worth years of service. At the peak of the crisis, another subsidiary of the Bin Laden Group offered him a job and he decided to go for it.
“I thought going back and starting from scratch would be more difficult for me,” says the 36-year-old who went to Saudi Arabia when he was 25. “I thought it was better that I remain on duty and recover my previous dues that are still pending with the company.”
As of now, Jadoon is still waiting for six months’ worth of salary from previous years, while his iqama stands expired. “I mostly stay in my compound and if the police catch us on the way or back from duty, the company is responsible for us then. Between 2015 and 2018, the situation has improved a lot,” he says.
“I don’t plan on going to Pakistan anytime soon. You see, Saudi Arabia has nothing but oil and we [Pakistan] have everything and yet we spend our lives like slaves of our political system.”
Zulfiqar echoes the same thought: “How […] can a worker manage in the meagre income you get in your home country? There is no value of hard work here. With the way the rupee is devaluing, how can we survive here [in Pakistan]?”
Haniya Javed is a journalist based in Karachi. This essay is a modified excerpt from Uncertain Journeys: Labour Migration from South Asia, published in December 2018
Published in Dawn, EOS, January 13th, 2019