x Abu Dhabi, UAEThursday 18 January 2018

Crisis puts squeeze on expatriates' remittances

Overseas workers from India's Punjab, who save money sharing apartments and eating frugally, take home less due to the slowdown.

NEW DELHI // Punjab Singh's much-anticipated trip back home did not bring much cheer this year, as the financial crisis took a bite out of the overseas worker's salary. Mr Singh works in New York City as a chef in an Indian restaurant. He has been away from India for 12 years, but his parents, wife and two children live in Begowal, a village in the Jalandhar district of India's northern state of Punjab.

"I have two acres of land, but that isn't enough to support the whole family. So I migrated to the US. As a chef, I make US$12 (Dh44) an hour. But since times are bad and there is less work, my income has gone down," he said. Mr Singh shares a small apartment with several other workers from India and spends prudently, which allows him to save most of his earnings. His visits home are usually accompanied by gifts and lavish parties.

"During my visits to India I am obliged to bring gifts for my family. Be it clothes, games and other items for my kids and presents for my extended family members and neighbours," Mr Singh said. But more importantly, his yearly savings have helped the family live more comfortably. Over the past few years, the family has been able to build a new two-storey house, and purchase a new 1600cc Maruti Suzuki car.

But this year, the economic recession has put a damper on many of the celebrations. "A lot of Americans have lost their jobs and when people have less money, they eat out less. Earlier, the [restaurant] was buzzing, there was lots of work, I could make about $2,500 each month by working 11-hour days. I saved $1,500 a month. But now there is little work. I can get only seven to eight hours of work in a day."

Mr Singh's tale is echoed in nearly all homes in Begowal, where nearly all of the 200 families have sent one or more of its members abroad, with the money sent back helping to improve fortunes in the area. It is estimated that non-resident Indians from Punjab send between $150m and $160m home every year. The money is spent mostly on buying consumer goods, land and building houses, according to a study by the International Monetary Fund (IMF).

Palatial houses are a common sight in backwaters of this region; SUVs bump along muddy interior lanes, while youngsters show off their brand name clothes. With small shopping malls now appearing, the villages have taken on the appearance of small cities. The topography of the region has drastically changed over the past decade. Agriculture was the main source of occupation and economy, but rapid industrialisation and higher influx of money have changed the priorities.

Moreover, with every generation the agricultural fields get divided into small plots of land making farming impossible for sustainability. The movement for a separate 'Sikh land' or Khalistan in the 1980s mainly contributed to the flight of people to foreign countries for better prospects. "During the Khalistan movement, thousands of men from Punjab fled to other countries and settled down there after getting political asylum or employment. Later, they took their families and then friends and acquaintances too," said Ramesh Vinayak, a journalist with India Today magazine.

"Punjabis usually do only two things - they either join the army or they migrate. They have a craze to go abroad. But they are very hard working and they adjust well wherever they are. These qualities have helped Punjabis prosper in all sorts of foreign lands," Mr Vinayak said. Most of those who migrate, work as labourers in Canada and Australia, as attendants at petrol stations in the US, run stores in the UK or work as taxi drivers on the streets of New York. "Punjabis are workaholics and never mind the nature of work. If they earn $100, they will save $90, and they send their entire savings home," said Sucha Singh, the executive director of the Jalandhar-based NRI Sabha (Association), Punjab.

But now with the economic meltdown, the pinch is being felt. "More than six million Punjabis are settled in different countries of the world and they send millions of dollars as remittances every month. The meltdown affected our lives badly," Mr Singh said. The Sabha claims to have more than 11,000 Non-resident Indian (NRI) members, such as Lakwinder Singh. Mr Singh is a commission agent in New York who deals with rice. His family has recently fallen into debt after he failed to send home any money over the past three months.

The family had to sell a plot of land to pay back loans they had taken out to pay for their daughter's marriage. Once buzzing with customers, the State Bank of India branch in Shastri Nagar, Jalandhar, is deserted. The bank used to receive about two billion rupees in remittances, but this year it will not be more than 1.1bn rupees, he said. "I used to have about 300 customers who would receive money from abroad every month," said A K Verma, the branch manger. "More than 40 didn't receive money this month and the rest have had little to take. Money transfers have decreased about 40 per cent this year."

Many of those working overseas are also cancelling their trips home to save a bit more money. The drop- off has seen a cancellation of direct flights from the UK and Singapore from the nearest airport of Amritsar. "Compared to last year's 6.77 million Punjabis who visited their homes in Punjab, this year it has been about 300,000," said Kuljeet Singh of Universal Travels, in Jalandhar. "Not many people came home this year. Many marriages were cancelled or postponed. Punjabi marriages are famous for lavishness and extravaganza but most of weddings this year were simple and economical," said Mr Singh.

However, the economic recession and fewer opportunities have not deterred Punjabis looking for jobs overseas. "There was a slight decrease in the number of applicants in November but gradually it is picking up again," said A K Mahajan, an immigration officer in Jalandhar. * The National