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South Asia will pay high price for
Mideast war
By Thalif Deen
NEW YORK - A new war in the Middle East could
have devastating consequences for the fragile economies
of developing nations, particularly those dependent on
migrant earnings, according to diplomats and market
analysts.
"These remittances are a major source
of income and have contributed significantly to reducing
our dependence on foreign aid," ambassador Iftekhar
Ahmed Chowdhury of Bangladesh said recently. Last year,
the country earned about US$2 billion from overseas
remittances from the Middle East, which are Bangladesh's
second biggest foreign exchange earner, after garment
exports.
"Migrant earnings have helped us to
pull ourselves up by our own bootstraps," Chowdhury
said. He also pointed out that the 1991 Gulf War created
a mass exodus of migrants from the Middle East, which in
turn caused irreparable damage to the economies of
several developing countries in the Indian subcontinent,
including India, Pakistan, Bangladesh and Sri Lanka. "We
are hoping such a situation would not recur. In the
ultimate analysis, every possible effort should be made
to avert war. Wars cause death and destruction."
Overseas remittances from the Middle East
continue to be one of Sri Lanka's major foreign exchange
earners, accounting for over $1 billion annually, said
ambassador Chitambaranathan Mahendran. According to the
Sri Lanka Bureau of Foreign Employment, about 96,000 Sri
Lankans lost their jobs during the 1990-91 Gulf crisis.
But Mahendran said that he was hoping that history would
not repeat itself.
Sri Lanka, which also has a
prolific multi-million-dollar tea market in the Middle
East, cannot afford to take another hit, he added. "We
are hoping for a peaceful resolution to the problem."
According to the World Bank, Egypt's total remittances
from migrant workers amounted to about $3.75 billion in
2000, mostly from the Middle East, while Indian workers
sent home about $11.6 billion in the same year.
Ambassador V K Nambiar of India told the UN
Security Council last week that his country had "a vital
interest and high stakes" in the peace and prosperity of
the Gulf region. "Our relations with this region have
developed as a result of centuries of deep historical,
cultural, religious and economic contacts," he said.
Currently, about 4 million Indians live in the
Gulf region. In Iraq itself, he said, India had
substantial trade interests and projects that were
affected after the 1991 Gulf War. "Developments in the
region thus affect India," he added.
Salah
al-Mukthar, Iraq's ambassador to India, said last week
that more than 500 companies were engaged in India-Iraq
trade, which is worth over $1 billion annually, while
projects worth more than $5.5 billion are in the
pipeline.
India's primary import is oil, which
has averaged about $25-30 per barrel this year. But any
major increase in its price is expected to hurt
developing nations. Sheik Zaki Yemeni, a former head of
the Organization of Petroleum Exporting Countries, was
quoted as saying last week that a new war in the Middle
East could jack up oil prices to a staggering $100 per
barrel.
Immediately after the Iraqi invasion of
Kuwait in August 1990 and the subsequent Gulf War in
early 1991, millions of migrant workers, mostly
housemaids and unskilled workers, lost their jobs almost
overnight and were forced to return home. The returning
migrants not only caused a halt to all inward
remittances, but also created new problems of
unemployment in their home countries.
Chris Lom,
of the Geneva-based International Organization for
Migration (IOM), said that during the Gulf War alone,
IOM helped repatriate over 215,000 stranded third
country migrant workers in the region. About 10 million
migrants now work in the Middle East, mostly from India,
Pakistan, Bangladesh, Sri Lanka, Egypt, the Philippines
and Indonesia, according to IOM. Palestinians, Lebanese,
Thais, Nepalis and Ethiopians also work there. They are
employed mostly in Saudi Arabia, Bahrain, Kuwait, the
United Arab Emirates, Qatar and Oman.
"We don't
know what population displacement would occur and from
what countries if there was a war," Lom said. "It would
depend on how the war was fought, its geographical
scope, timing, duration etc."
Ambassador Chuchai
Kasemsarn of Thailand told the Security Council last
week that the present escalation of tensions, if allowed
to continue, "will also have dire consequences on the
global economy at a time when many economies are
struggling to recover from financial crises, if not
overcome recessions".
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,
he added. "The economic recovery process pursued by
developing countries may be stalled or even reversed.
This is a no-win situation for everyone," he warned.
(Inter Press Service)
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