Posts Tagged ‘Saudi’
I have been reading The Economist, a London based news magazine focused primarily on different aspects of Economics, for quite a while now. I really like the set of data they produce and visuals they create. Of late, I stumbled upon a news, which was more of a “misfit” with what the magazine dishes out in general. Citing a drop in labor recruitment from Bangladesh in Saudi, the reporter speculated whether that’s related to Bangladesh insistence on trial of War Criminals. The data they presented indeed show a sharp drop in Bangladesh nationals heading to Saudi kingdom. To rub salt in the wound, they also showed that the recruitment of Pakistani Nationals are still on and flourishing.
“Where before the ebb and flow of Pakistani and Bangladeshi workers were synchronised, their figures have since come unstuck. Bangladesh’s loss looks very much like Pakistan’s gain.”
The reason, it came up with, was purely political.
“Saudi Arabia silently disapproves of the imminent hangings of the leadership of the Jamaat-e-Islami, the religious party that serves as a standard-bearer for its strand of Islam in Bangladesh. … It will not have escaped the Saudis’ notice that Bangladesh’s foreign minister likened the Jamaat, a close ally of theirs …”
However, it hardly showed any statements or formal communication to prove their point. There are multiple data points those directly indicate that the assertions Economist had made, are false.
Let me accept the fact that indeed recruitment from Bangladesh has gone down to an unprecedented level. The similar data for Pakistan, India, The Philippines and Sri Lanka seems not to be touched by much. (To mention, Economist skipped the data for Pakistan in 2011 that showed a drop, why?) But whether it’s due to a political reason, is not at all indicated.
First, if you look at the history of Bangladesh labor recruitment in Saudi, it’s not a one-way drive up always. Several times recruitment from Bangladesh stagnated and it had little to do with the political story that the Economist is trying to sell. Last time when it fell between 2003-2005, Jamaat was an important ally in the ruling coalition in Bangladesh. So, the story of Jamaat leverage with Saudi affairs looks purely like a myth.
Next, if we look at what caused the nosedive of flow of Bangladesh workers in Saudi, we can find a few key points. First, Saudi Govt. introduced a legislation to limit nationals of a country, so that it does not become more than 20% in any sector and promoted more diversified labor recruitment strategies. Bangladesh, which supplied tons of workers in Agriculture and Construction sectors, ran out of quota. At the same time, Saudi Govt. changed the rules around minimum wages to allow immigrants to work in Saudi only if they earn $147 per month. A lot of poor Bangladesh labors, who fill in the cheap labor categories mostly (62% of worldwide Bangladesh immigrants are “less-skilled” as in 2012 and the number should be higher for those in Saudi), were cut off from entering the Kingdom due to the minimum wage requirements. And wait, all these legislation were passed in March, 2008 and effective from mid of the same year. Indeed, if you look at the graph closely, the numbers peaked in 2007 and started to drop in 2008. However, the current AL Govt came to power only in 2009 and announced its plan to set up a War Crimes Tribunal only in late 2008. So, how could a change in Saudi Law (which otherwise seems country-neutral) be caused by election manifesto in Bangladesh?
To elaborate, there are more regulations to come in Saudi. Recently, a legislation calls for $53 per foreign worker per month to be paid by his/her employer to Saudi Govt. It will definitely worsen the conditions of low-paid Bangladeshi workers in Saudi. Again, this has little relationship with War Crimes Tribunal in Dhaka but closely related to regulatory changes in Saudi.
Meanwhile, it is foolish to presume that Awami League leaders in Dhaka are sitting idle. They are working hard to fix the leaking boat to get the labor export back to where it was. They have a great success with Oman now recruiting tons of Bangladeshi workers and overall labor immigration to Gulf countries from Bangladesh looks to bounce back to the original pre-2008 levels. If we are convinced that Saudi downturn was pure Economics and nothing better could have been done by the Bangladesh Govt. to stop that, then the whole thing translates into a gain of Oman market only. In UAE, recruitment is back to the original level. So, how can we convince ourselves that Jamaat-E-Islami, that holds such power to take Saudi Kingdom beyond their pure rules of Economics and “teach a lesson” to the current Awami League Govt, holds absolutely no power in neighboring Islamic countries such as Oman and UAE?
One little piece of news published in Indian media speaks in the same line that I have been talking about. It highlights that workers below matriculation (i.e less skilled) are no longer going to the Gulf in high numbers. From 2008, when 88,389 workers qualified below matriculation left for the Gulf, the figure fell sharply to 21,129 in 2012. In 2011, number of less-skilled workers heading for Saudi, was just 4011. The news also attributed this to availability of more jobs at home and somewhat praised local Govt. The news for Bangladesh was similar, however, it became a tool for Govt criticism.
Coming to the headline, is it just pure “bad”-journalism case for the Economist to blame? In Freakonimcs, we saw a lot of often unrelated events and actions are tied up with numbers. But, numbers are often dangerous when any sudden change is explained with whatever the author believes or want to make the readers believe in. In this case, whether the author really believed that Govt actions (i.e. War Crimes Tribunal) promoted the fall in Saudi recruitment or wanted us to digest those and hinder the trial process of one of the most heinous Genocides of all times, is left to the readers to decide.
Data Sources :
1. ADBI Presentation
3. ADBI Report
I read hundreds of articles about US presence in Iraq and most of them argues with oil as a primary driver of US Economy. Moreover, they also highlight the importance of Persian Gulf as a primary source of US oil and energy resources. These notion is extremely popular in Indian subcontinent and Middle-East, where people love to discuss sans any facts. However, digging deeper in facts quickly dismisses that big a role of oil in modern day United States.
If we briefly look at oil import trends of United States, we can definitely observe a downward trend in oil import for last six years. In year 2010, US imported almost same amount of oil as they did in 2001. From the peaks of 2005, its down by about 12%. US oil imports are actually going down. (source)
Let’s go over the other myths –
1. US imports most of its oil from Persian Gulf and US imports more from OPEC countries.
Clearly wrong. US imports around 15% of oil from Persian Gulf and about 40% from OPEC.
2. US imports a lot of oil from Saudi because of the kingdom’s closeness with USA.
US is steadily increasing imports from Canada over Saudi and in 2010, US imported 2.5 times of that it imported from Saudi. The tar-sands oil in Canada made them the owner of second largest oil reserve after Saudi and United States is making full use of it.
This is the detailed break up of US oil sources –
The last but not the least – it’s always assumed that US will remain the largest net oil importer of the World. However, Shale Gas is turning that tide. A very optimistic article (and another one)on Shale Gas discovery and its impacts terms this as “energy revolution”. The days might not be far ahead, when US might not import from outside of the continent at all.
A good read – Swami Aiyar’s blog