Sunday, May 11, 2008

Gulf inflation and the business of remittances

Once upon a time, the Gulf was known as the exotic land of mystery. As time passed by, the notion changed and the oil rich region came to be the land of opportunities. But with the problem of rising prices and weak currencies getting intense, the overseas workers are now seriously considering a life away from the Gulf.

The six Gulf Cooperation Council (GCC) states have been the major destinations for the migrant workers from countries like India, Philippines and Sri Lanka. The oil windfall is one of the reasons behind the popularity of this region. But as the Gulf reels under inflation, the remittances too have been going down and the tumbling dollar is making it difficult for the overseas workers to sustain themselves. For the Indian workers in particular the problem has meant a return back home, given the fact that the Indian rupee is surging against the dollar.

According to GulfTalent, the cost of housing amounted to 35 per cent and 31 per cent of household income in 2007 which is forcing a large number of expatriates to head back home. The problems are brewing and the air of uncertainty is engulfing the Gulf region. It won’t be long that one gets to know the magnitude of this problem and its implications on the overseas workers living in the Gulf.

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