India Presses Oil-Rich Gulf Nations to Offer Imported Workers Minimum Wage

Oil-rich Gulf nations, already facing strong labor protests, are getting new pressure from India, which wants them to pay minimum wages for unskilled workers.

The move by India — which has 5 million workers in the Gulf, making it the largest source of migrants — is the strongest push yet by workers' home countries to win better conditions for their citizens. In the past, countries focused on maintaining the flow of billions of dollars workers send home every year, not their welfare.

Indian officials say they hope to sign bilateral agreements with Gulf nations setting minimum wages that would be spelled out in contracts enforced by both India and the host countries, whose economies depend on imported labor.

Gulf nations have so far resisted, fearing higher wages will accelerate already rising inflation. But officials are feeling the heat.

Migrant workers have been holding larger and more violent strikes. Rioting broke out last week in Sharjah in the United Arab Emirates during a protest demanding an increase in wages that have declined with the falling dollar.

The vast pool of cheap labor from India, Pakistan and other parts of Asia has been key to the Gulf's monumental boom in recent years. Such workers outnumber native citizens in much of the region.

But labor abuse is frequent. Often, recruiters have workers sign one contract in their home country, then force them to sign a new one at a far lower wage once they arrive in the Gulf.

"The workers are left high and dry by the private agents, who take a lot of money and then not a single promise they make they fulfill when they reach the destination country," said Bernard Sami, director of the Arundohaya Migrant Initiative, a group in southern India that works with workers headed to the Gulf.

India runs the risk that companies will simply replace their Indian workers with migrants from poorer countries, which happened to the Philippines when it set minimum wages for its maids in the Gulf.

The Indians in the Gulf, like other foreign laborers, work largely in construction on massive building projects, sending home more than US$20 billion every year.

In February, Indian Ambassador to Bahrain Balkrishna Shetty broke new ground when he announced a minimum wage of US$265 per month required for all unskilled Indian workers in the country, who currently make from US$160 to US$225 a month.

Bahraini companies resisted the increase, which was scheduled to begin March 1. That helped spark more than a month of strikes by thousands of Indian workers in Bahrain.

Bahrain's Minister of Labor Majeed al-Alawi said India had no authority to enforce such a measure in the Gulf. The most India can do, he said, is to try to bar its workers from traveling to the Gulf if they don't get a contract with the minimum wage.

"It is in their jurisdiction to do it in their country," said al-Alawi. "All we say is that he (Shetty) cannot apply it in Bahrain or any other Gulf state."

India scrapped its proposed minimum wage at the beginning of March, according to Shetty. But Bahraini companies reached a deal increasing the salaries to an amount less than US$265 a month with improved work conditions, said Salman al-Mahfoudh, deputy head of the General Federation of Bahrain Trade Unions.

But al-Alawi noted that since then, companies have begun to look to workers from Pakistan, Bangladesh and Nepal.

The Philippines experienced a similar shift away from its workers in the Emirates last year when it instituted a US$400 a month minimum wage for maids. Virginia Calvez, the labor attache for the Philippines consulate in Dubai, said demand for Filipino maids dropped by 50 percent.

India began its own campaign to improve the lives of its migrant workers in the Gulf by focusing on maids, setting minimum wages of US$265 in Saudi Arabia and Bahrain last year and US$300 in the Emirates at the beginning of 2008, according to Indian officials.

Indian Ambassador to Saudi Arabia M.O.H. Farook said the implementation of the minimum wage for maids there had gone smoothly.

But Saudi Arabia has resisted Indian attempts to expand the minimum wage to other unskilled workers, refusing to sign a memorandum of understanding to do so, according to Farook. The ambassador indicated India was still negotiating with the Saudi government.

In the Emirates, Indian Consul-General Venu Rajamony said he hoped to begin talks soon with the country's new labor minister on a minimum wage for all unskilled Indian workers there, who currently earn about US$165 a month.

Given the likely impact on the economy, "we understand the (UAE) government's cautious approach," he said. "We cannot force the government here into anything. But we can set a certain form of minimum wage for our own workers."

India brings much more weight to bear than countries like the Philippines and Indonesia because of its size and growing status as an economic superpower.

"India does have a strong bargaining position, and not just because it is growing, but also the fact that it has the largest number of workers in the Gulf," said Azfar Khan, an expert on migrant labor at the U.N. International Labor Organization.

Huge oil revenues and the falling dollar have fueled inflation in the Gulf, making it even more difficult to convince governments on a minimum wage. But Indian workers in the Gulf have turned up the heat because they are paid in currencies tied to the falling dollar.

"I never got a raise during my service despite the cost of living doubling," said Dinesh Kumar, a 32-year-old Indian who has worked in construction in Dubai for seven years and joined a strike by thousands of workers in November.

Still, he is skeptical any wage his home government wins for him here will be enforced.
"There are a lot of laws to protect our rights here," said Kumar. "But companies are violating them shamelessly."