Developing countries caught in Mid East trap
NEW YORK- The Middle East, one of the few regions of the world which neither professes multi-party democracy nor respects the legitimate rights of migrant workers, has traditionally remained a major source of hard currency for developing nations dependent on expatriate earnings. According to the Geneva-based International Organisation for Migration (IOM), about 10 million migrants now work in the Middle East and the Gulf region, mostly from India, Pakistan, Bangladesh, Sri Lanka, Egypt, the Philippines, Indonesia, Lebanon, Nepal and Thailand.

The overwhelming majority of workers are Asians, employed as unskilled workers and housemaids, primarily in Saudi Arabia, Bahrain, Kuwait, United Arab Emirates, Qatar and Oman. The latest figures released by IOM indicate that the total value of expatriate remittances to developing nations has reached about $65 billion annually compared with the average of about $50 billion disbursed as foreign aid, labelled Official Development Assistance (ODA), by Western donor nations. Ambassador Iftekhar Ahmed Chowdhury of Bangladesh admits that remittances are not only a major source of income for his country but have also contributed significantly to reducing its dependence on foreign aid.

The 1991 Gulf War created a mass exodus of migrants, which in turn caused severe damages to the economies of several developing countries, particularly in the Indian sub-continent. And now a new war in the Middle East is threatening devastating consequences on the economies of developing nations.

The immediate impact would be the rise in oil prices which has already gone up from about $18 per barrel in 1997 to the current average of about $30. India alone has about four million of its nationals living in the Gulf region.

Over 500 companies are engaged in Indo-Iraq trade, which is worth over $1.0 billion dollars annually, while projects worth more than $5.5 billion dollars are in the pipeline. Indian workers in the Middle East send home an average of more than $10 billion annually.

The figure for 2000 was about $11.1 billion. Sri Lanka's Permanent Representative Ambassador C. Mahendran says that overseas remittances from the Middle East continue to be one of Sri Lanka's major foreign exchange earners, accounting for over one billion dollars annually.

According to the Sri Lanka Bureau of Foreign Employment, about 96,000 Sri Lankans lost their jobs during the 1990-1991 Gulf crisis. Sri Lanka, which also has a prolific multi-million dollar tea market in the Middle East, cannot afford to take another hit, he says. ''We are hoping for a peaceful resolution to the problem.''

The negative impact of a war will also reach out to Bangladesh, which earned $2.0 billion last year from migrant earnings, and to Egypt whose total remittances from expatriates amounted to about $3.7 billion. Chris Lom, of IOM, says that during the Gulf War, his organisation helped repatriate over 215,000 stranded third country migrant workers in the region.

"We don't know what population displacement would occur and from what countries if there was a war," Lom said. The returning migrants not only caused a halt to all inward remittances but also created new problems of unemployment in their home countries.

At a much broader level, a new war in the Middle East could have repercussions on stock markets, the import-export trade, overseas travel - all leading to a downturn in the global economy just when it is on the verge of recovering from the disastrous impact of the September 11 terrorist attacks on the US last year.

The threat to the global economy was best summed up by Ambassador Chuchai Kasemsarn of Thailand who told the Security Council that the reliance of many economies on the Middle East for trade, investment and supply of natural resources- including oil- means that any instability or outbreak of military action in the region could have severe adverse impacts on the livelihood and well being of people all over the world. "The economic recovery process pursued by developing countries may be stalled or even reversed. This is a no-win situation for everyone," he warned.


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