Dubai crisis: India says no need to panic
The Dubai debt crisis fuelled fears of job cuts and its adverse fallout on remittance-dependent economy in Kerala but India on Sunday said there was no need to panic confident it will blow over.
Dubai/Thiruvananthapuram: The Dubai debt
crisis fuelled fears of job cuts and its adverse fallout on
remittance-dependent economy in Kerala but India on Sunday said
there was no need to panic confident it will blow over.
Kerala Finance Minister T M Thomas Isaac said he is very
"anxious" about the possible slowdown in construction activity
in the Gulf following the crisis which could badly affect
workers from the state. Over two million migrants from Kerala
are working in the Gulf.
"A majority of workers in the construction sector in the
Gulf are from Kerala. We are really anxious about their
future," Isaac told PTI in Thiruvananthapuram.
The Indian Government said it was closely tracking the
fall-out of the crisis in Dubai and directed its missions in
the region to provide all necessary help the vulnerable
section of the Indian workforce in the Gulf who may be
affected by the crisis.
Overseas Indian Affairs Minister Vayalar Ravi calmed the
anxieties in India saying Government was not anticipating a
surge of returnees to the country from the region as it was
confident that the current crisis will blow over because it
was much lesser in magnitude compared to the worst period of
the global financial meltdown.
"There is no need for undue panic. We are closely
monitoring the situation. The crisis had actually started one
year back," Ravi told PTI. The Gulf Emirate`s USD 80 billion
debt woes have sent shock waves around the world.
Ravi`s sentiments were shared by his colleague and
Minister of state for Railways E Ahamed.
"There was no room for any panic on the fallout of
Dubai`s trouble on India either as the country`s economy was
robust as it had proved during the global recession last
year," he said.
Lakhs of workers from India are employed in realty and
other sectors in Dubai and other Middle East cities and their
families are dependent on remittances. Indians form 42.3 per
cent of the population of Dubai.
Allaying fears of an exodus of migrant workforce and
large scale job losses, India`s consulate in Dubai said the
debt crisis had no direct impact on the country and there was
no need to panic.
"We are confident the government of Dubai and the UAE
are fully capable of handling the short-term crisis faced by
Dubai World," India`s Consul General Venu Rajamony told PTI
Indian businessmen and analysts on the ground also said
the world was overreacting to the crisis.
Local Indian businessmen said it is too early to judge
the impact on remittances, redundancies and other business
Managing Director of Xpertize United and a board member
of the Indian Business Professional Council (IBPC) in Dubai
Navin Kapoor said there would be hardly any impact on India.
"The exposure of Indian financial institutions to Dubai
World is being assessed at this point in time but in my
opinion it will have practically no impact on India," he said.
"There is no reason to panic on this issue," he added.
The Prime Minister`s economic panel meanwhile said it
does not expect the Dubai debt crisis to trigger another
meltdown in the world and has retained its forecast of Indian
economic growth rate to 6.5 per cent for the current fiscal.
"I don`t expect really a slip back as far as the
economic recovery is concerned. Most countries in the West
have shown positive growth in the third quarter of 2009 and
this trend will continue. But as we all know recovery is going
to be slow and modest," Prime Minister`s Economic Advisory
Council (PMEAC) Chairman C Rangarajan told PTI in New Delhi.