Mon, Aug 10, 2009 - Page 11 News List

Economic downturn hits Asia’s overseas workers

IMPACT NOW BEING FELT: Millions of families in poor Asian countries rely on remittances from relatives working in unskilled jobs, jobs which are disappearing


Men line up to pay fees to get foreign employment at an office of the Department of Labor and Employment Promotion in Kathmandu, Nepal, on Friday.


When Anita Gimmi was unable to find work in her native Nepal last year, she borrowed US$1,300 and traveled to Qatar to take up a two-year contract with a cleaning company.

Less than a year later, the 26-year-old has been forced to return home still heavily in debt after becoming one of thousands of foreign workers to be laid off as the economic downturn hits Southeast Asia and the Middle East.

“I had no choice but to go abroad because there are no employment opportunities here in Nepal,” said Gimmi, whose parents, husband and son all depended on her monthly salary of US$155. “The family had quite a decent life for a while, but now our situation is miserable. Even getting two proper meals a day is becoming difficult, as I don’t have any income at present.”

Millions of families in poor Asian countries rely on remittances from relatives working in unskilled jobs, such as construction or as domestic servants in Southeast Asia and the Middle East.

The World Bank last month forecast a 7.3 percent fall in remittance flows to developing nations this year, however, as the recession hits jobs in richer countries that have traditionally employed large numbers of foreign workers.

Nepalese economist Shankar Sharma said remittances from workers abroad accounted for around 20 percent of the country’s GDP and were its single most vulnerable source of income.

“Nepal escaped the immediate impact of the global financial crisis, but its effects are slowly becoming visible,” Sharma said. “The growth of remittances declined to 28 percent in 2008-2009, from 42 percent the previous year. So the recession has started showing some impact.”

Many Asian countries, including Nepal, Bangladesh, the Philippines and Pakistan, have registered increases in foreign remittances this year.

The central bank of the Philippines — the fourth-largest recipient of overseas remittances in the developing world after India, China and Mexico — said such payments reached a record US$1.48 billion in May.

Experts say this may reflect a growing number of workers returning home for good, however, bringing their savings and severance packages with them.

“Such a phenomenon would lead to a sharp reduction in remittances in the following months,” the World Bank said in a recent report on the Philippines.

Pakistan’s economy relies heavily on its roughly 4 million expatriates — around 2 million of them in the Gulf — and registered a record US$7.81 billion in remittances for the 2008-2009 financial year.

Economist A.B. Shahid said, however, that this was “due mainly to the transfer of settlement dues by Pakistani expatriates whose services have been terminated in recession-suffering Gulf countries.”

This is a worrying development for Maimoona Ayub, a housewife and mother of four in Karachi, who relies completely on money wired home by her plumber husband in Dubai.

“His support helps me raise and educate our children, but now his job is also in danger,” she said. “He told me many of his co-workers have been fired and he was prepared for the same fate.”

In impoverished Bangladesh, where in the past year alone remittances contributed 11 percent to GDP, government figures show a huge drop in the number of people going abroad to seek work.

Almost 251,000 people left the country between January and June — a 50 percent drop on the same period last year, the Bureau of Manpower and Employment Training’s (BMET) figures showed.

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