Editorial April 11, 2003

War Monitor

Editorial on US War Plans and Military Industrial Complex

Prolonged Gulf War to Cause Economic Hardship for Gulf Keralites

DUBAI - The ongoing Anglo American invasion of Iraq and the overt threat to neighbouring countries like Iran, Syria and even Saudi Arabia will create major political and economic repercussions in the Gulf region which may adversely affect the peaceful life of thousands of Indians living in the six GCC countries. Even though the presence of Indian community is limited in Iran and Iraq, nearly 3 million Indians are employed in various sectors. Majority of the Keralite workers in the Gulf are engaged in the construction sector, which is already affected by the skyrocketing prices of construction materials like cement and steel as a result of the war.

Due to a recent increase in shipping charges and insurance premium after the war started, prices of steel and other construction materials have skyrocketed, putting a number of small, medium and even big construction companies owned by Indians in a difficult situation. Since the price of materials used for reinforced concrete, mainly cement and steel, go up contractors who have taken projects on the basis of earlier price level find it difficult to complete such works profitably. Some of the contractors have already stopped work in gulf construction sites due to the sharp increase in steel price, partly caused by war. Many Keralite businessmen who are engaged in construction field will be adversely affected, which in turn will affect the payment to workers. The construction sector is notorious for delay and non-payment of salary to workers. Salary delay of minimum six months is the common norm. Even though there will be reconstruction opportunities in Iraq, it will not be safe to work in a turbulent war zone where guerrilla warfare is going to be the norm.

The flow of foreign exchange to India is a victim of Iraq war. Such a situation will have its impact on other sectors like trading activities, hotels and retail business owned by Keralites. All essential commodities like food, medicine and other items are coming to the Gulf region from outside. Supply lines coming through turbulent war zones can be disrupted any time. Since it happened during the first Gulf war, people are cautious about it this time also. Best and safe policy is to send your family back to India.

Another impact of the war is a fear psychosis created among Keralites that prompted many of them in Kuwait at least to send their families back home for safety and economic reasons. The direct involvement of Kuwait in the war and a series of missile attacks against supermarkets and military targets inside the country created panic among the Indian community in the whole region. Many people feared imminent use of chemical weapons and missiles by Iraq or spread of the deadly SARS Virus (which has already caused the death of an American lady in Kuwait). They also fear possible Islamic terrorist strikes against Gulf countries which covertly provide military base and logistic support to the US and UK military.

However, Saddam Hussain realized the importance of public support in the Arab world, in the war against US and UK. Public opinion will turn against Iraq, if civilian targets are attacked. Unlike the last Gulf war when majority of Arabs were against Iraq for invading Kuwait, Saddam Hussain enjoys strong moral support this time. Even though the Arab governments support the US and UK, most of the common people oppose the invasion and there is strong anti American and anti British feeling among people. Every country wants to prevent this displeasure erupt into a major anti-government movement, which is a possibility if the war spreads to other countries in the region.

The western embassies have directed their citizens to keep away from public functions, hotels and nightclubs. They are advised not to walk alone and avoid crowded places. There are periodic bomb hoaxes in western schools and embassies. Large number of Indians who are engaged in the tourism sector - hotels, travel agencies and airlines - face a bleak future due to the dwindling number of tourists and the deserted look in bars and nightclubs. A number hotels in the UAE, Bahrain, Qatar, Kuwait, Oman and Saudi Arabia have reported sharp fall in occupancy rate, as western customers prefer to keep away from such places. In Bahrain for instance, an international chain of five star hotels had just three customers in one day! According to a Malayali hotel manager, there has been sharp fall in business as hotels bars and dance parlours have deserted look.

"People, especially Europeans and Americans who used to visit regularly for a drink (alcohol) in hotels do not visit now a days. After taking one or two drinks, Arabs and Europeans start debating Middle East politics and war, which caused in one case at least to physical assault on Westerners. There are only few visitors to belly dance and other entertainment centres, which boost liquor sales in hotels. One hotel owner said there is 80 per cent fall in business since the war began. While some of the hotels in Dubai, the major business hub in Middle East can survive due to strong trading activity, other hotels in the region find it difficult to remain in business. Such a development will affect la number of Indians employed in the sector. The same symptom is visible in supermarket chains and even small shops owned by Keralites. A Malayali businessman in Dubai engaged in readymade business said sales have declined sharply in all the GCC countries, especially in Kuwait. The GCC economies, which, have been slowly recovering from a long period of low oil price and a prolonged war in the region will definitely reverse the trend.

Unemployment is a major headache for all the Gulf governments. Since a section of the unemployed youth is attracted towards terrorist groups and their ideologies, finding a solution to youth unemployment is necessary to maintain domestic peace and stability.
All the Gulf countries follow a policy of replacing expatriate workers (mainly Indians -Keralites) with Arab citizens in various sectors. If the war prolongs and spread to other countries, economic growth will slow down creating more unemployment. Naturally, expatriates who are employed in various sectors will have to be replaced to find job for the restless Arab youth. In simple terms, more and more Keralites will have to get ready to go back. Already the Indian governments' soft policy towards Israel and the US alliance is causing many eyebrows to be raised in this part of the world. Such a pro-western policy of the Indian government will strengthen an anti India feeling among at least the conservative sections of Arab society.

While the above appears to be a pessimistic approach, there are Indians who make money form the war. By supplying goods like vegetables, water and other items to the US or UK military, some businessmen are minting money. Procurement for the military is helping some traders to get good business. But the overall impact of the war is going to be catastrophic for the Indian community in general and Keralites in particular. Thanks to US and British invasion, cost of living is going up, but salaries and economic opportunities are shrinking. -EDITOR KERALAMONITOR.COM