Indian expats in Kuwait worried over salaries beyond October

V Sajeev Kumar/Vinson Kurian Kochi/Thiruvananthapuram | Updated on August 20, 2020

Kuwait, which is facing a liquidity crisis following the fall in oil prices, approves Indian request to operate flights to repatriate expats wishing to return home

Indian expats in Kuwait government service are keeping their fingers crossed over public comments by the Finance Minister about the country’s capacity to pay salaries beyond October. This could mean that private entities, especially providing contracts and other indirect services to the government sector, would be materially affected, says Krishnan Ramachandran, CEO, Barjeel Geojit Securities, Dubai.

Though it is difficult to estimate the number of Indians/Kerala expats working in this segment, it could be quite high, according to Ramachandran. The possibility of job losses is likely in the near term, he told BusinessLine.

Kuwait’s Finance Minister Barak Al-Sheetan assessed that his country has two billion dinars ($6.6 billion) worth of liquidity, which is not enough to cover state salaries beyond October. The government is withdrawing money from the General Reserve Fund at a rate of 1.7 billion dinars a month and this would result in weakening liquidity.

Unless there is any improvement in oil prices, Kuwait will not be in a position to borrow from local and international markets. There has been a severe strain in their public finances and the Parliament’s Economic and Finance Panel rejected a proposal to borrow $65 billion. This has potentially led to a liquidity crisis, forcing the government to draw funds from their emergency welfare reserve fund, Ramachandran said.

If not remedied at the earliest, this could lead to a delay in salary disbursal and payments to the citizens of Kuwait, and more importantly expats dominated by Indians working in the government sector. An estimated 30,000 Indians may be employed directly in the government/sectors, of which, 50-60 per cent would be from Kerala.

There’s the risk of large-scale job losses and also delays in issue of end-of-service benefits, he said. However, he expressed the hope that Kuwait would be able to manage the present situation considering its oil reserves, which is the sixth largest in the world, and the country’s capability to raise funds globally.

Meanwhile, the Public Authority for Manpower, it is is learnt, has decided to stop issuing work permits to those above the age of 60 as well as to holders of high school or diploma certificates , effective next year.

Expired residency/entry visas

Media reports from Dubai cited the Kuwait Ministry of Interior (MoI) stressing that expired residency and entry visas of expats will not be extended after August 31 that marks the end of a period granted earlier when all visas would be automatically renewed.

At least 4.05 lakh expats have taken advantage of this facility, and roughly 2.60 lakh have renewed residency visas through the MoI website. But there are 1.45 lakh others who have not, and they risk being treated as residency visa violators and will face legal issues and fines.

Meanwhile, Kuwait has approved an Indian request to operate flights to repatriate its expats wishing to return home amid a ban on air travel imposed by Kuwait on dozens of countries, including India. The civil aviation authority has agreed to flights starting from August 10 until October 24. Per this, 1,000 Indians will leave Kuwait daily, to be flown equally by Kuwaiti and Indian airlines.

Published on August 20, 2020

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