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International Labour Migration from Independent India

S. K. Sasikumar

I. INTRODUCTION

The migration of races across countries and continents has been a regular feature of human history. However, the quantum of international migration has now reached an extent where it has become a major factor in global change.  Never before have such large numbers of people left their country of origin, either permanently or for short duration, as economic migrants, or as refugees and asylum seekers.  The World Development Report 1999/2000 estimates that more than 130 million people now live outside the countries of their birth.

Migrant-sending and migrant-receiving countries recognizing the importance of such world wide migratory pressures have begun to intensify their efforts in framing appropriate policy responses.  Such policy responses in different countries have mainly been the outcome of the pervasive impact which the large-scale international labour migration has had on their economic and social structures.  In fact, many developing countries in the world today are relying on remittances of migrant workers to finance development.  The annual value of remittances from overseas workers (who number around 35 to 40 million) are currently estimated to be nearly $66 billion – which is second in value only to oil in world trade and more than even the current level of international development assistance.

Increasing internationalization of production, trade and finance, globalization of economic networks, liberalization of the movement of capital and technology, rapid population growth in the South, high economic growth and low fertility in the newly industrializing countries are all factors that may exert additional pressure both in the migrant-sending and migrant-receiving countries for larger international flow of skilled and unskilled labour in the immediate decades to follow. Apart from these factors, the Gulf Crisis of 1990 and certain post crisis developments in the Middle East – centre stage for contract labour migration in the last two decades – have also wide ranging implications for future international migration flows, particularly for labour exporting countries of South and South East Asia.

n an emerging global scenario where the immediate future is viewed as the ‘age of migration’, it is imperative that attempts are made, especially in a leading labour exporting country like India, to examine the implications of the contemporary migration flows so as to evolve a more purposeful migration policy framework aimed at the maximization and socialization of benefits from migration in the wider context of economic development.  This should particularly be based on the experiences India has had with labour migration phenomenon in the past.  It is in this context that an attempt is made in this paper to detail out the trends, pattern composition and characteristics of international migration flows in the post-Independence period. It deals with migration flows to the industrialised countries as well as to the Middle East. The paper also examines various aspects pertaining to the overseas labour recruitment processes in India. It analyses the information on different categories of recruitment agencies, their profile, modes of operation, efficiency and performance, regulatory mechanism and their impact and implications for migrant workers. It also highlights certain policy considerations on migration which India’s experience with labour export suggests.  

II. INTERNATIONAL MIGRATION FROM INDEPENDENT INDIA

In India, the migration of its labour force within and across its national boundaries is nothing new. India’s geographical position has ensured contact with the Persian Gulf region and South East Asian countries for trade in goods and movement of people, a contact which goes back to several centuries.  The migration of workers on a significant scale was, however, to come much later. It began in the colonial era and continues now to independent India.

Migratory flow during the period of colonial domination was very much tied to the investment interests of the colonial rulers and took place under their aegis.  For instance a great part of the nineteenth century and the early twentieth century witnessed a regular migration of Indian workers as indentured labour for plantations or mines in the British colonies; this migration was to far away places such as Guyana, Jamaica and Fiji, to not so-distant lands such as Malaysia and Singapore and even to neighbouring countries such as Sri Lanka and Burma.

Since Independence, two distinct types of labour migration have been taking place from India.  The first is characterized by a movement of persons with technical skills and professional expertise to the industrialized countries like the United States, Britain and Canada which began to proliferate in the early 1950s. The second type of migration pertains to the flow of labour to the oil exporting countries of the Middle East which acquired substantial dimensions after the dramatic oil price increases of 1973-74 and 1979. The nature of this recent wave of migration is strikingly different, as an overwhelming proportion of these migrants are in the category of unskilled workers and semi-skilled workers skilled in manual or clerical occupations.

2.1 MIGRATION TO THE INDUSTRIALISED COUNTRIES

At the outset, it is important to highlight the basic characteristics of the labour flows from India to the industrialised countries in the period since Independence:

·     

•         Such outflows are made up almost entirely of permanent migration in so far as the proportion of emigrants who return to India, after a finite period, is almost negligible.

•        A large proportion of these migrants are persons with professional expertise, technical qualifications or other skills.  

•       For a overwhelming proportion of these migrants, the destinations are United States, Canada, and the United Kingdom. 

Although these labour flows have continued unabated for long, it is surprising that there is no information, let alone a primary source of data, on these migration flows from India.  Whatever analysis have been carried out till date on the composition of these flows is thus based upon immigration statistics of the countries of destination (Khadria, 1999; Nayyar, 1994).

The available evidence on trends in migration from India to the selected industrialised countries - the United States, Canada and the United Kingdom - during the period 1951 - 1990 is presented in Table 1. Emigration to the North America began in the early 1950s but the numbers remained modest until the middle of 1960s. This emigration gathered momentum thereafter.  The number of emigrants from India to both the United States and Canada has steadily increased over the 1970s and the 1980s. In contrast, emigration to the United Kingdom was at its peak during the 1960s; its slowed down thereafter in the 1970s and stabilised at significantly lower level in the 1980s.  However, it is important to recognise some limitations of the database. First, the figures do not quite reflect actual emigration flows in each year, at least in the United States and United Kingdom, because the data includes not only immigrants expected on arrival in that year but also those granted immigrant status during that year after their statutory period of residence. Second, the evidence of migration from India to the United Kingdom is incomplete.  Third, there is no information for immigration to other parts of industrialised world such as Western Europe or Australia.

Table 1

Trends in Immigration from India to Selected Industrialized Countries: 1951 – 1990

Source:  Nayyar, 1994

Notes: (a) The above data on immigration are reported by country of birth for the    United States, by Country of last permanent residence for Canada, and by country of nationality for the United Kingdom (b) Information on immigration from India to the United Kingdom is not available for the period before 1 July 1962 because, until then, Commonwealth citizens were not subject to immigration control.

It is very clear that the United States accounts for the largest number of Indian emigrants.  The significance of these flows become more illustrative when we examine India’s share in total immigration to the United States during 1951-1996 (Table 2). It shows that Indian immigration in the United States which constituted less than 1 per cent of total immigration from all countries during 1950s and 1960s, registered a rapid increase during the 1970s, reaching a peak of 3.8 per cent that tapered off in the 1980s till 1991 but went on the upswing in 1992 at 3.8 per cent again and further touching almost 5 per cent in 1996.

Table 2

India's Share in Total Immigration to the US: 1951-1996

Note: For UK, data are not available prior to July 1962. Hence the figures on immigration to the United Kingdom in the columns for 1961-70 and 1951-90 relate to the periods 1962-70 and1962-90 respectively.

Let us now focus our attention on the occupational distribution of the Indians emigrating to these countries1. Table 3 depicts the occupational distribution of the Indians migrating to the United States for the period 1971-1990.  It is very clear that in the first half of the 1970s, persons with professional expertise, technical qualifications and managerial talents constituted a large proportion of emigrants from India to the United States. But their share registered a decline over time and by the second half of the 1980s the relative importance of white-collar workers and blue-collar workers among the immigrants from India registered an increase.

The occupational classification of the emigrants to Canada is depicted in Table 4.  It suggests that skilled workers in the manufacturing sector were as important as if not more important than professional, technical or managerial persons, while workers in agricultural sector became almost as significant in the immigration from India to Canada.

The contrast between the skill composition of emigrants from India to Canada and from that of India to United States is worth noting.  In Canada, the share of persons with professional expertise, technical qualifications and managerial talents was distinctively lower, whereas the share of skilled workers, and workers engaged in primary sector was higher.

Table 3

Immigration from India to the United States by Major Occupation Group: 1971-1990

The emigration of Indians to the industrialised countries can be explained both in terms of supply side factors as well as demands side factors.  Several research studies on migration of professional and technical persons from developing countries such as India to the industrial countries like the United States, Canada etc. have shown that the wage gap between the two destinations has significant and positive impact on the volume of migration, (Wei Chio Haung, 1987; Agarwal and Winkler 1984). These studies have also shown that higher per capita income in the host countries as compared to the home countries also has a

Table 4

Immigration from India to Canada by Major Occupation Group: 1971-1990

positive and significant impact on the professional immigration to the developed world as well as on the non-return of professionals, who enter the concerned country either as students or as temporary workers or as visitors.

It has also been argued that emigration to a foreign country is possible only if there is demand for immigrant labour in the potential destination.  Studies on immigration of professionals to the U.S. and Canada have shown that the annual immigration in each profession in the concerned country is inversely related to the number of individuals graduating in the concerned profession in respective countries (Macphee and Hassan, 1990; Akbar and Devoretz 1993).

The demand determined character of the third world migration to US and Canada is also reflected in the response of migratory flows to the changes in the immigration policies, of the two countries, that occurred during the 1960s.  Immigration policies in both these countries were essentially preserving the basis of national origins for allowing immigration till the 1950s. 1951 Immigration act of Canada and the Immigration and Naturalisation Act of 1952 of the US preserved discrimination in favour of European migrants.  This discrimination was ended in the 1960s. The ‘Immigration Act’ of 1965 of US finally ended the national origin system, and substituted it with overall hemispheric caps on visas issued.  It allowed a maximum of 20,000 visas to a country, per year, and overall 170,000 to the Eastern Hemisphere and 120,000 to the Western Hemisphere every year.  The 1967 Immigration Act of Canada adopted a point system to eliminate discrimination on the basis of nationality, country of origin, sex, colour, race or religion.  The gainers were the Asians and the Africans.  Allowing immigration possibly served the purpose of checking the rising trend of wages by generating a supply of technical and professional workers to meet the rising demand for these workers.  Both in Canada and in the US immigration from the third world, especially of third world professionals increased considerably since the mid-1960s.

At the same time, in both these countries, immigration was allowed only to the extent there existed excess demand for workers of different skill levels. The introduction of the 'labour certification', in the 1965 Immigration Act of the US, ensured that, immigrants who are coming primarily as workers have the skills which are needed in the US, and are not snatching the job from any US citizen. In the subsequent acts, namely, ‘Immigration Control Act’ of 1986 and the ‘Immigration Act’ of 1990, the ceilings were raised to higher levels.  Act the same time, ‘labour certification’ for those employers who employed immigrants was always employed in place, where a national could be employed.  Canada's immigration policy also adopted similar criterion since the 1977 Act, for allowing immigration only to those workers for whom there was demand in the country.  This ensured that immigration is allowed only to the extent, that the host country has a demand for the immigrant worker.

2.2 LABOUR MIGRATION TO THE MIDDLE EAST

2.2.1 Pre 1973 Period

Although migrant labour flows into the Gulf region were considerably accelerated by the dramatic oil price increases of 1973-74 and 1979, the region’s dependence on foreign workers dates to the oil induced economic boom which followed the initial discovery of oil on the Gulf shores in the early part of the twentieth century.  The development of the oil industry during this period had provided an additional need for workers in the clerical as well as skilled and semi-skilled manual occupations.  As the local labour available in the region had limited experience in industrial employment, the oil companies were obliged to import large number of foreign workers in the above said categories.  Available evidence, indicates that most of these foreign workers were recruited from British India.  Indians accounted for nearly 94.3 per cent of the total clerical and technical employees and 91.1 per cent of the total artisans employed in the case of a leading oil company, Bahrain Petroleum Company, in 1939 (Seccombe and Lawless, 1986).  In the case of another leading oil company in the region, Kuwait Oil Company, Indians accounted for 85.6 per cent of the total clerical, foreman and technical staff of company in 1949 (ibid).  It is estimated that by 1950, the large oil companies in the Gulf employed nearly 8000 immigrants from the Indian sub-continent (ibid).

Such large-scale recruitment of workers from the Indian sub-continent could be attributed to two factors: a) proximity of the region to the Gulf; and b) India being under the colonial rule, the leading oil companies, which were primarily British, hardly faced any procedural deterrents in transporting workers on a formal basis.

In addition to the formal recruitment channels, a large number of Indian workers reached the shores of the Gulf through informal methods. Evidence points to the fact that thousands of Indians, who reached Bahrain on their own, were absorbed by Bahrain Petroleum Company (BAPCO) during the 1930s and 40s. One of the prominent informal systems that was in operation was the following: In return for a ‘commission fee’, merchants and businessmen in Bahrain, often of Indian origin, would obtain a No Objection Certificate (NOC) from the state to import one or more immigrants. NOC’s were obtained on the basis of the proposed expansion of their own business. Once the immigrant had arrived and paid his sponsor an agreed sum, he would subsequently apply for employment with BAPCO. The company was, always willing to absorb such Indians for employment.

Apart from the role played by the merchants and businessman in the Gulf in encouraging informal migration, thousands reached the shores of the Gulf on their own bearing a high degree of risk.  Such a stream of illegal migration took place mainly from India’s West coast-Mumbai being the most important centre of origin.  These individuals were ready to bear the high risk of travelling in country-made launches, without any valid documents, mainly due to two factors: economic pressures at home and the massive demonstration effect of the amount of wealth acquired by the Gulf migrants.

Our discussions with people who migrated in the 1950s and 1960s using informal methods revealed that most of them did not find it difficult to get jobs in the Gulf once they reached there[1].  They were also of the view that Indians who reached the Gulf using illegal means were very loyal to their employers and this enabled them to obtain legal work permit with the help of their employers.  This aspect of loyalty being an important factor in the success of the early migrants has been well demonstrated in certain research studies.  In one such study, it is shown that 70 to 80 per cent of the return migrants termed as ‘successful’ in their migration endeavour attributed their success mainly to the loyalty which they showed to their Arab employers, especially in the early period of their working life in the Gulf (Nair, 1988).

This ‘loyalty’ along with the hard working nature of Indians was one of the primary reasons for the preference which the Indian workers got in the Gulf labour market during this period.  Another interesting development linked to the labour flow during this period was the formation of a family link and regional concentration among majority of the people who had migrated.  The sequence of the formation of such a link worked in the following manner. The trust which the Arabs had in the early voyagers initiated them to ask these labourers to bring more people if the Arabs required such services.  Responding to these demands, labourers used to bring them either from their own family or from their locality.  This perhaps may explain as to why there exists long family chains and strong regional concentration in the pattern of migration taking place from Kerala to the Gulf countries.  Labourers have been moving from Kerala to the Gulf in significant numbers over the last 30 years and the chief pockets of migration even from the start has been at centres like Perumathura, Varkala, Tiruvalla, Chavakkad and Tirur. These centres maintain their status even now as leading pockets of Gulf migration in Kerala.

As far as the occupational composition of the Indians migrating to the Gulf during this period is concerned, most of the Indians absorbed by large oil companies were recruited as clerical staff, skilled artisans and as semi-skilled manual workers.  The extent to which the Indians dominated the clerical, technical and artisan grades of the Bahrain Petroleum Company during 1939-44 can be captured clearly from Table 5.

As in Bahrain, Indians dominated the clerical, technical and artisan grades of large companies in most of the Gulf States.  Apart from the above categories of occupation, Indians were employed in semi-skilled and even unskilled categories of work force.  In fact, Indians accounted for nearly 23 per cent of the total unskilled labour employed by the Kuwait Oil Company in the late 1940s.

Indian labour reaching the Gulf through formal or informal methods and not employed by the big oil companies ended up working in the category of unskilled workers.  The types of jobs undertaken included gardening, domestic services etc.  The initial living conditions of the unskilled workers were inhospitable and there remuneration very low.  However, as these workers became more and more liked by their Arab employers, there was a considerable improvement with respect to both the remuneration and the living conditions.

For an Indian worker, the main motive for migrating to the Gulf was the substantial wage differential which existed between the two labour markets for the same occupational groups. Table 6 illustrates the wage differentials that existed between the Bahrain Petroleum Company and the CALTEX, in Mumbai, one of the highest paid oil companies India, in 1941 for three occupational groups.

In contrast to their relatively high wage rates, the living conditions of the Indian workers were far from satisfactory.  Most of them faced severe housing problems and were put up in tents in the deserts.  The situation improved in the 1960s as the large oil companies started giving more and more importance to the provisions of basic needs like housing, drinking water etc. to their workers.

2.2.2 Post 1973 Period

The oil price increases of 1973-74 and 1979 saw an enormous growth in the demand for foreign labour in the oil exporting States of the Arab Gulf.  The scale of labour movements into the Gulf was intimately linked to the escalation in oil revenues and the unprecedented rate of investment in the domestic industry and infrastructure of the oil states which this increased revenue permitted.  A small indigenous labour force ensured that the accelerated economic growth inevitably generated a demand for labour far beyond the capacity of the local labour market.  This sudden spurt in demand for labour was met by drawing labour from labour surplus economies, both within the Arab region and outside it.

The decade since 1973-74, saw a dramatic increase in the number of migrant workers in almost all the oil exporting Gulf States.  Overall the number of migrant workers in these countries rose from 800,000 in 1972 to 1.71 million in 1975 and further increased to an estimated 2.82 millions by 1980 (Birks and Sinclair, 1980; Demery, 1986).   The foreign workers’ share in the total employment in the six Gulf Co-operation Council (GCC) members countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE)) rose from 50.5 per cent in 1975 to 70 per cent by 1980 - the foreign workers constituting 49 per cent in Oman, 59 per cent in Bahrain, 78 per cent in Kuwait, 89 per cent in Qatar and 89 per cent in UAE (ibid).

Besides the overall dependence on expatriate labour which showed a remarkable increase in this period, a significant change which took place was the change in the ethnic composition of the migrant labour force.  As revealed in the earlier section, the Gulf labour markets had used the services of migrant labour in a significant manner right from the beginning of the twentieth century but the major portion of the labour requirements of the rich Arab States was met by drawing labour from poor Arab States.  In fact, of the total 1.71 million migrant workers in the Middle East in 1975, almost 73 per cent were Arabs (Weiner, 1982; Madhavan, 1985; ibid). The next largest group comprised of workers of Asian origin-20 per cent.  However, this trend started showing a reversal from the 1970s, as the flow of Asian labour migrants to the Middle East accelerated to a great extent. Though there are different factors which may explain this reversal in trend, the ones that stand out are: the sharp increase in demand for labour, the availability of more productive workers from the Indian sub-continent readily and cheaply in a relatively well organised manner and the entry of South East Asian countries into the Middle East labour markets through national contracting firms.  These firms brought in labour for their project and established work camps for the project duration - providing most of the necessary housing, utility and health services to the workers. This approach proved attractive to host countries as it provided for the physical separation of the expatriate workers from the local community, lowered recruitment costs and alleviated pressures on services like housing.

Though the flow of Asian labour as contract workers to the Gulf gained considerable momentum from 1973-74, it reached its peak during the period 1977-82 when the developmental activities in industry and infrastructure were at a maximum in the Gulf.  This trend is well captured in Table 7 which represents the annual outflow of contract migrant workers to the Middle East from the major labour exporting countries during the period 1977-1982.

Table 7

Annual Outflow of Contract Migrant Workers to the Middle East from Major Asian Labour Exporting Countries: 1977-82

Source: Amjad (1989), Table 1.1, p. 6

Although Indian labour flows to the Middle East have attained substantial dimensions in the last two decades, lack of data about this movement of people has often bedeviled systematic appraisals of this phenomenon.  This is not to say that statistical details about the migrant labour flows to the Middle East do not exist.  Apart from certain Government estimates, attempts have been made to arrive at reasonably accurate statistics on the volume of Indian population in different countries.  However, none of them have been able to present a complete picture (Sasikumar, 1995a, 1995b).  There still exist significant gaps that restrict the systematic analysis of volume of labour flows and its ramifications.  Nevertheless, by piecing together the available information, certain broad orders of magnitude and trends can be discerned.

The primary source of information on out migration from India is the data published by the Protectorate General of Emigrants, Ministry of Labour, Government of India.  This annual data depict the number of those who require and had actually obtained emigration clearances from the Protector General of Emigrants, while migrating abroad to seek employment.  For several reasons, this data provides only a partial information as to the magnitude of out migrating population from India.  Section 22 of the Emigration Act, 1983 provides no citizen of India shall emigrate unless he obtains emigration clearance from the Protector of Emigrants.  However, the Act exempts some categories of people for whom the Emigration Check is Not Required (ECNR Category).  The ECNR category of migrants affects the reliability of the data, as their numbers are not captured by the emigration data.  Over and above, outflow of this proportion of the labour force (ECNR Category) to the Middle East has been on an increase from the mid 80’s due to two reasons: (a) change in demand composition in the Middle East labour market in favour of skilled labour and (b) bringing in of more and more sections of people under the ECNR category.

The partial nature of this data is further compounded on account of illegal migration which does not get reflected in the statistical figures of out migrant labour, the main modus operandi of this is through the manipulation of tourist and business visas.  Those persons, whose passports have been endorsed under the category emigrant check required, have to obtain  ‘suspension’ from the requirement of obtaining emigration clearances if they intend to travel abroad for non-employment purposes.  While provisions have been made to safeguard against the misuse of  ‘suspension’, it is a matter of common knowledge that considerable number of people who obtain suspension to visit the Middle East, do not return and manage to secure a job there with the help of their relatives or acquaintances (Sasikumar, 1995a; Varma and Sasikumar, 1994).

The trends in the annual outflow of migrant labour from India to the Middle East during the peak period, 1976-82 based on available statistics on emigration clearance are outlined in the Table 8.

The data clearly shows that outmigration which was a mere 4200 in 1976, increased at a phenomenal rate through the late 1970s and reached its acme with more than 2.76 lakhs in 1981.  It then went on to decline in 1982-a decline which accelerated over the next few years, the detailed analysis of which is provided below.

Within India, the migration to the Middle East has been from a few concentrated regions.  Information on the subject is neither comprehensive nor continuous.  However, for the State of Kerala which has contributed significantly to the outflow of workers to the Middle East, some information is available.  Though many Keralities reached the shores of the Gulf even prior to the boom period, the flow accelerated during the period in consideration.

Efforts were made at the State Government level to arrive at some estimates on the number of Keralities working in the Middle East and accordingly the Directorate of Economics and Statistics, Government of Kerala, conducted two surveys-one towards the end of 1977 and another in the beginning of 1980 in which information was canvassed on migrants abroad and their location.  The latter survey also collected information on the educational qualifications and the skills of the migrants.  According to it, out of the 208 thousand Keralities working abroad as many as 186.5 thousand were working in the Middle East in early 1980. Assuming that there were 350,000 Indian workers in the Middle East in 1979 (Gulati and Modi, 1983), Keralities thus would have formed about half of the Indian workers in the Middle East.

If one were to examine the factors behind the large-scale migration from Kerala, those that stand out are the high rate of unemployment within the state and the lack of opportunities for employment at home.  Apart from that, the loyalty of Keralities who migrated prior to the boom period to their employers provided further opportunities to their friends and family to obtain employment in the Gulf.

Turning to the skill-mix of the migrant workers, we are again faced with paucity of data to make any systematic analysis.  The available data is restricted to certain rough estimates made by individual researchers on the basis of sample surveys and some figures pertaining to certain periods published by the Government sources.

From the available estimates, it can however be clearly gauged that the majority of the migrants belonged to the unskilled and semi-skilled category while only 10 per cent were in the professional category.  One of the estimates holds that 14 per cent of the migrant workers were employed in professional, technical and managerial occupations, while about two-thirds were semi-skilled or unskilled workers (Eevit and Zachariah, 1978). Such type of skill-composition among the migrant labourers may be explained by the structure of demand which prevailed in the Middle East labour market, more than anything else.  In fact the demand structure and hence the composition of the labour force in the Middle East labour market were to undergo significant changes in the period after the oil boom, the detailed discussion of which is taken up later in this essay.

The mode of recruitment to the Gulf from the Indian labour market during this period got slightly more organised than the earlier period.  It however, remained largely dependent on the personal efforts initiated by the potential job seekers.  Most of the people who reached the shores of the Gulf during this period resorted to the help rendered by their friends and relatives working in Gulf for obtaining a No Objection Certificate (NOC) to reach the Gulf and obtain employment there.  In a study relating to this issue, it was found that 71 per cent of the sample respondents (Gulf returnees) used the services of either their friends or relatives to obtain an NOC and to make other arrangements to reach the shores of the Middle East (Nair, 1988).

Since the recruitment of migrant workers took place mainly through private (informal) channels, there was no provision for formal arrangements to advise prospective migrants on the socio-economic, political and cultural environment to which they were proceeding or on the working and living conditions, labour laws, grievances settlement procedures etc. in the countries of their destination. The counselling services improved to some extent in the later periods.  The various Protectorate of Emigrants distribute pamphlets on these matters to the intending migrants who approach them for emigration clearance.  Other than the distribution of such pamphlets, little by way of counselling however takes place.

As the institutional efforts taken at the Governmental level to export manpower to the Middle East was very minimal inspite of the massive outflow of labour, this period saw the emergence of a large number of private recruiting agents who provided the necessary services for potential job seekers to the Middle East.  As there was literally no control over these agents, they charged exorbitantly for providing their services and also employed exploitative recruitment practices.  It was often the poor and the illiterate (who at many times thought that reaching the Gulf would solve all their miseries) who fell victims to the exorbitant charges demanded by the recruiting agents.  Along with this, there also cropped up a large number of illegal (fraud) agents who were chiefly responsible for encouraging clandestine migration. 

To begin with it was the non-existence of effective institutional arrangements in the labour exporting countries to export their manpower which gave initial room for employers in the Gulf to follow exploitative practices.  In the case of India, as mentioned earlier, most of the recruitment during this period was made by private recruitment agents and there was hardly any mechanism to check the foul practices followed by these private agents.  Further, the legal provisions which governed the emigration of Indian people was based on the Emigration Act 1922 which hardly met the requirements of the pattern of emigration witnessed during the 70s.  Private recruiting agents making use of the loopholes existing in the legal framework for quicker profits chose potential migrants as their targets.

In several cases the intending migrants were promised lucrative jobs having fabulous wages and air-conditioned accommodation by the recruiting agents who charged very high fees for their so called services.  Once the emigrants reached the Gulf they were not offered any of the said benefits and worked and lived in very unhealthy conditions.  None of these workers protested against this as they feared that any form of protest would cost them even what they had.  This suited the interests of the employers and conditioned them to continue to offer the same kinds of amenities to future migrants also.  Our informal discussions with many returnees mainly those who had stayed in Gulf for a fairly long time-revealed that there were numerous instances where Indian workers landed up in the Gulf without possessing proper agreements.  This enabled the employers to follow exploitative practices as any protest from the workers would result in their being punished for want of adequate papers.  In most cases, the employers using this helpless position of the workers to their advantages forced them to work overtime without extra payment and also provided them cramped and unhealthy working and living conditions.

The demand for migrant workers in the Middle East started showing signs of decline since the early 1980s.  This decline in demand for labour in the Gulf labour markets significantly slowed down the outflow of labour from most of the countries which had exported workers in large numbers to the Gulf during the boom period.  Before attempting to gauge the magnitude of this decline, with reference to India, let us first analyse the contributory factors for the slow down in demand for migrant workers in the Middle East.

There are no two opinions that oil revenues dominate the Gulf economies and hence play a crucial role in the determination of almost all economic variables.  In fact, the expenditure pattern in most of the Gulf States have depended on the oil incomes accruing and the link between the two has been well brought in a recent study on the subject (Birks, Seccombe and Sinclair, 1986). This study points out that the unprecedented rate of investment in domestic industry and infrastructure which the Gulf States witnessed in the 70s was mainly due to the massive amount of oil revenue flowing into them.  In Kuwait, for example the study shows that the government revenues grew by 144 per cent from US $9620 million in 1975 to $ 25331mm 1980 (current prices) while government expenditure increased by 175 per cent from 2644 mm to $7856 mm. The study further goes on to show the impact this increased expenditure had on the number of migrant workers absorbed.  In the case of Kuwait, migrant labour in 1975 which formed 70 per cent of the total labour force increased to 78 per cent by 1980.  It is against the background of this nexus between oil revenue - developmental expenditure- demand for migrant labourer - that we proceed to analyse the developments in the Gulf during the 1980s.

To start with, the developments in the beginning of the 1980s were such that it had an adverse impact on the petro dollars flowing into the Gulf States.  Coupled with the decline in the oil prices in the world market which adversely affected the Gulf States (who incidentally were the major members of the Organisation of Petroleum Exporting Countries (OPEC)) was a reduction in production levels of oil in major OPEC nations.   In fact, the series of oil price rises since 1973 resulted in a rapid increase in the rush for oil exploration and development world wide.  This led to a reduction in the share of OPEC in world oil production - shrinking from 54 per cent in 1970 to 33 per cent by 1982 (The Economist, Feb 19, 1983). Among the major exporters of oil in Gulf, between 1979 and 1983, Saudi Arabian oil production dropped by 57 per cent; Kuwait saw its production cut by 68 per cent; and UAE’s output was trimmed by 33 per cent (ibid).

This oil glut in the early 80s made the Governments and the business realise that the future would not provide an ever-increasing dollop of oil money to be lavished on development.  Although there was still plenty of cash to support the on going developmental schemes and still more tucked away in government reserves and businessmen’s foreign bank accounts - the situation demanded more careful utilisation of the same.  Evidences from most of the Gulf States indicate that there took place a reduction in development expenditure during the 80s, the decline becoming more and more significant from the mid 80s.  In fact the 1986-87 Kuwait budget included a 38 per cent cut in expenditure on goods and services and a 14 per cent reduction in spending and construction (ibid). This naturally led to a decline in demand for labour in the Gulf States.  The reduction planned in expenditure also brought in policies favouring a reduction in the number of non-national workers.  The Third and Fourth Saudi Plans included a commitment to reduce the number of unskilled foreign workers in the Kingdom (Shah, 1986).  In Qatar, the state departments were asked by the government to reduce the number of non-national workers by 10 per cent in 1985-86 (Owen, 1988).

Along with the economic downturn which was experienced by most Gulf states pruning the demand for non-national workers, there also developed in the 80s a feeling amongst the rulers of the Gulf States that employment of foreign labour was expensive and that a large contingent of semi-permanent immigrant population could turn out to be a political risk and hence employment needs should be met from within the Arabs.

The above factors, both economic and political, certainly slowed down the flow of migrant labour from the major labour exporting countries to the Middle East.  The decline was experienced by more or less all the major labour exporters to the Middle East.  In the case of Pakistan, annual outflow of workers to the Middle East declined from 141,416 in 1982 to 121,812 by 1987; for Bangladesh, the decline was from 62,186 in 1982 to 54,500 during the same period.  In the case of Republic of Korea, the decline was more significant as the number of workers leaving for the Middle East declined from 151,583 in 1982 to 44,753 by 1986 (Amjad, 1989).  This trend of decline in the outflow of contract workers to the Middle East was quite visible in the case of India also.  Table 9 depicts the trends in annual outflow of labour to the Middle East during the period 1982-1989 as measured by the statistics on emigration clearance.

It is very clear from the above table that there took place a significant reduction in the number of Indian workers migrating to the Middle East since 1982, the decline becoming more and more pronounced in the mid 1980s.  The decline may well be explained in terms of the reduction in demand for migrant workers in the Middle East, the factors for which have already been highlighted above.  The dramatic increase in the outflow of migrant workers from India to the Middle East during the period 1973-82 and the sharp decline experienced since then clearly points to the fact that the migration process from India to the Middle-East is more ‘demand-determined’ than ‘supply-determined’.  As India is a labour surplus economy the demand was always met easily.  The outflow has started showing signs of increasing trends since 1987 but the numbers migrating still lag far below the ones recorded during the peak period.

Turing our attention to the occupational distribution of emigrant workers from India to the Middle East, during this period Table 10 depicts the skill classification for the period 1984-86.