Dubai World woes worries families of Indian expatriates

New Delhi, Nov 27 : The 59-billion dollars debt woes of state-run Dubai World, one of the largest global conglomerates, has left thousands of Indian families worried, as the region accounts for half of the country's 25-billion dollars remittances.

Gulf countries employ five million Indians, out of the 25 million total strength of the Indian diaspora in 130 countries, and Dubai being a key driver of the region's economy, a shakeout there is seen unsettling the job market -- and the incomes of relatives.

"The Middle East meltdown has been there for the past one year. People have been coming back to India for the past one year," said E. Balaji, director of a leading headhunting firm, Ma Foi Management Consultants.

"Now, there will be at least 25-percent contraction in the job market. There may be a ripple effect on most Middle East countries because of Dubai World bust," Balaji, whose company is part of the Netherlands-based Randstad group, told IANS in Chennai.

Former governor of the Reserve Bank of India (RBI) Y.V. Reddy also expressed concern over the prospect of Indians employed in the Gulf losing their jobs. "Much would depend on its impact on the real economy there and employment," he said.

"It's one thing if property prices or share prices come down. That will affect only one section of people. But how's it going to affect the living conditions, employment, real economic activity in those countries where we are employed?" queried Reddy.

Said K.T. Thomas, a retired state government employee in Changanacherry in Kottayam: "My son doesn't work in Dubai. He is in Sharjah. But things are not particularly good there either. He called me this morning. He is really worried about his job."

"We have this loan we have taken to build two more floors at our house. If my son is unable to send money, it will be impossible to repay the loan with my meagre pension," Thomas said, sounding despondent like many other relatives of Indian expatriates in the Gulf.

In Andhra Pradesh, which accounts for the largest share of remittances from the Gulf after Kerala, the realty industry feel there is an underlying worry that the Dubai World episode may just be the tip of the iceberg.

"Things might go from bad to worse when the Dubai companies announce their financial results in December and January," said A. M. Imran, a real estate dealer in Dubai, currently on vacation in Hyderabad. "Many more could lose jobs," Imran told IANS.

Analysts, nevertheless, maintained that while the future plans of Dubai World in India may be affected, the existing ones may not suffer much. These projects include:

-Full ownership of the container terminal in Chennai

-A joint venture with Bharat Hotels for five-star properties

-A venture with Tata Realty and Infrastructure for logistics parks

-Ownership of international container terminal near Kochi

-A $12-billion realty project near Bangalore with DLF to house 750,000 people

-Interests in Kulpi port project near Kolkata

-Pact with Tata Strategic Management Group for consultancy outsourcing

-Major stake in Nhava Sheva container terminal near Mumbai

-Major stake in Mundra international container terminal near Kandla

-Major stake in Visakhapatnam port in Andhra Pradesh

In Kochi, for example, the chairman of Cochin Port Trust, said the first phase of the $451-million International Container Transshipment Terminal of Dubai World subsidiary was "fast nearing completion" with no problem on funding.

"Here, the work is progressing smoothly as there's no crisis for funding from DP World," the chairman of the port trust N. Ramachandran told IANS in Kochi.

"The construction began in 2007. Till today work has progressed well with no problems. According to our initial estimates, the budget for the first phase is around Rs.1,500 crore ($300 million), but it is likely to go up."